The IFS said the silver lining was that employment had held up and so there was no repeat of the policy errors of the 1980s when millions were allowed to "leave the labour force altogether and receive disability benefits or lone-parent benefits, or move into early retirement".
No such edifying gauntlet faced the government officials and politicians who brought down 70 telecom companies through a series of egregious policy errors of telecom reregulation and monetary deflation.
"While we maintain our view of no hard landing in China, the use of blunt administrative measures as a substitute for market-based mechanisms will increase the risk of policy error," she said in a report.
So, while there is the risk of policy error, it is the risk that central banks will leave their foot on the accelerator for too long and that the vulnerability of an over-leveraged private sector will be exposed by a Black Swan event.
If Ben Bernanke continues to reserve judgment on cutting rates, he may well be making one of the gravest policy errors of all time.
(Let's not forget that just a few days before the 1987 market crash, rookie Fed Chairman Alan Greenspan raised rates in what was one of the biggest policy errors of all time).
He called the United States policy of isolating him "another error" that Europe could not go along with.
The president of the World Bank, Robert B. Zoellick, said he told ministers this weekend how crucial it was to keep the world economy open and to avoid the protectionist policy errors of the 1930s.
Although many middle-income countries — in Asia and Latin America as well as Russia — said goodbye to the I.M.F. after its dramatic policy errors of the late 1990s — they all, including even China, have a collective interest in fixing fund policy.
For the remarkable thing about this ongoing slump isn't so much that we had a financial crisis as the fact that we responded to it, not by applying what macroeconomists thought they had learned, but by repeating all the policy errors of the 1930s.
