The United Nations Security Council in session, September 24, 2009

The United Nations Security Council convened on Saturday to consider a resolution that would call on Syrian president Bashar al-Assad to cede power to a transitional government.

Russia, which was expected to veto, said the resolution wasn’t “hopeless” but needed to avoid “taking sides in a civil war.” Russia’s deputy foreign minister warned last week that, “Pushing this resolution is a path to civil war.”

After what American officials described as “vigorous” talks with Secretary of State Hillary Clinton, Moscow announced that its foreign minister, Sergey Lavrov, would fly to Syria early next week to meet with President Assad.

The French, who, last year, played a key role in enacting a Security Council resolution that empowered NATO to intervene in Libya’s civil war, have staunchly sided with the Sunni monarchies that suspended Syria from the Arab League in November and called on the United Nations to take more forceful action against Damascus last week.

Qatar has already voiced support for an armed intervention. Turkey, which maintained amicable ties with the Ba’athist regime before the uprising, said it had “lost confidence” in President Assad’s willingness to reform. The Turkish foreign minister last week said that his country was prepared “to do everything for the Syrian people” although he stopped short of endorsing calls for military action.

The French foreign minister, Alain Juppé, said recent killings in the western Syrian city of Homs, which has been a hotbed of the unrest, amounted to a “massacre” and proved that “Syrian authorities have jumped a new hurdle in savagery.”

In remarks that were clearly aimed at Moscow, Juppé further suggested that any country that blocked international action would bear a “heavy responsibility in history.”

The Russians may not be persuaded. They maintain strong trade relations with Syria, including billions worth of annual arms sales. The Russian navy’s only deep warm water port is situated on Syria’s Mediterranean coast.

Moscow is also concerned that a resolution could pave the way for foreign intervention as happened in Libya last year. The Russians weren’t pleased to see NATO take sides in what they considered to be an internal conflict.

If Assad falls, he would likely make way for an administration that is dominated by Arab Sunnis who might be tempted to align their country to the Arab Gulf states, including Saudi Arabia, who are generally favorable to American and Western interests. Russia would then be without leverage in the Middle East.

Finally, the Kremlin may worry that if the Syrian uprising manages to oust President Assad, it will embolden separatist movements in its outer provinces and former satellite states which could damn Prime Minister Vladimir Putin’s hopes of establishing an Eurasian Union under Russian leadership before he has even had a chance to reunite the former Soviet Union.

Britain's chancellor of the exchequer, George Osborne, prepares a speech at 11 Downing Street in London, June 22, 2010 (Andrew Parsons)

Britain’s economy contracted mildly in the final quarter of last year and is expected to shrink again in the first three months of 2012. Critics of the ruling liberal-conservative alliance blame austerity for the lack of growth but this is false. The fact is that London has hardly begun to cut spending.

Prime Minister David Cameron and his chancellor, George Osborne, insist that Britain can’t borrow its way out of debt crisis but they are trying to do just that.

Total public sector spending, in real terms, was almost 4 percent higher last year than it was in 2009, Labour’s final full year in power. It is projected to grow further this year, necessitating some £120 billion in borrowing and raising the nation’s debt to the equivalent of 62 percent of annual economic output.

The government has pinned its hopes on the Bank of England which has injected roughly £275 billion into the economy, corresponding to nearly 20 percent of gross domestic product.

Cameron supports the policy. He ruled out fiscal stimulus last summer, saying that no country can afford it anymore. “They have all run out of money.” But creating money out of thin air is just fine, even if it hasn’t encouraged banks to lend more to small businesses which is its stated aim.

There have been across the board cuts in projected spending increases—which the Labour opposition laments have been “too fast” and “reckless”—but no supply side economic reforms.

David Cameron last year vowed to fight the “enemies of enterprise” and cut regulations but hasn’t yet. He knows that “the real solution” to Britain’s economic woes “is more enterprise, competition and innovation” but one out of five Britons is still employed by his government which eats up half of the country’s GDP. The top income tax rate was even raised by one percentage point in order to reduce the deficit.

This isn’t austerity. It’s a timid approach to fiscal consolidation that lacks the political will or conviction to enact a pro-growth agenda simultaneously.

An Israeli F-16 fighter aircraft, January 18, 2011

War seems imminent again. According to The Washington Post‘s David Ignatius, the Americans believe that there is a strong likelihood that Israel will strike Iran before June of this year when Iran is expected to enter what the Israelis described as a “zone of immunity” to commence building a nuclear bomb.

“Very soon,” he writes, “the Israelis fear, the Iranians will have stored enough enriched uranium in deep underground facilities to make a weapon—and only the United States could then stop them militarily.”

Israeli Prime Minister Benjamin Netanyahu doesn’t want to leave the fate of Israel dependent on American action, which would be triggered by intelligence that Iran is building a bomb, which it hasn’t done yet.

The United States are reluctant to engage in military action against Iran. Attacking the country carries great tactical and strategic risks.

Iran has threatened to shut the narrow Strait of Hormuz if menaced which would put roughly 40 percent of the world’s seaborn oil transports at risk.

Tehran has more retaliatory options at its disposal across the Middle East. It could seek to incite Shī’ah violence in Bahrain and eastern Saudi Arabia as well as in Iraq where there are no longer American forces to quell sectarian unrest. The Iranians could also encourage Hezbollah to initiate a renewed missile barrage against Israel. Reportedly, the Israelis are anticipating such a counterstrike and expect casualties on their side to number in the several hundreds.

According to Ignatius, Israel believes that a military strike could be limited and contained. “They would bomb the uranium enrichment facility at Natanz and other targets; an attack on the buried enrichment facility at Qom would be harder from the air.”

This would appear to confirm a 2004 report in the German magazine Der Spiegel which said Israel had prepared a “complex yet manageable” plan of attack against six nuclear sites which were to be bombed simultaneously. The scenario envisioned Israeli jets traversing Iraqi airspace. With the Americans no longer present in the country, that could be complicated.

Israeli fighters are more likely to fly over southern Turkey or northern Saudi Arabia to reach their targets now. Neither country wants to have another nuclear neighbor.

The mountainous terrain in the northwest of Iran inhibits the country’s antiquated radar warning systems from spotting the Israelis from afar which makes the northern route an attractive one. Turkey, however, likes to think of itself as an interlocutor between Iran and the West and does not want to be perceived as an ally of Israel’s anymore.

The Saudis, by contrast, are engaged in something of a cold war with the Iranians and wouldn’t stop Israeli aircraft from overflying their northern desert. They have even warned that if Tehran gets the bomb, other powers in the region (i.e., Saudi Arabia) will seek a similar weapons capacity.

Ballistic missiles probably aren’t an option for Israel because they aren’t as accurate as aircraft delivering precision guided munition.

Iran’s nuclear facilities are scattered and concealed. It would be nearly impossible for an attacker, whether it’s Israel, the United States or both, to take out all of the Iranian nuclear sites in a single strike even if their bunker busting bombs are capable of obliterating the ayatollahs’ fortified positions. A unilateral Israeli strike this year would at best set the Iranians back several years in their alleged quest for a nuclear weapons capacity. Indeed, it would likely strengthen their conviction that Iran needs the ultimate weapon to defend itself against Israel.

Republican senator Lindsey Graham of South Carolina appears on Fox News' On The Record, February 2

Republican senator Lindsey Graham voiced concern about the future of American military involvement in Afghanistan a day after his country’s defense secretary, Leon Panetta, had told NATO allies in Brussels that the United States could suspend combat operations as early as 2013, a year before the alliance is scheduled to transfer security responsibility to the Afghans.

Graham, a South Carolina native and Air Force veteran, is a noted national security hawk who previously questioned the administration’s decision to withdraw thirty thousand surge troops from Afghanistan before the end of this year. “This is all domestic politics,” he said on Fox News’ On The Record on Thursday. “There is no military commander suggesting that we pull out in September of this year the surge forces.”

In bringing home tens of thousand of troops this year, President Barack Obama overruled his military advisors who recommended a slower withdrawal. Admiral Michael Mullen, the former chairman of the Joint Chiefs of Staff, told Congress last June that the president’s plans were more “more aggressive and incur more risk” than he was originally prepared to accept. Before he resigned in July, defense secretary Robert Gates acknowledged that waning popular support for the grinding military effort was a factor in the government’s decision to draw down forces at a faster pace.

“If we take combat operations off the table in 2013, that’s the second fighting season we’ve lost,” Graham lamented. He worried that General John Allen, the commander of international forces operating in Afghanistan, wouldn’t have the resources necessary to expand his counterinsurgency effort into the eastern tribal regions where the Taliban maintain an active presence.

Defense secretary Panetta insisted that Western troops “will have to be fully combat ready” and will fight “as necessary” even as native forces assume the security lead. However, few NATO countries are still willing to see the war through.

Just two weeks ago, France suspended its combat operations after four servicemen were shot and killed by a local trainee. President Nicolas Sarkozy, facing a war weary electorate as well, could pull out French forces by 2013, a year ahead of the 2014 deadline that was set by NATO two years ago.

These moves communicate a weakness to the insurgents, said Graham. “If you’re trying to win a war and negotiate with the enemy, you want to do so from strength.” Republicans are critical of setting deadlines for troops withdrawals altogether, fearing that the Taliban will bid for time and return to power once Western armies have left the country.

Asked what advice he would give the president, Graham said, “What I think he should do is enter into an agreement with the Afghan Government at their request to have military bases in the country, three or four, past 2014, with air power and Special Forces units that can defeat the Taliban in perpetuity. Then you negotiate with them. Not now.”

There may not be the political will to commit to Afghan security in the long term. Vice President Joe Biden told NBC News in December 2010 that the United States were “gonna be totally out of there, come hell or high water, by 2014.” Other administration officials have been less adamant but far from clear on what, if any, military engagement the president envisions in Afghanistan beyond the 2014 deadline.

Protest in Cairo's Tahrir Square, Egypt, February 25, 2011 (Joel Carillet)

There is a narrative at work. Man has evolved from a savage uncivilized species to a level of sophistication which is today best exemplified by the Western world. This view of history is linear, it allows only for Hegelian progress and it is also ethnocentric since it makes Europe and America the leaders of human progress. Huntington’s “Western civilization” concept reflects this view.

When large political upheavals take place, most of the commentariat resorts in a Pavlovian fashion to this narrative to explain them. Thus is the case with all the series of revolutions since the fall of the Berlin Wall. The Velvet Revolutions, the color revolutions and now the Arab spring are all framed as being just one more step in the world’s adaptation to the Western concept of society and civilization. But are they?

If that were the case would they all happen to happen in Europe’s periphery? We have not seen dominos fall in sub-Saharan Africa, in South Asia or in the Far East.

The truth as British historian Timothy Garton Ash puts it is that:

One might suggest that the best chances are to be found in semiauthoritarian states that depend to a significant degree, politically, economically and, so to speak, psychologically, on more democratic ones—and most especially when the foreign states with the most passive influence or active leverage on them are Western democracies.

NATO states gave their best efforts to influence the elites of the Central and Eastern European states during the Cold War. Propaganda and subversion activities aside, even if very few of these intellectuals actually visited the West, Western books and culture were predominant in the world and therefore also to a degree, behind the Iron Curtain. It is no surprise that Western influence continued to be felt in spite of Soviet censure since that had always been the case prior to the Cold War. Russian, Polish or Serb elites had always drifted westwards in search of inspiration and that did not change with the old continent’s division in ideological blocs.

The same holds true for the color revolutions in Russia’s “Near Abroad.”

What to make of the Arab spring? Unfortunately the same. It is not just a matter of European neighbors being demographically bigger and economically stronger, it is also the fact that the international narrative is dominated by European encultured states and societies: Europeans have colonized most of the world and the cultural standard is today a socially liberal, free market economy oriented, democratically ruled nation state.

Phenomena such as brain drain and soft power only further emphasize this tendency. Where do the wealthiest and brightest Arabs study and obtain their entertainment if not in Europe and America? Sayyid Qutb sensed this very phenomenon and called it Jahiliyyah—referring to the prevalent “ignorance” prior to Islamic rule to categorize a contemporary prevalent corruption from within which hinders Islamic values.

What is important to understand is not that Western values are wrong but that they aren’t absolute. They may make sense to Westerners but not necessarily to other cultures and it is wrong to frame every political struggle as a conflict aiming at emulating the West. This has been done before by the Orientalists who analyzed eastern cultures only by holding them to a Western standard.

The consequence of this narrative is a growing décalage between the perception of reality and reality itself. Al Jazeera is a perfect example of a corporate culture which is embedded with graduates of European and American universities and which covered the Arab spring—and the terminology here is telling—as a struggle for democracy and liberalism, as if the values of the nonsecular protestors who prayed in Tahrir Square were reason for shame.

The mishaps of this décalage are evident in all of these cycles of revolution with socially conservative and illiberal parties and politicians “surprisingly” emerging in Central and Eastern Europe and the Arab world. Who knew that the same people who toppled dictators were prejudiced against homosexuals and Jews? Antisemitism, Euroskepticism, homophobia or misogeny are just some of the most depressing gifts that media such as Al Azhar magazine or the Polish Radio Maria, bring us from these revolutions.

The most direct effect is counterrevolution and reactionary movements which view Western intervention and influence as intrusion in domestic affairs and turn to Moscow or Beijing for investment, trade and strategic relations.

Liberal elites are frequently the vanguard of revolutions in the West’s periphery but the people these intellectuals claim to speak for and liberate don’t often identify themselves with their Washington Consensus agendas. The Arab revolts cannot be Twitter or Facebook revolutions when most Arabs don’t use the Internet, much less in English, and they should never have been portrayed as liberal democratic revolutions when those values are indigenous only to Europe and European colonized territories.

Mitt Romney's campaign bus departs Florida, February 2

The Republican Party’s presidential primary race moves west over the next several days. After cementing his frontrunner status in southeastern Florida on Wednesday, Mitt Romney is expected to do well in Saturday’s caucuses in Nevada but the likely outcome in Colorado and Minnesota is less clear.

Romney, a Mormon, will likely appeal to fellow members of his church in Nevada who make up some 20 percent of the Republican electorate there.

When he last ran for the presidential nomination in 2008, Romney won the state’s caucuses easily. Newt Gingrich, however, polled at 25 percent in late January and both Ron Paul and Rick Santorum hope to do well in the Silver State. They hardly competed in Florida, where it was winner takes all, in order to focus on Nevada where delegates are allocated proportionately.

Twenty-eight delegates are at stake in the state that’s best known for its gambling industry in the cities of Las Vegas and Reno. Barack Obama carried Nevada in 2008 but only won the urban districts. The rest of the state is sparsely populated but very conservative if not libertarian.

Paul, whose campaign is staffed by supporters who are very enthusiastic about their cause, may do surprisingly well in Nevada, especially as the statewide Republican Party was thrown in disarray by a miserable 2010 midterm Senate race when Tea Party candidate Sharron Angle failed to beat the Democratic incumbent despite preelection poll numbers that suggested a Republican win.

The septuagenarian congressman from Texas could also exceed expectations in Colorado on February 7. A swing state like Nevada, Colorado’s rural areas trend Republican. Paul’s message of limited government and a noninterventionist foreign policy should resonate there. The president’s approval rating is just 40 percent across Colorado which is down from 52 percent in 2009, an above average drop in support according to Gallup.

The Nevada and Colorado caucuses are closed to registered Republicans which is a disadvantage to Paul who appeals to dissatisfied independent voters. Minnesota’s caucuses, which will also be on February 7, are open to non-Republicans but according to January polls, Gingrich enjoys an almost 20 percentage point lead over Mitt Romney in the Midwestern state.

Between them, Colorado and Minnesota wield seventy-six delegates and they are awarded proportionately. Even if Romney wins, the other three candidates could accumulate delegates for the national convention in Tampa, Florida in August. Gingrich and Paul have both vowed to stay in the race to the very end which raises the prospect of a brokered convention. If none of the presidential hopefuls manages to secure a majority of delegates before the convention, they could be unbound after several unsuccessful ballots and vote for a candidate who didn’t even participate in the primary contests.

There will also be an election in Missouri on February 7 but the outcome is officially meaningless. The state’s fifty-two delegates won’t be selected until March 17 when the state caucuses. Almost half of them will be awarded proportionately.

Mitt Romney is expected to carry most if not all of the states that vote in February. Newt Gingrich should have an opportunity to rebound in early March when, on Super Tuesday, ten states vote at once. Among them, the former House speaker’s home state of Georgia as well as Oklahoma and Tennessee, states in the Upper South that are solidly Republican and home to millions of evangelical Christians who wonder whether Romney really is socially conservative.

Obama is hugely unpopular in Oklahoma and Tennessee. His approval rating hovers around 30 and 37 percent in these states respectively. A majority of voters there will almost certainly support the Republican candidate in November’s election and may be tempted now to nominate the man who presents himself as a true conservative compared to the “Massachusetts moderate” which is how Gingrich likes to characterize his rival.

Trees near Matamata, Waikato, New Zealand, September 12, 2011 (Cuba Gallery)

A United Nations panel of heads of state and environmental ministers on Monday warned that the world can no longer afford to ignore the ecological impact of growth and “must define what scientists refer to as planetary boundaries” beyond which human activity could wreck the planet.

The secretary general of the United Nations, Ban Ki-moon, said, “We need to chart a new, more sustainable course for the future, one that strengthens equality and economic growth while protecting our planet.”

A report that was released by the group drafted fifty specific policy proposals. Among them, a recommendation that environmental and social costs be somehow factored into how the world measures economic activity and a revised measure of wealth that goes beyond the “narrow” calculus of gross domestic product.

If this sounds familiar, it should. Exactly forty years ago this year, the Club of Rome, a group of notable academics and industrialists, predicted in a study titled The Limits to Growth that population growth, industrialization and resource depletion would ultimately inhibit the global economy’s ability to expand.

The Limits to Growth echoed the predictions of Thomas Robert Malthus who, as early as the eighteenth century, before the Industrial Revolution changed the world forever, advocated population controls to prevent people from reproducing at an “unsustainable” rate.

Even if the Western world has seen only growth since, Malthusianism never died. There was Thomas Friedman last year, writing in The New York Times that the planet was on the verge of crossing a red line on growth, climate, resources and population “all at once.”

We are now using so many resources and putting out so much waste into the Earth that we have reached some kind of limit, given current technologies. The economy is going to have to get smaller in terms of physical impact.

Friedman proposed to move away from “consumer driven growth” toward a model that is “happiness driven,” based on people “working less and owning less.”

See where this is going? When supply appears to stall, the natural instinct of liberals is to equalize and ration. Just as Malthus couldn’t envision the world ever breaking out the “trap” he had set, today’s environmentalists cannot imagine that man will ever survive on anything but existing resources.

The supposed finiteness of supply conveniently serves their larger purpose which, as President Barack Obama so neatly put it, is to “spread the wealth around.” If there’s less to go around, they argue, we should all suffer equally. Or, as Margaret Thatcher said, they “would rather the poor were poorer, provided the rich were less rich.”

We have been warned for decades that industry and overconsumption will wreck the planet by nearly the same people who believe that demand drives growth and economies should be flooded with cheap money if there’s a contraction yet here we are, despite the recent downturn, in an age of abundance.

There is only so many times you can cry wolf before people start to wonder whether disaster truly looms on the horizon.

Time and again, human enterprise, ingenuity and technology propel us toward higher standards of living. In those parts of the world that are economically freest, people enjoy more and more diverse food than ever. There is an ample supply of natural resources to fuel our cars and power our factories for generations to come, if only governments would allow companies to drill and extract.

There is a mistaken belief that because resources are finite, so is growth. This confuses the engine of economic expansion for the mere presence of resources which would be perfectly useless if not man learned to make use of them. He, specifically his mind, is what makes progress.

If there is less coal, we’ll drill for more oil. If there is less oil, we will switch to using more natural gas. If there is less gas, we will certaintly find ways to make wind and solar profitable. (Hint: subsidies aren’t helping! Actually, they discourage innovators from improving the technology.)

The fact that we’ll add more people to the world population than ever before over the next decades is not to say we should grow at a slower pace and consume and produce and work less. There is nothing romantic or “happy” about living in hunger and poverty, Mr Friedman. We should work harder instead! The Earth may be limited but the human capacity to create and improve is not.

Hina Rabbani Khar, Pakistan's foreign minister, addresses the World Economic Forum in Davos, Switzerland, January 26 (Remy Steinegger)

Pakistan’s foreign minister on Wednesday rejected claims that her country’s spy agency was actively supporting the Taliban in their fight against NATO forces in Afghanistan. “We have no hidden agenda in Afghanistan,” Hina Rabbani Khar said in Kabul.

The BBC and The Times reported earlier in the day that insurgents captured by Western forces had told them that with Pakistani support, the Taliban were poised to return to power after 2014 when NATO’s mission is supposed to come to an end.

“Pakistan’s manipulation of the Taliban senior leadership continues unabatedly,” the BBC quoted a NATO report as saying.

This confirms the suspicion that was raised by America’s top military officer, Admiral Michael Mullen, last year when he said that the Haqqani network, a militant Islamist organization that is allied to but not necessarily affiliated with the Taliban, “has long enjoyed the support and protection of the Pakistani Government and is, in many ways, a strategic arm” of Pakistani intelligence.

The NATO study that was obtained by British news media also asserted that Taliban leaders meet regularly with Pakistani intelligence officers “who advise on strategy and relay any pertinent concerns of the government of Pakistan.” It alleged that Islamabad was “intimately involved” in an effort to topple President Hamid Karzai’s government in Kabul.

Pakistan’s civilian authorities may not be part of the plot but there is little question that its intelligence services and possibly its military maintain ties with Afghan insurgents in order to regain their influence in the country once NATO forces pull out.

Taliban sanctuaries are known to exist in the border region between Afghanistan and Pakistan. NATO commanders have long complained that they hamper the war effort and that there doesn’t appear to be the political will in Islamabad to crush the Islamist insurgency on their frontier.

The Pakistanis are reluctant to expand counterinsurgency operations because they have to prepare for the eventuality of a Taliban resurgence if not the formation of a “Pashtunistan” in the tribal area that manages to assert itself independently of Kabul.

Pakistan, moreover, regards the modern day mujahideen as a wedge against India, to be deployed whenever New Delhi seeks to strengthen its ties with the Afghans. India has indeed fostered relations with the Karzai regime to upset Pakistan’s quest for “strategic depth” in the country.

The rivalry that has defined South Asia for half a century won’t dissipate overnight, no matter America’s insistence that the Pakistanis have nothing to fear from India and little to gain from betraying the West.

The Pakistanis have problems of their own. Years of antiterrorist operations by a majority Punjabi army in predominantly Pashtun territory have pushed the Muslim nation onto the brink of civil war. The army’s offensives in the region displaced nearly half a million people. Before the Afghan war escalated, the battle was confined to the tribal areas but since 2008, it has spread into Pakistan proper with bombings and assassinations taking place in major cities including Islamabad, Karachi and Lahore.

Since the United States are preparing to withdraw, it makes no sense for the Pakistanis to crack down on extremists that might prove an asset in the future. The surest way for them to fill the power vacuum that will be left in Kabul once the Americans are gone is to cultivate ties with the Taliban and their allies. If they don’t, there may be a place for India in whatever power constellation emerges across Pakistan’s porous western border in the next couple of years.

Football riots in Port Said, Egypt, February 1 (AFP/Getty Images)

At least seventy people have died and hundreds injured in clashes between fans of rival football teams in the Egyptian city of Port Said on Wednesday. The toll is likely to rise as the violence continued late in the evening.

Fans swarmed the field throwing stones and bottles when the fighting escalated. Though field marshall and acting president Mohamed Hussein Tantawi sent security forces to quell the violence, they will have a tough time stopping a field covered with angry young men. The unrest could well spread to the street and last through the night.

The riots come two days after a rare bank robbery. A branch of HSBC in New Cairo was hit by unknown robbers who made off with one million Egyptian pounds. HSBC reaffirmed its commitment to security but can it do so in today’s Egypt?

Violence in Egypt seems to be on the rise. The once disarmed population is gradually growing accustomed to hearing gunshots. Some locals say it is the police, shooting off rounds every few nights to scare people although I can report that I have seen young men in an alley with a handgun. A variety of anecdotes and rumors float around. Uncertainty is in the air.

The Sinai Peninsula is said to be in chaos. Bedouin kidnapped twenty-five Chinese workers on Tuesday. They were released the next day, unharmed. The terrorist attack on Israel’s resort of Eliat in August originated in the Sinai.

It is still early to make pronouncements on Egypt’s future stability. Nevertheless, the perception among many Egyptians is that, since the beginning of the revolution, street violence has increased.

Chairman Ben Bernanke delivers opening remarks at a Federal Reserve System symposium (Reuters)

The Federal Reserve last week announced that it expected to keep interest rates near zero well into 2014 in an attempt to stabilize markets and help the American economy recover. It hasn’t so far but Chairman Ben Bernanke seems to believe that there just isn’t enough cheap money in circulation yet.

The central bank has kept short term rates below 0.25 percent for over three years and purchased some $2.3 trillion in long term securities during two rounds of “quantitative easing” since the financial panic began in December 2008.

When the Fed initiated its second round of quantitative easing, effectively printing $600 billion, Chairman Bernanke took to the pages of The Washington Post to explain how the “easier financial conditions” he created would stir economic growth.

Lower mortgage rates will make housing more affordable and allow more homeowners to refinance. Lower corporate bond rates will encourage investment. And higher stock prices will boost consumer wealth and help increase confidence, which can also spur spending. Increased spending will lead to higher incomes and profits that, in a virtuous circle, will further support economic expansion.

That was twelve months ago. Homeowners are still struggling. Investment has stalled, in part because of the regulatory uncertainty that the Obama Administration has created. Stock prices do move up every time the Fed injects more money into the market but the effects aren’t felt in the real economy because it’s a game of smoke and mirrors and everyone knows it.

You cannot create money out of thin air and expect it to solve a crisis that was made by too much cheap money in the first place.

In his defense, Bernanke admitted that the Federal Reserve cannot save the economy on its own. But it can make prolong the slump by trying to stave off the contraction that must happen if the massive misallocations of credit and investment that were built up in the years preceding the downturn are to be filtered out of the system.