I thought that this was pretty damning stuff from one of the leading cheerleaders of pure laissez-faire.
Along the way, Arianna quotes a recent New York Times piece that pretty solidly lays the blame on the current economic situation on the deregulatory policies of the Bush administration.
I wonder if the reports of the death of pure free-market capitalism are premature, but it does seem like we're heading in that direction.
Laissez-faire has not existed for a long time. The government has instituted a number of socialist directives on capitalism to better suit the populace: the 40 hour work week, minimum wage, minor laws, vacation time, overtime, affirmative action, illegal immigrant reform, 401K plans, pensions, etc. You also have licenses, tariffs, and environmental laws that curb, prohibit, make more competitive and propel businesses forward. For example, Japanese cars are extremely cheap: but if they sold them in the United States for how much they went in Japan, the American car would not be able to compete. To compete, the U.S. places tariffs on Japanese imports so that American cars CAN compete (of course, this has not worked out so well: Japanese cars are more reliable, fuel efficient and cheaper, but maintaining a "false" competition hurt the American car industry later).
I want to talk about Greenspan (I read three of his biographies!, and actually enjoyed the Woodward one), but I'm tired now. :<