The Lancelot of economics, Alan Greenspan, was knighted by Queen Elizabeth II last week. But some top economists worry that the U.S. Federal Reserve Chairman has moved too slowly to slay the dragon they hear stirring: deflation. The term describes an economic slough of despond in which capacity exceeds demand, inflation drops below 0%, companies sit on their cash rather than investing it, prices fall and wages retreat. Workers paid low wages in inflationary times find their debt harder to repay if they get a further cut-a terrible prospect in this period of record credit-card bills. Deflation has devastated Japan since...
