Alan Greenspan - The real culprit of the current economic crisis

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.

Why the "bad" economic news is good

by Llewellyn H. Rockwell

Sometimes the bad news is the good news. So it is with the report that retail sales are down by 0.1 percent in July, the sharpest drop in many months.

Why good news? It means that consumers are starting to cut back. They could be going into less debt. They might be saving more. They are being more careful about long-term plans pending short-term trends.

These are all preconditions for recovery. It’s only bad news if one adopts the crude theory that economies are sustained by consumer spending. The truth is nearly the opposite. Consumer spending is the final payoff for the less visible foundation of growth, which is real saving and investment – that is, making the choice for the future over the present. What declines in retail spending indicate is a coming to terms with reality.

For more on this commentary, go to LewRockwell.com