It began as a sub-prime surprise, then became a credit crunch and is now a global financial crisis. At last week's World Economic Forum at Davos there was much retrospective finger-pointing--Russia and China blamed America, everyone blamed the bankers, the bankers blamed everyone--but little in the way of forward-looking ideas. From where I was sitting, the majority of attendees were still stuck in the Great Repression: deeply anxious, but fundamentally in denial about the nature and magnitude of the problem.

There were the people calling the bottom of the recession by the middle of this year. There were the people claiming India and China would be the engines of recovery. There were the people more worried about inflation than...  full article