We live in a world of broken models. To understand why world leaders can't easily fix the global economy, you have to realize that the economic models on which the United States, Europe and China relied are collapsing. The models differ, but the breakdowns are occurring simultaneously and feed on each other. The result is that the global recovery flags, while pessimism and uncertainty mount.
Take the U.S. The American economic model was consumer-led growth. From the early 1980s until the mid-2000s, what propelled the economy was rising wealth — stocks, bonds, real estate — that encouraged households to spend and borrow more.
Feeling richer, people traded up for better cars, homes and vacations. Everyone could afford or aspire to "luxury." Businesses responded by investing in more malls, restaurants, hotels, factories and startups.