This is NOT a sarcastic comment nor a defense of centrally planned economies: which country(s) has a free market economy post the 2008 financial crisis?

You could even argue (and I don't believe this is a bad thing) that the way the US government handled GM's default was very much a "planned economy" sort of move, which resulted not only in the successful exit from crisis for the new organization, but also the prevention of a cascading economic failure (EDIT: hundreds of thousands of jobs were at stake).

A completely free economy nor a planned economy are ideal; a mix of the two with proper leadership seems to be the path to success. (EDIT: Most importantly, those at the top must be genuine, honest, and transparent. Corruption is a poison in this case, and must be avoided at all costs. You must want success for the stakeholders.)

Yes, but who are the stakeholders? In the eyes of those at the top that is.

That's my point. I believe (and this is only my opinion, I could be wrong) that Obama truly believed the employees of GM and associated suppliers/entities were his stakeholders, and he acted to protect them (as well as the much larger economy surrounding GM as a whole).

How do you ensure "decent people" are always at the top? I don't know. I'm not a terribly big fan of Obama (drone strikes, supporting the NSA), but he's done an OK job. Now Elizabeth Warren and Rich Cordway (director of the Consumer Financial Protection Bureau)? They're kicking all sorts of ass for the general public.

Find good people. Put them in charge. Get out of their way.

Exactly...we hear "free market economy" "advantage in efficient resource allocation" talk when Wall Street demanded deregulation, and that Glass-Steagall be repealed. Then when the rentiers start going broke it becomes "too big to fail" and President Bush signing TARP into law. The same thing happened in the 1980s - Reagan deregulated the banks, rentiers made money, then the S&Ls went bankrupt and the taxpayer was on the hook for the bill.

Then we have the 1979 government bailout of Chrysler...the 2009 government bailout of Chrysler...this company seems to need a bailout every thirty years...with some of the same talking heads shouting how the banks need to be bailed out denouncing the "socialism" of bailing out Chrysler.

Of course there was the 1971 government bailout of Lockheed as well.

Every year the US government sends $500 million to Iowa in direct farm subsidies...Senators Jodi Ernst and Chuck Grassley are against "socialist" measures that tend to go more to big cities in other states, but of course hypocritically demand the government give corporate welfare to the farmers in their state. Texas gets $400 million a year in direct farm subsidies, with the same hypocrisy surrounding it. At least Democrats are honest about what they're doing.

Then of course we have the net neutrality debates, with the backers of the AT&T/Verizon monopolists saying "get the government hands off the Internet". This is a laugh to people like me (and some others here I'm sure), who remember the days of ARPAnet and NSFnet and sri-nic.arpa and nic.ddn.mil and so forth.

Some people act like Red Guard students are still marching through Peking, throwing portraits of the Buddha in bonfires during a Smash the Four Olds campaign. In the modern day, the economy of the PRC does not operate all that differently than that of the US or Germany or some other country in terms of a "free market". The only different for the PRC is its economy has been booming since the 1980s much more than these other economies. Since 1990, every year the PRC's economy has grown 7% or more. That this might slow down for this quarter is what is eliciting surprise. Looking at the US economic downturns after 2000, and after 2008, it seems incredible that so many American pundits point to a slow quarter in the PRC's growth as signs of how they've been heading in the wrong direction all along etc. 7-14% economic growth every year since 1990 looks pretty good to me.

How do you think is planned economy unable to direct this effect? Maybe random faults even out arbitrary bias that would be introduced by regulation. How is a government spending tons on military not partially a planned economy?

Planned economy might direct this effect, but they don't - if the system gives leaders an option to prolong the agony, then they invariably use it, and the system suffers from it.

For examples in planned economies, USSR had a lot of examples, and this article is another. For examples in otherwise-freemarket-but-not-in-this-case economies, see "too big to fail" situation with bank bailouts, and your own example on USA military industrial complex - where failed projects get propped up instead of allowing them to die as they should, thus in the end harming the long-run perspective in the whole sector.

I kind of lived through this effect with the decline of the British coal industry which was nationalised at the time. It became uncompetitive mostly because British coal was hard to get at compared to say open pit mining in Australia, so money was lost on each ton dug up. But the argument against closing it was the miners needed jobs, it was hard for them to switch to other work, sacking them would kill the economy in mining towns and so on. It was easier for the government to pay the losses from taxes on the general population who didn't complain very much, than to fire a bunch of miners who would complain very loudly. And who did of course when Thatcher eventually fired them.

With hindsight it would have been better for the industry to decline gradually than laying off everyone at once.

Would you offer up the military industrial complex as an example of a planned economy NOT wasting money on dead projects?

Planned economies are not inherently unable to direct said effect. They just have a harder time reallocating resources from failing enterprises because of the political nature of resource allocation.

Look at a large corporation like IBM some floundering business units persist for decades because of the internal political cost of ending them when economically it is the prudent thing to do.