Today is not a good day if you’re a free marketeer.

Lehman Brothers has collapsed.

Merrill Lynch sold itself off to Bank of America.

The stock market tumbled badly out of the gate.

And the specter of 1929 has reared its frightening head.

In taking stock, if you’ll excuse the expression, a couple of conclusions leap to mind.

First, this is what happens when you deregulate the financial markets.

With the repeal of Glass-Steagall, the New Deal banking law that Phil Gramm, Robert Rubin, and Bill Clinton agreed to toss overboard in 1999, the distinction between traditional banks and other financial institutions vanished.

As a consequence, all these institutions took on more risk, and everything got shakier.

And then the Fed, under Alan Greenspan, refused to regulate the subprime mortgage peddlers, and in fact, egged them on to ridiculous heights.

The Fed and the Treasury Department also let bloom a thousand funky financial instruments that were beyond the control of regulators.

Lehman Brothers placed itself in the center of this maelstrom. “Lehman, the number one underwriter of mortgage-backed bonds last year, amassed a giant portfolio of properties and mortgage-related securities,” The Washington Post reported. “But the value of the assets began to sink last year amid a spike in mortgage defaults by homeowners with subprime credit.”

Now we’ve got a mess on our hands, and we need the opposite of traditional Republican economics, which John McCain had been advocating until, well, this morning.

We need more government regulation, not less.

We need more government involvement in the economy, not less.

But that is not the Republican mantra.

“Economic freedom expands the prosperity pie; government can only divide it up,” says the Republican Platform. “That is why Republicans advocate lower taxes, reasonable regulation, and smaller, smarter government.”

But today, “economic freedom” and less regulation—which is what Republicans mean by “reasonable” regulation--have brought disaster.

Yet you wouldn’t know that by McCain’s statement on the Lehman collapse and that attendant volatility.

“I promise you: We will never put America in this position again. We will clean up Wall Street,” McCain said. “The McCain-Palin administration will replace an outdated, patchwork quilt of regulatory oversight and bring transparency and accountability to Wall Street. We will reform the regulatory bodies of government."

But what does he mean by “reform”?

That is the question—not only about his plans for Wall Street, but for America. As far as Wall Street goes, McCain sounds, on the surface, like Eliot Spitzer, pre-call girl. But when Republicans talk about regulatory reform, they usually mean the gutting of regulation.

We’ve had eight years of a Republican President who didn’t believe in regulation, and we had eight years before that of a Democratic President who governed for Wall Street.

We’re seeing the results before our very eyes.