The Australian went into the freezer the other day and dragged out … Giles Auty. Who’s he? Auty was the fogeyish art critic extraordinaire for The Spectator, transported down under a decade or so ago, where he plied his trade disliking almost everything made since 1910. On his own turf Auty ain’t a bad critic, but he was heavy into the paranoid style of “political correctness gone mad” type stuff. So what propelled him to dust off his quill, no metaphor?

Turns out it was our old friend the Community Reinvestment Act. You may have heard of the CRA, the 1977 bill piloted through Congress by Jimmy Carter. Drafted in a far off time when banks actually assessed people before loaning them money, the bill was designed to deal with the unwillingness of banks to give mortgages on properties within whole urban areas (i.e. burnt-out inner cities) even when the applicants (i.e. blacks, Hispanics, single women) seemed reasonable prospects for making the payments.

When the US financial system collapsed in September last year, the Right’s brief moment of cold reality and mea culpas about deregulation and free markets was quickly forestalled by hunting for the real culprit — regulation itself. The two private/public mortgage brokers Fannie Mae and Freddie Mac were fingered for extending loans based on Congressional quotas for neighbourhoods and ethnic minorities — but the CRA was held to be the real worm in the apple. As former Clinton advisor Paul Begala noted, laughing, “oh of course! The financial crisis is poor peoples’ fault! There’s a shock!”

The line was enough to attract virtual cut-and-paste articles from Gerard Henderson and Planet Janet Albrechtsen dunning the party line — but they, like most of the American Right, soon desisted from this line of reasoning, because it was obviously nuts.

As the US socialised its banking system, bought a slice of, and then took over entirely, its auto industry and the country’s second largest owner of shopping malls went into bankruptcy, it became clear to any rational human being that the problems went far deeper than any pissy little equal opportunity act by a government a generation ago. When you’re going broke selling cars and malls to Americans, something big is going on. Besides, the contradiction within the argument — that capitalism, this system of immense moral power stemming from the roots of very human itself, had been destroyed by something Jimmy Carter did one wet Tuesday when Keith Richards was still in his early thirties — were becoming so glaring that even the cable audience was noticing them.

Giles Auty still has his mail delivered by footmen of the von Thurn and Taxis noble family, so news reached him late. But what’s the excuse for the article which he quotes from extensively and suggests “should be supplied to every household in Australia” (fine Giles. There’s a photocopier, and there’s DHL couriers. Open your chequebook and let the free market do its magic).

It’s … oh it’s from Quadrant of course. An article entitled “George Bush and History’s Croakers” by Claudio Veliz, yet another article attacking big government in this generously taxpayer-funded publication. Veliz is that distinctive type, the Latin American Anglo-North-Americophile — a deep believer in the essential unity of political and economic freedom, and embarrassed by his continent’s doctrinaire surges. Which is pretty funny for someone from Chile, where the freedom of Milton Friedman required that “other thing” administered by Pinochet to make it happen.

Veliz is no fool — what he is however is a past-master at self-delusion. Like most South American Anglophiles — novelist Vargas Llosa and his prominent commentator son are others — are so enthusiastic about the quiet scepticism and anti-theory of the Anglo-world, in contrast to their crazy continent, that they apply to Popper, Friedman and Hayek all the quasi-religious enthusiasm most characteristic of politics in … South America. You can take the gaucho off the pampas, but … uh there’s no useful way of completing that reversioned homily.

The fact however, that Veliz can convince himself of this Fall from the Edenic realm of the free market is a measure of how desperate the Right are to maintain the illusions that sustain them — and how far they are from a real reckoning with the deepest contradiction they face — that capitalism is not an adjunct of order and virtue, but a chaotic system which sometimes coincides with human advancement, but ultimately serves nothing but itself.

Funny really. Keith Windschuttle, Veliz’s current editor, was particularly stirred by the Pinochet coup — introducing to Australia the anti-CIA cultural studies manual par excellence “How To Read Donald Duck” (about recognising US propaganda in innocent pop culture) and urging its promulgation in the “red bases” of university media studies departments, then springing up in places like RMIT and NSWIT — preparation for the day when Fraser’s fascist jackboot would descend on the country, and the day of the Lynch-Doug Anthony junta was at hand.

What fun times the two old croakers must chuckle about in the Quadbunker over steaming mate (that’s mart-ay, the Argentinean herbal drink, not a hot friend).

Meanwhile, anyone wants a real assessment of how little role the CRA played in the current crisis can turn to a review article and summary in Catallaxy. Yep, Catallaxy. Even that libertarian giggle-palace thinks the argument is a crock. When that happens, it’s time to put the movement up on blocks and have a look around the insides.

Guy Rundle will be appearing on ABC TV’s Q&A tonight at 9.30pm

Peter Fray

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Peter Fray
Editor-in-chief of Crikey