All of the examples cited are industries highly regulated by the government: equities markets and banking. Since the government is already highly regulating t

All of the examples cited are industries highly regulated by the government: equities markets and banking. Since the government is already highly regulating these markets, any further tinkering by the government is going to have unintended consequences. Actions have consequences, so when the government regulates a market, the market players react, often in unintended ways. Likewise, when the government then re-regulates (often called "deregulation") the market, the market players react again in unintended ways. The financial crash was caused by the government coming in and taking over another industry, residential real estate mortgages, by purchasing all the secondary mortgages and setting standards. When the government lowered lending standards to help lower class people purchase houses (they couldn't afford), it unintentionally caused the mortgage-based securities market to crash. Mortgages used to be a safe investment, but after the government lowered lending standards, this assumption that the markets had previously used was no longer true. Further government distortions of the market are cited in the report, namely ethanol subsidies. So, I would conclude that government distortion is what is breaking the markets, and that less government control is needed to return to freer markets.