Now the New Year has ushered in year five of the Great Recession, and here we are in the Rubiks Cube Economy. It is a scrambled mechanical puzzle, a multidimensional maze intriguing to players all over the world, a classic riddle of the intellect. You reach a false solution when you twist one face into alignment, and you think you've got it beat but in reality everything you do just scrambles it even worse. Frustrating, but not impossible.
Here are the false solutions that policymakers have engendered so far:
- Injecting money into the cube doesn't yield abundance. It's a good thing that consumers are too shell shocked by the rampant unemployment to spend, and that banks are too constrained to lend. Thank heavens for low monetary velocity which is the only reason that the billions of dollars infused by quantitative easing haven't hyperinflated our system yet.
- Twisting one face of the cube doesn't align the other faces. Operation Twist achieved little other than scrambling the yield curve. Tried to fix it, but just messed it up even more.
- Changing its stickers is too radical. Obama failed to do more than assassinate a dictator, yet was elected for a second term. His victory signals that as much as voters complain about the economic malaise, their decision to elect change.
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