Go Ask Alice

We have yet to discern any effect on the overall condition of the economy from the injection of all that credit into the banking system. Banks are still not lending, even though the markets world wide seem to have been calmed by the action. But it feels like the calm before the storm; even with the right policy mix--TAX CUTS--things would still be long in turning around. All this demand-side Keynesian pump-priming is not going to be any more effective than pushing on a rope, a lesson taught not only by the great depression, but also the lost decade of '90s Japan. The two trillion already gone down the rabbit hole hasn't visibly changed anything; will another trillion or two? The head-scratching thing about what we are witnessing, and you must pardon the mixed metaphor directly ahead, is that piling more debt onto the mountain we already have flies in the face of that well known bromide regarding holes and shovels: if you find yourself in a hole, the first thing is to stop digging. Obama and the New Geniuses instead are calling for backhoes and power shovels, with the idea that only if we dig in deeper than ever before can we get out of this hole that the evil, witless, and craven George Bush got us into. "This is the deepest hole we've ever been in, and that is exactly why we need to dig even deeper."

Sounds like something the Red Queen would say to Alice. Welcome to Obama's Wonderland.