A time for pragmatism, not principles

It is encouraging to remind ourselves of what the economist John Maynard Keynes thought went wrong in the last great economic slump in the 1930s; encouraging because so far neither the authorities nor the public in Washington and London seem to be repeating the same mistakes this time. There is still time, of course.

"These were," Keynes wrote, "two disastrous pessimisms", the first being the revolutionary one "that assumed that everything was so bad that nothing can save us but violent change" [either by fascism or communism] and the second pessimism, the reactionary one, being the conviction that "the balance of social and economic life was so precarious that we must risk no experiments".

This time, however, thanks to the end of ideology, pragmatic experimentation seems to be the order of the day. None of the old ideologies, ­ capitalist-monetarist as much as fascist or communist, ­ have been allowed to prevent pragmatic

solutions which would once have been thought unthinkable.

Whether a second attempt at a defiantly heretical rescue programme will succeed is too early to say, but it is not too early to say that such a willingness in Washington to think outside the rules augurs well.

Worryingly, however, there is still one of the old certainties or orthodoxies threatening to rear its ugly head: the ancient assumption that wrong-doing must never be allowed to go unpunished.

Of course the greedy ­ - and who amongst us was not? - ought to be punished. But the temptation to allow such punitively puritanical principles, admirable as they might be in better times, to make the politicians take their eyes off the economic ball, should be at all costs resisted.

Disastrously, it hasn't been resisted by Congressional Republicans who want the bankers' blood.