|Throwing trillions of taxpayer dollars at private banks is a lot of things - it's somewhat socialist in that public money is intervening in the market, though really it's far more authoritarian capitalist. But one thing it is not is "entirely consistent with free-market principles."
And really, so much of what our government has always done is entirely inconsistent with free-market principles. Our trade policy, for instance, includes all sorts of protectionist measures (patent and copyright protection, for example) and market subsidies, but prohibits Americans from purchasing lower-priced medicines from abroad. Our national security apparatus is plagued with no-bid (ie. anti-free-market) contracts. Anti-trust enforcement - critical to a free-market - has been gutted in the last generation. The list goes on.
Now, let me say the obvious: While in the aforementioned examples, the brushing aside of free-market principles has hurt the country, it's good news that some of Obama's proposals aren't "entirely consistent with free-market principles" - because in many cases, "free-market principles," left to their own devices, can have catastrophic consequences (see meltdown, 2009 economic). It's a good thing, for example, that Obama promised during the presidential campaign to create a publicly-funded option for universal health care. Likewise, it's a good thing that parts of the Obama administration seem more interested in considering bank nationalization.
What's not a good thing is Obama effectively validating the right wing's frame. In going out of his way to insist he's for the "free market," the president is signaling that he believes that the "free market" must always be worshiped and publicly glorified, even though this is an historic opportunity to reframe the entire debate on far more pragmatic, less ideological, terms.
I'm not saying he has to go out there and say he's a socialist (which, empirically, he most decidedly isn't) - but I am saying that there's a big political risk in his continuing to act as if the right's artificial economic frame must always be respected. That behavior legitimizes the "free market" metric - it says he believes he should be judged on that metric (ie. how "free market" a given proposal is), instead of being judged on other metrics (ie. how well a proposal works) that are far more important.