Front derailleur doesn't seem to be moving
There are basically 4 possibilities:


The derailer is bent.
The derailer is gummed up, has mud in it, or is otherwise being prevented from moving.  (You said the cable has been completely loosened, right?)
The limit screws are misadjusted
It's the wrong derailer for that gear setup.  Eg, a double derailer on a triple crank.


(It is curious that the decal says "8 speed" -- not something you'd expect as original equipment on a 27 speed bike.)

(It appears to be a down-pull style derailer, and it should center over the granny gear when the cable is fully released.)