'Complacency and Incrementalism are Traps to Avoid'

Lawrence Summers most recent column ends with:

Complacency and incrementalism are traps to avoid: ... In all spheres, the temptation to incremental policymaking is enormous. Incrementalism is less politically jarring; it preserves flexibility for the future in an uncertain world; it usually requires less admission of past error; and it gives the appearance of prudence. Yet the American experience in Vietnam should be cautionary to those inclined to yield to the temptation of incrementalism. At every step, policymakers did enough to avoid disaster but not enough to offer a prospect of success — until the moment when helicopters left the Saigon embassy and US policy ended in failure. ...

Incremental steps that provide some but not large sums of assistance, that postpone but do not reduce scheduled debt payments, and that defer decisions about the future to the future run the constant risk that they will not bring convincing arithmetic into view and will be insufficient to restore market confidence.

There are dozens of examples in financial history when an exchange-rate peg was maintained too long, or debt was restructured too late, or forbearance was carried out for too long. I can think of none where strong action came too soon. Clear-eyed, bold action is what the world requires if the financial drama is to subside. Let us hope against much of the experience of recent years that it will be forthcoming.