The best commentary on Fed policy currently out there is a do-it-yourself animated short called Quantitative Easing Explained. The 6-minute, 48-second cartoon features two stuffed animals, drawn in Pokemon style, talking about monetary policy. Specifically, the bears-or are they dogs?-point out the illogic in the official Federal Reserve position that today the danger of deflation is greater than that of inflation. The animals also criticize the Fed officials' recent pursuit of QE2, the acronym for its decision to inject $600 billion into the economy. More than 3.5 million people have watched the video, and it was posted on YouTube in November. The big question is why a home movie gets through to people in a way that a million words of news commentary have not The answer is that news commentary has been corrupted, perhaps irreversibly, by an attachment to economic theory.
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