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Greenspan doesn't understand the credit crisis
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Via Karen De Coster, I've come across this article today in the WSJ by Alan Greenspan, who insists the Fed isn't responsible for the housing bubble (and subsequent bust).
There are at least two broad and competing explanations of the origins of this crisis. The first is that the "easy money" policies of the Federal Reserve produced the U.S. housing bubble that is at the core of today's financial mess.
The second, and far more credible, explanation agrees that it was indeed lower interest rates that spawned the speculative euphoria. ...
I certainly wouldn't want to contradict King Alan, but does Greenspan really not realize that the Fed's "easy money" policies led directly to lower interest rates? When you want to find people to absorb all the new credit, you generally need to entice them with low interest rates.
The more stuff I read from people like Greenspan and Krugman, the more I realize their strategy is to say things that are so utterly absurd that it leaves us too dumbfounded to even respond.
It's like we're living in the Twilight Zone. But then again, I was no Fed chairman, so what do I know?
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