23 Sep 2008

Wall Street Apologist Chadwick Latches on to Austrian Business Cycle Theory

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At first I was really excited by this article linked from CNBC’s main page. The writer, founder of Ravengate Partners, early on sounds like Rothbard:

There is a long trail to the current financial crisis. Listening to our Government leaders blaming Wall Street greed for the entire debacle begs a response. The Government itself is an accessory before the fact to the state of affairs we find ourselves in today. Let’s review:

In the beginning – there were bad lending practices. And they are at the core of this extraordinary mess.

What was at the heart of the bad lending practices? The Federal Government!! Under both the Clinton and Bush administrations, it was government policy to encourage the private sector to ease underwriting standards in order to expand housing ownership in the U.S. The Federal Reserve under Alan Greenspan was an enabler in that development, by employing a monetary policy that kept interest rates exceedingly low, to the benefit of mortgage seekers. So lay blame on the US Government for bad policy.

But then she–and yes the founder of Ravengate Partners is a “she,” did you assume I was criticizing a man this whole time?–proceeds to blame everybody else outside her industry in very broad strokes. But when it comes to her industry, she concedes that “SOME (not all) Wall Street firms” (her caps) contributed to the current crisis.

In the grand scheme, I don’t think it even makes sense to ask what Patricia Chadwick thinks about Austrian Business Cycle Theory. But I guess it’s still a good sign that ABCT is now credible enough to make it into someone’s talking points.

UPDATE: When I first read the article above, I didn’t understand this line: “So lay blame on Wall Street for [w]recklessness.” (It is in bold and ends one of the paragraphs.)

I think I get it now: In her original submission, she had called for blaming Wall Street for “wrecklessness,” and then a CNBC editor contained the “w.” Does that strike anyone else as ironic? It has so many meanings…

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