(CHICAGO) – Earlier on in this presidential campaign, Mitt Romney stated that the free market and/or free enterprise would be on trial. He was insinuating that somehow President Obama was vehemently anti-capitalism and anti-business. Since that time there has been this faux debate regarding this being a left-right and/or a socialist-capitalism issue … and that’s the problem.

Instead of focusing on the possible political impact of the GOP presidential nominee’s assertion, let us deconstruct the very notion of a free market. Adam Smith, in The Wealth of Nations, spoke of an “invisible hand of the market” guiding right and equal outcomes and for centuries this ethos has been forwarded by scholars, politicians and economists alike, as if it were gospel truth.

Nevertheless, in the aftermath of 2008 and our current economic woes, can we honestly buy into that ideology? Given what we now know about the avoidable factors involved in recent economic meltdown, can we say that was the result of an actual free market? There are several key observations that tell us in no uncertain terms and with resounding clarity that a free market is more concept than it is reality.

The market is not free when credit rating agencies are beholden to the companies and corporations, whose stock they rate

Leading up to the financial crisis of 2008, credit rating agencies had become far more concerned with profits than with analytics. Rating agencies are paid per diem by the companies they rate, so when the analysts are being paid by those they are analyzing … well … you can fill in the blanks. There are some who place the credit rating agencies at the center of economic meltdown of four years ago.

A leading reason for that contention is that riskier sections of mortgage-backed securities bonds that were rated Triple B (BBB) were bundled together and became, by virtue of entities such as Standard & Poor’s, Fitch and Moody, highly-touted and coveted AAA-rated CDOs (collateralized debt obligations) – many of those CDOs contained debt from subprime loans. From 2000 to 2007 more than $5 trillion was spent buying mortgage-backed securities and CDOs around the world. Credit rating agencies even gave, typically conservative investors the confidence to buy these extremely suspect bonds by giving them the highest ratings possible.

The Financial Crisis Inquiry Commission reported in January 2011, “The three credit rating agencies were key enablers of the financial meltdown. The mortgage-related securities at the heart of the crisis could not have been marketed and sold without their seal of approval. Investors relied on them, often blindly. In some cases, they were obligated to use them, or regulatory capital standards were hinged on them. This crisis could not have happened without the rating agencies. Their ratings helped the market soar and their downgrades through 2007 and 2008 wreaked havoc across markets and firms.”

As long as the credit rating agencies gave these, obviously risky, securities higher ratings than they merited, the money and business kept flowing their way. This conflict of interest is the antithesis of open and is a clear sign that the market is not free.

The market is not free when the market is rife with manipulation

Matt Taibbi wrote in his Oct. 15, 2009 Rolling Stone piece, Wall Street’s Naked Swindle, that on March 11 of 2008, “a mysterious figure spent 1.7 million on series of options gambling that shares in the venerable investment bank Bear Stearns would lose more than half their value in nine days or less.” Anyone with a knowledge of what transpired in 2008, knows that’s exactly what happened (the very next day, March 12, is when the first public signs of Bear Stearns’ implosion began). How did the story end for that mysterious figure? That individual increased their investment 159 times (approximately $270 million), while Bear went the way of the dinosaur and was absorbed by JPMorgan—-with the help of $29 billion in public funds—-at the embarrassing sum of $2 a share.

And yes, ladies and gentleman, that is the same JPMorgan that is in the throes of a two-month old criminal investigation for playing roulette with the company funds – a $5.8 billion loss … and rising.

Massive deregulation allowed for greater manipulation of the market by large corporations and investment banks. Just think about it: The same Wall Street banks that were recipients of TARP funds also made a killing speculating on the initial rejection by Congress of the Bush administration’s bank bailout plan. But is it really speculative if before the collapse in September 2008, there were some major financial institutions that had already positioned themselves by way of having knowledge and access to privileged information prior to the House’s rejection of the bill —- making billions in the process on Black Monday of 2008?

Currently, we have the LIBOR (London Interbank Offered Rate) scandal where there appears to have been a pattern of systemic malfeasance by 16 banks, that effectively fixed a key global interest rate used in contracts to the tune of trillions of dollars. This, by the way, is a form of insider trading (Barclays was recently fined $453 million for their part in this scandal).

Yet, neither 2008 nor the LIBOR scandal are some crazy fiscal anomalies; it seems to be something very much hardwired into the DNA of Wall Street & Big Finance. The Panic of 1819, 1837, 1873, 1897 and 1907; the Great Depression; the S & L Scandal of the 1980s; the Internet boom and bust of the late 1990s; the recent JPMorgan criminal investigation and all the medium-sized and smaller scandals and recessions in between point to a control of the international and American economy that is anything but free and no less than oligarchic. When a wealthy and well-connected financial ruling class can manipulate and maneuver the economic tides of a nation and the globe, the market is not free.

The market is not free when the lobbyists from the financial industry outnumber the members of Congress more than 5 to 1

On Dec. 31, 2007, the Wall Street Journal reported that Ameriquest Mortgage and Countrywide Financial, two of the largest mortgage lenders in the nation, spent respectively $20.5 million and $8.7 million in political donations, campaign contributions and lobbying activities from 2002 through 2006. A working paper by the IMF from December 2009, titled, A Fistful of Dollars: Lobbying and the Financial Crisis, addresses this dynamic: “Sixteen of the twenty lenders that spent the most on lobbying between 2000 and 2006” received bailout funds, with 60 percent of funds allocated under TARP going to lenders that lobbied on particular issues.

The financial sector employs 3,000 lobbyists, more than five for each member of Congress; between 1998 and 2008, the financial industry spent more than $5 billion on lobbying and campaign contributions. And since the crisis, they’re spending even more money. We are not talking about some nebulous, ineffectual engagement here. Money gains access and that access means more money gained. Does the average citizen have that level of access? If not, how is the market truly open or free? Add to that the Supreme Court’s Citizens United ruling that equates free speech with money and therefore cannot be limited. We can now see the gathering of a perfect storm of increased power over the market and democracy as well. The market is indeed not free.

The market is not free when it costs too much

The word free has various meanings and applications, and in many incarnations of the word (as an adjective), we see its violation when it comes to the notion of a free market: Free, as in, without charge, couldn’t be further from the truth when it comes to our bought and sold market. The price we paid in 2008 (and are still paying) was the greatest evaporation of wealth in the history of the world. Retirement funds were eviscerated; IRAs and mutual funds values plummeted; record number of homes were foreclosed; and in many countries and communities, double-digit unemployment. And yet, we see all-time highs in CEO compensation in the financial sector and unprecedented profits among Fortune 500 companies. Indeed, this was no free ride; we paid a high price for this free market.

Free, as in, voluntary and spontaneous, would betray the deliberate and methodical way we have arrived to this point in history. The dismantling of Glass-Steagall; rampant and unbridled deregulation; and the rescinding of the uptick rule, bear raids, insider trading and so on, tell the real story. In corporate takeover fashion, the plan that has led to the greatest upward concentration of wealth in human history was devised and executed. This wasn’t accidental; nor was it unintended.

Free, as in, open and transparent, is a laughable perception. It seems that the market, in the manner it functions, has very little connection to transparency. A great deal of the decisions that led to the present global economic crisis was done in secrecy. In other words, it doesn’t get any more behind-close-doors, under-the-table, hush-hush and on-the-DL, than this current financial market’s main actors. The invisible hand that Adam Smith spoke of isn’t really invisible, but hidden (in a most deceptive way) from public view.

Mitt Romney may as well have been talking about sugar plum fairies or the existence of lands that J.R.R. Tolkien wrote about when he talked about a free market. Because what we have, most bitterly, learned is that the market is not only not free … it costs us too much as well.