In 1930, in the wake of the Wall Street Crash, the US Congress passed the Smoot-Hawley Tariff Act, significantly exacerbating the Great Depression with a trade barrier. This week, Congress rejected the “Troubled Assets Relief Program” – a plan to create a $700bn “bad bank” that would buy up unwanted and unpriceable mortgage-backed securities. Tarp cannot save the US economy on its own but it could be part of an effective answer. Legislators must act quickly to deal with the crisis.

This impasse was the result of a tragic failure of leadership. Presenting a complicated and expensive policy likely to be unpopular with voters weeks before an election season and in need of opposition support requires a nerve and finesse missing in the administration. President George W. Bush is, politically, the ultimate toxic asset. Unpopular even within his own party, he left Hank Paulson, the Treasury secretary, to take the lead. Mr Paulson is an impressive man but has shown little verve for politics. Congress does not respond well to laws presented by the executive as diktats.