Economists, politicians and pundits looking for answers to the economic crisis fall into two broad categories. Keynesians and statists believe in flexible, “discretionary” economic policies; classical liberals believe in set rules.

Economic history proves the superiority of the second approach, but democracy often makes the first more attractive to politicians. In a crisis, people expect their leaders to do something; inaction and adherence to abstract principles plays poorly to public opinion. As previous recessions demonstrate, however, public pressure for action usually leads to bad decisions.