“Our unprecedented, decisive and concerted policy action has helped to arrest the decline and boost global demand.” Thus did the finance ministers and central bank governors of the Group of 20 leading high-income and emerging economies pat themselves on the back over the weekend. They were right. The response to the crisis was both essential and successful. But it is still too early to declare victory.

Ben Bernanke, recently nominated by Barack Obama to a second term as chairman of the Federal Reserve, made the point at this year's Jackson Hole monetary symposium: “Without these speedy and forceful actions, last October's panic would likely have continued to intensify, more major financial firms would have failed and the entire global financial system would have been at serious risk . . . [W]hat we know about the effects of financial crises suggests that the resulting global downturn could have been extraordinarily deep and protracted.”

Two groups of thinkers reject this viewpoint. One argues that the economy is always in equilibrium. If unemployment has exploded upwards it can only be because, after Lehman imploded, workers chose to take a holiday. An alternative view is that depressions are the natural consequence of excess. Both the guilty and the innocent must suffer, as past errors are purged.