Rescue?

As G7 finance ministers gather in DC this weekend in connection with the annual IMF and World Bank meetings, one can't help but notice the increasingly strident pleas for concerted and coordinated action coming from economists I greatly respect. Their stridency makes me worried.

One hopes that finance ministers will take concrete steps this weekend. One hopes that someone will emerge as a leader. One hopes, at the very least, that they are not unable to do something. The disaster of this week suggests quite clearly, I think, how markets react when governments prove themselves incapable of coordinated action. One also worries, however, as Sarah and Alex express below, that governments really don't know what they are doing, and lack the conviction to act forcefully anyway.