Whenever discussion comes up about the 2008 financial crisis, and I end up asking, again "what free market?", I tend to think of the story of the elephant and the blind men. Everyone knows the story. A group of blind men want to know what an elephant looks like, so they find one, and all of them go to touch it, to feel it and find out what everyone is talking about. One touches the elephant's trunk, and says that an elephant is like a snake. Another is at its ear and says an elephant is like a big banana leaf. A third is at one of its legs and says that an elephant is like a tree trunk. The blind man at the elephant's tail says that it is like a rope, and so on.
A large number of free market observers have each pointed out different aspects of government intervention which helped create the housing bubble and the financial collapse of 2008.
Thomas Sowell, in his book The Housing Boom and Bust, describes land use regulations such as "open space" laws and limits to the height of apartment buildings as the cause of localized high housing prices which government officials all the way up to the White House mistook for a national problem, which they tried to solve with such things as Bill Clinton's "National Homeownership Strategy".
Thomas Woods describes the role of the Austrian Theory of the Business Cycle (ABC) and low interest rated from the Federal Reserve in Meltdown: A Free-Market Look at Why the Stock Market Collapsed, the Economy Tanked, and Government Bailouts Will Make Things Worse.
Daniel Henninger explains the role of things like deposit insurance in affecting banks' behavior in regards to risk in Welcome to 'Moral Hazard'.
Others show how deposit insurance was created to fix problems that were caused by previous regulation:
A Perfect Stormof Ignorance
Other observers have implicated the SEC's role in turning our rating agencies into a virtual monopoly, requiring banks to use Moody's, S&S, and Fitch, the three big ones, in order to invest in securities:
A Government Failure, Not a Market Failure
End the Credit Rating Monopoly
There is probably a whole lot more I can list, if I just keep digging. No economist, conservative or free market politician or commentator, or blogger has named all the regulations which helped to contribute to the housing bubble and financial crisis of 2008. To fully understand it, or at least try to, you need to read many different sources, each of which provide a small piece of the whole picture.
For those who love free markets, the housing bubble and the collapse of 2008 provide a target rich environment for blaming government for its interference in markets.