Huge political price of US bailout package

"You can always rely on the US to do the right thing," quipped Winston Churchill, "once it has exhausted the alternatives." That is indeed why last Friday's market euphoria at the US Treasury's financial rescue plan was justified: launching a rescue was the right thing to do, and the good thing about the United States is that it has done it quickly, about 13 months after the credit crunch began - rather than taking seven or eight years, as Japan did after its own crunch in the 1990s.

Perhaps it takes a free market, wild-west capitalist system to know when the sheriff should be called in. Anyone wishing to see this market turmoil as somehow the denouement of deregulated "finance capitalism", the end of Thatcher-Reaganism, and proof that regulated systems work better, needs to take account of Japan, the world's second largest economy and home of the other great 1930s-style financial crash of recent decades.

Japan's banking system collapsed in the 1990s, and its once-brilliant bureaucrat-regulators failed to act quickly to clean up the mess. So far, the US - helped, no doubt, by the chance to learn from Japan's example - is doing better.