When someone watches their core beliefs crumble in front of their eyes, a bit of denial is probably understandable. Failure of an ideology to which one is rabidly committed is pretty disorienting, after all. That seems to be what is happening to various believers in hard-right, free-market orthodoxy. Banks were collapsing, loans freezing up and Congress had to rush in with a huge bailout package; this is not a good time to be singing the praises of unfettered free markets. So some are looking for an excuse âÄî among them, Michelle Bachmann from MinnesotaâÄôs 6th Congressional District. SheâÄôs part of a chorus of far-right ideologues looking for some way to blame liberals for the credit crisis. It would be too hard to admit that hard-right economic policies may have failed âÄî instead, the leftists must have done something to send us off track. Bachmann and others settled on a bizarre strategy: blame minorities. While giving a speech to the House of Representatives, Bachmann approvingly quoted an article from âÄúInvestorâÄôs Business DailyâÄù that blamed the 1977 Community Reinvestment Act for the explosion of bad loans. The CRA requires banks that receive federal insurance to lend within their own communities, with the idea of encouraging homeownership in poorer areas. Bachmann and others have seized on that law, claiming that the CRA forced banks to give out bad loans to people who would only default. Before the law, banks could âÄúredlineâÄù entire neighborhoods and refuse to loan to people living in them âÄî the redlined neighborhoods were, of course, usually low-income, minority communities. In her speech, Bachmann blamed the CRA and the Clinton administration for forcing banks to give out loans âÄúon the basis of race and often little else.âÄù Because of these requirements, the argument goes banks gave out a bunch of loans they wouldnâÄôt have otherwise, the people who got those loans only because of race ended up defaulting, and the entire financial system began to crumble. That just isnâÄôt true. The CRA, like I mentioned, only puts requirements on banks that get federal insurance âÄî the vast majority of institutions dishing out subprime loans donâÄôt fall into this category. Banks subject to full CRA requirements only made about a fourth of all the subprime loans. The real culprits were institutions that didnâÄôt have to follow any regulations âÄî CRA or otherwise âÄî at all. Those independent lending organizations thought they could profit by writing the risky loans, and they ended up being wrong. The CRA has been around for 30 years with no ill effects, and thereâÄôs absolutely no evidence that it had anything to do with creating the current crisis. BachmannâÄôs argument is a great example of trying to shift blame away from failed right-wing policies and instead make liberals the scapegoats. ItâÄôs an argument that comes built-in with unfettered free-market economics. If you start from the assumption that a completely unregulated economy is always best, whenever something goes wrong you need an excuse. The standard line is âÄúthe market wasnâÄôt free enough.âÄù If the economy has gone awry, then there must be some kind of government act getting in the way of the power of the free market. The poor banks must have been forced to write the bad loans. In this case, market extremists have focused on either the CRA, or the Fannie Mae and Freddy Mac combination. But theyâÄôre wrong âÄî nobody has any evidence at all that too much regulation brought about the crisis. Some have tried to argue that Fannie Mae and Freddy Mac are to blame, since they are required by law to support affordable housing. But again, those requirements had nothing to do with the crumbling credit markets. Fannie and Freddy operate under strict standards that do not allow them to write subprime loans. They were taken down by the same forces that crippled the other lenders: when the subprime bomb exploded, it affected everyone in the home-loan game. Bachmann and the rest of the far-right group blaming too much government regulation for our problems need to face the facts. It might be difficult to admit that, occasionally, a bit of government oversight isnâÄôt a bad thing. Their entire market philosophy revolves around deregulation. But in their scramble to blame this latest flare-up on regulation, theyâÄôve become embarrassingly desperate. Rep. Keith Ellison stepped up and pointed out that neither the CRA nor Fannie and Freddy are to blame here. Instead, we need to admit that decades of continued deregulation created a market primed to fail. WeâÄôre never going to be able to fix the problem until we acknowledge the cause âÄî itâÄôs a bit like Gov. Sarah Palin claiming she doesnâÄôt care about the causes of global warming but really wants to fix it. Every serious analysis of our situation has come to the same conclusion: We need to begin writing regulations that can keep up with the ever-more-complicated financial sector. Most observers have come to that realization, but a few âÄî like Bachmann âÄî continue to cling to a right-wing pipe dream that this is all the fault of the liberals. Congress finally managed to ram through a bailout bill at the end of last week, but that measure is at best a temporary fix. We need leaders ready to admit that the last few decades of continued deregulation have failed. Government can play a constructive, responsible role in keeping the markets stable: blind adherence to a fringe ideology will never get us anywhere. So, if youâÄôre from St. Cloud (BachmannâÄôs district), perhaps itâÄôs time to consider whether you want to be represented by someone with ideological blinders on. Bachmann has responded to the crisis by supporting the Free Market Protection Act âÄî the name alone tells you all you need to know. ItâÄôs another attempt to ignore the real problems weâÄôre facing and instead advance a failed philosophy. It doesnâÄôt do any good to try to pass the blame off to someone else. John Sharkey welcomes comments at [email protected].