Read this with your morning coffee
Yves says you'll need to be caffeinated, and she's right.
UPDATE On overnight consideration, you really should try take the time to read it.
The post connects a lot of dots, and in particular, it explains this chart, which Krugman does not**, and explains why, after the government dumped all our money into an enormous hole*, the banks still aren't lending.
NOTE * "The American people earned that money! They have a right to decide how that money should be destroyed!"
UPDATE ** I'm wrong. Krugman says it's the same liquidity trap the Japanese are in. But if our central bankers and financial decision makers are operating on the wrong theory of money entirely, then that's not so. Still learning!