And it hit me like a ton of bricks, for a very long time it was believed that the engine of economics runs like a big fancy Rolls-Royce 16 cylinder machine. An elaborate motor with several pistons running, sometimes parts can go bad and impair a portion of the movements but the overall motion continues with the other pistons that still function. This work of art managed to "turn the crank" of the economy with some of the pistons not working at all. Adjustments can be made to the pieces as it ran and it would get back to full steam over time. If too many pieces broke it would then stop, but all you needed to do was throw out what was broken, then put in new pieces using the same tools you had used for maintenance and it would start up again. This is what we call the Austrian school of thought.
The goal phor 2009 is to replace an incandescent bulb with an alternative, relatively more ephphicient, light emitting device. Within the execution of the machine, it is encouraged to demonstrate within some step that the incandescent light bulb does indeed work. Though it is encouraged to show the incandescent bulb lights up, it is not required.
Later on some folks decided the world's economy was better off if we used a gigantic fancy watch with a plethora of gears, cogs and balances. It was believed that a constant tinkering with the size and shape of pieces could allow it to run forever. If this "money clock" started to sputter or jump about, you just needed to tinker with the pieces to get it back into syncopation. This machine never stops spinning but it gets really hard to keep track of the time and you are always running the risk of being too late or too early for something important. You never have to worry about it stopping but you also gave up on reliability. This is the Keynesian economics theory.
Ben Bernake has a new kind of machine going now. Having lost track of how all those little gears and cogs go together he has given up on fixing the "money clock" and has simply thrown all the pieces into a gigantic Rube Goldberg machine. And every time the little brass balls fall of the track, he tacks on some more alphabet soup pieces to make it roll again.
This machine he built has left us with only two possible outcomes, it will either come crashing down into a gigantic mess or continue growing hasty patches and fixes forever.
He probably wishes he could roll out the old 16 cylinder engine to run the economy, but he sold that off to a Far East trader a long time ago.
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