The 2008 financial crisis of the US was a watershed for economics discipline, especially macroeconomics. A part of the reason was macroeconomic policies based on the Chicago school's ideology that unfettered free markets self-regulate based on strong assumptions that people are perfectly rational, maximize self-interest as autonomous agents, markets are frictionless (no transaction costs), there is perfect information and there is no moral hazard behavior for separation of ownership and control of capital. In real world most of these assumptions fail to hold. This article traces the underlying factors for the crisis and emphasizes the need for regulation of financial markets.