Republicans were rebuked by the electorate on November 4th, but we can still see them out there in the woods, huddled around a fire, making plans to storm Castle Potomac again. Although their coded racist attacks failed to vanquish Barack Obama, they have successfully used the technique for decades, and they aren’t about to abandon it now—even immediately post-election. And in fact, while we’ve been busy congratulating ourselves on Obama’s upcoming presidency, a shiny new reconfiguration of the same old coded Republican racism has already been unveiled by hacks like Rush Limbaugh, Arnold Schwarzeneggar, and a rabid bat swarm of noxious rightwing bloggers.

The title of this article already revealed the climactic punchline of the new right wing routine, now here’s how the slippery set-up goes: Government mortgage giants Fannie Mae and Freddie Mac were created to make home ownership possible for low income Americans. They were once responsible in handling this chore, but in the last ten years, they were pressured by liberal groups into lending billions of dollars to people unable to responsibly manage debt. When those low-income borrowers defaulted on the loans, the financial shockwave brought on the mortgage crisis, which in turn triggered all the other crises rocking the globe. Got that? Now for the secret code that puts the new attack in perspective, go back to the header of this article, and substitute “black” for “low-income”.

Of course, you and I know that most sub-prime borrowers were white, but that fact has been conveniently glossed over. When it comes to matters of economics, everyday Americans subscribe to the one-drop theory—if there’s one black person involved, it’s a black problem. This belief has served Republicans well when attacking welfare and other programs. Like those attacks, this one is built around such tortured logic that you need M.C. Escher to deconstruct it, but I’ll see if I can do it in just a few paragraphs. First, let’s hear from economist Paul Krugman, of the New York Times, who wrote in a recent editorial: “…it’s now clear that the phony account of the crisis—that it’s all due to Fannie, Freddie, and nasty liberals forcing poor Angelo Mozilo to make loans to Those People—is setting in as Republican orthodoxy, part of what you have to believe to be a respectable member of the party.”

I quoted Krugman because he is one of the most esteemed economists in the world. He won a Nobel Prize back in October, and has published quite a few articles on race in America as it relates to economics. If he says this is happening, then it is. So that takes care of anyone out there who might suggest Republicans are making no such attack, and I’ve succumbed to paranoia. Republicans are indeed making a coordinated attack, trying for what must be the ten thousandth time to achieve strategic goals while simultaneously sticking it to black folks politically. Now that we’ve settled that, let’s deal with the substance—or lack thereof—in their claims about Freddie and Fannie.

Freddie Mac and Fannie Mae did own some sub-prime mortgages, and made up a substantial part of the market when that market was a fraction the size it eventually became. However, the companies targeted the lowest risk consumers, and were actually withdrawing from the sub-prime market during the height of the housing bubble. The vast majority of sub-prime loans came from the private sector, and it was the private sector that inflated the bubble to stratospheric proportions by disproportionately lending to uncreditworthy candidates, sometimes offering zero-down, zero-collateral loans that were scheduled to reset at higher rates down the line. By 2006, about 85% of sub-prime mortgages were issued by private institutions. By then Freddie and Fannie had decided to put on the brakes. Freddie Mac announced in February of 2007 that it would buy sub-prime adjustable rate mortgages only if the borrower qualified for the maximum rate of the loan.

So there’s no doubt—at least among the rational—that the fault for the mortgage implosion lies mainly with the private sector. They are the ones who got drunk on easy profit and didn’t know when to stop. How could they have gotten so out of control? Deregulation played a major role. Who are the champions of deregulation? Why, our friends the Republicans, still out there in the woods plotting their assault. While it’s true that a Democratic House stood idly by, and William Jefferson Clinton aided and abetted the crime before and after the fact, deregulation is a rightwing rubric that has been pushed by neo-liberal economists for the last thirty years.

It’s important to note—both political parties are surrounded by neo-liberal advisors, who have metastasized like cancer among Washington legislators. But it is Republicans who championed the deregulation that made sub-prime loans an intensely profitable option for Wall Street. Freed from oversight, the bankers were able to target any consumers they wished, and that’s exactly what they did. Republicans insinuate that the private sector was duped, that they heard a liberal siren song of universal home ownership that proved irresistible. But in the reality-based world, where the rest of us live, a business deal has two sides, and while financial institutions are inherently fiscally sophisticated, many consumers are not. The unsophisticated cannot trick the sophisticated into bad mortgage partnerships, nor can pressure groups force businesses to take risks. Private lenders saw an avenue for obscene profits and willingly marched ahead. Those are the facts, and pretzel logic won’t change them.

This brings us neatly to the most important part of this discussion—the idea of deregulation, which has been popularized over the last thirty years by the aforementioned neo-liberals. Has anyone else noticed how elitist this belief is? In every sector of society there are rules, accompanied by bodies that enforce the rules, yet in the realm of business there are to be no constraints save those that occur via the invisible hand of the market. The invisible hand, proponents claim, is law enough, because the men who live in the economic ether are a higher echelon of being who are immune to base instincts and act only in accordance with Newtonian laws of market equilibrium. Now, if I may say so without sounding too polemical, this is a giant crock of horseshit. If New York City were this mythical market, there would be no law against armed robbery because thieves would understand that robbing too many people would eventually leave them with no source of income. I can safely speak for everyone by saying we don’t want to try that experiment in lawlessness, even though a single armed robbery can harm at most only a few individuals at once. So in that case, why do we tolerate lawlessness in business, where a single bad deal can harm millions? If you can explain this to me, I’d absolutely love to hear it. Meanwhile, I’ll tell you what I think the answer is.

Going all the way back to the ancient code of Hammurabi, laws have been the most important factor in the advance and survival of civilization. Yet the majestic white men on their economic Olympus, who we peasants can see quite clearly have the morals of greasy-haired, goateed meth dealers, claim not to need laws. In that way the neo-liberal model is not just elitist—it is racist. Neo-liberalism is a pseudo-philosophy cooked up by greedy, wannabe aristocrats to trick citizens—all citizens, whether green, white, black, latino, native American or Asian—into allowing rich white men to live above the law. That’s the answer.

While there are a few women, and a few blacks, and lately a lot of Chinese and Arabs, who have gained admittance to the game, neo-liberal philosophy was conceived and etched in stone at a time when the big teak table atop Mount Finance contained only white men. Neo-liberalism is a form of coded elitism, yin to the yang of coded racism. In a desperate effort to stop poor and middle class Americans from looking behind the Wizard’s curtain and questioning the merits of our economic system, the neo-liberal right has launched a divide-and-conquer offensive in hopes that non-black Americans will retreat into the comfortable and familiar bosom of racist blame. The sheer breadth of this assault is astounding.

In four years, when Obama runs for re-election during what the neo-liberal Republicans hope will be a prolonged economic malaise, the plan is for this narrative to be front and center, just like that mythical welfare queen, and that infamous invocation of Willie Horton, and that still-fresh insinuation that Obama is a secret terrorist. The spook in the closet this time is “poor and undisciplined consumers who tried to live beyond their means”, but the game is the same and the name hasn’t changed and the color is the one you find in the last corner of your Crayola box. I guess we’ll just have to see if Americans have caught on.