We can be optimistic about the effective handling of this crisis based on several factors. The Great Crash of 1929 has taught everyone lessons in what to do and, more importantly, in what not to do. Monetary policy is being loosened, not tightened: we can thank Milton Friedman’s influential analyses for that. Fiscal policy will be expansionary, not deflationary: we all live in the age of John Maynard Keynes, whose fiscal prescriptions were unavailable in 1929 and grew out of the mistaken doctrines and policies of that time. The Smoot-Hawley tariff of 1930, which led to “competitive” increases in protectionism by all, accentuated the Crash. No one is willing to repeat that error.

—Jagdish Bhagwat: FT

Bhagwati goes on to say, “Besides, the ideology of the US is a lack of ideology.” Tell that to the RSC and Representative Shelby. Nonetheless, could this abrogation of principles presage a healthier discourse with ideology?

And to the title of the piece: But with financial innovation, the downside can be lethal – it is “destructive creation”. We have to work hard at defining the downside scenarios.