The summit of the Group of 20 leading advanced and emerging countries in London on April 2 2009 will fail. Its members are refusing to meet what Lawrence Summers, senior economic adviser to the US president Barack Obama, calls “the universal demand agenda”. Conventional wisdom is the enemy. Alas, it is winning.

In the US, the spirit of Andrew Mellon, Treasury secretary to Herbert Hoover, remains alive. His advice – lamented Hoover – was: “l(fā)iquidate labour, liquidate stocks, liquidate the farmers, liquidate real estate”. Yet this foolish view is not animating US policy. The danger is not of doing nothing, but rather of doing too little. If such timidity fails, opponents will argue: these policies have failed. This will exacerbate confusion, making attempts at decisive action later on more difficult and ineffective.

The right thing to do is more than enough. It will always be possible to withdraw stimulus a year or two hence. It will be far more difficult to make action effective if depression, both economic and social, takes hold.