I think the underlying error for conservatives is assuming that the free market, left to itself, will always self-regulate and establish correct prices. That is

I think the underlying error for conservatives is assuming that the free market, left to itself, will always self-regulate and establish correct prices. That is generally true when you are talking about goods like refrigerators and also direct services like haircuts. However, history has shown countless times that when it comes to financial markets, including investments like real estate, over the long term things often become highly unstable, with wild prices rises and crashes. Another example would be banking panics. A third example is insurance, where insurance companies have a strong tendency, left to themselves, of putting aside too little in the way of reserves to handle unusual expenditures. For these sorts of reasons, a good deal of governmental regulation is needed in the financial realm.