by Stefan Karlsson
With no one denying anymore the obvious fact that America is in a deep slump, the discussion has instead shifted to why it happened. The Austrians (including me) who predicted these problems based on Greenspan's low-interest-rate policy know of course that the main cause was that low-interest-rate policy, with his numerous bailouts of failed financial institutions also creating a moral hazard that encouraged risky behavior.
But non-Austrians who for various reasons seem determined to exonerate the central bank have instead offered various other explanations. I will not here answer them all here. Instead, I will simply comment on the most common alternative explanations and the various arguments used for the explicit purpose of exonerating Greenspan.
For more on this op/ed, go to Mises. org.