One of the more horrifying aspects of recent events was the realisation that the balance sheets of some major financial institutions were wholly misleading. As Chris Patten puts it in his recent book, What Next?, one week, a single mother in St Louis takes out a mortgage. The next week, the mortgage is a triple-a rated security in London. The week after that, it is a supposedly reliable asset in a German municipality's pension fund.
This is not only a moral and intellectual problem. It is also a financial one. The international banking system will remain unstable until the so-called toxic assets are properly evaluated. As that is a much less glamorous task than the grand-standing which went on last week, it has not received nearly enough attention, though there has been useful work in London, both in the Treasury and at Credit Suisse.
But even if the G20 Heads of Government could not have been expected to bring about the transvaluation of all toxic values, they could at least have set the banks a good example: honest accounting. Under Gordon Brown's malign tutelage, they did the opposite. The fanfare figures in the final communique were as reliable as a Bernie Madoff prospectus. Almost all the billions and trillions turned out to be a re-announcement of sums already committed. That was probably just as well. Otherwise, the consequences for public debt and inflation could have been hideous. Even so, and especially in the context of calls for tighter financial regulation, it was hypocritical.
One international institution did obtain additional funds: the IMF, and this may prove significant. Over the past few days, both in public and even more explicitly in private, British ministers have been softening up opinion in case the government has to have recourse to the IMF. No disgrace in that, we are told; it would be the same as a socialite with a cash-flow problem buying a dress at a charity shop: a mere trifling temporary expedient.
We should never underrate this government's capacity for sheer effrontery. In return, it should not underrate the public's residual common sense. All the talk of billions and trillions may wash over most voters, but they are looking for a touchstone: some secure foundation from which to make their moral judgments. The IMF would provide one. Mr Brown has shown unexpected powers of bouncing back, but there are limits. If he had to resort to the IMF, any remaining credibility would be shattered. Not even Lord Mandelson's silvered serpentine tongue could talk him out of that one.
Yet a begging visit to the IMF would not necessarily prevent a partial recovery, starting with the stock market. It might seem absurdly temerous to predict that the market has now stabilised. There is a wise old stockbrokers' adage: "Never try to catch a falling knife." Even so, one or two shrewd City chaps of my acquaintance are inclined to think that the knife has reached the tiles and are investing money on that basis.
For the past 18 months or so, there has been a lot of talk about "vulture funds": cash-rich investors ready to buy distressed assets at fire-sale prices. Up to now, the vultures have sat on their perches, waiting for the carrion to ripen, but one is beginning to hear the odd wing flapping. There are technical obstacles in the way of a sustained rally. A lot of people are still strapped for cash and it is much easier to sell shares than most other assets, especially houses. So a recovery could be disrupted by profit-taking, or rather loss-minimising. Yet it would not take much to move the FTSE back towards 5,000.
Desperate to claim that his strategy is working, Gordon Brown will want to highlight any improvements. But the housing market and the jobs market will be harder. It would be amusing to hear a Labour Prime Minister boasting about a stock-market revival while the jobless figures were rising. Unemployment has always been a lagging indicator, and matters have been made worse by the Government's enthusiasm for EU regulations plus other means of increasing employers' costs.
This is one of the most bewildering phenomena in contemporary politics. Everyone knows that globalisation will lead to increased competition and therefore to pressure on domestic labour markets. Everyone knows that youth unemployment creates lasting social problems. But most EU governments impose measures which encourage employers to buy machines rather than hire workers. It is not only the UK which is criminally deficient in joined-up government.
The Tories also have a problem, with joined-up opposition. David Cameron could never be accused of panicking. There were those who urged him to find a way of offering a counter-attraction during the G20 in order to interfere with Mr Brown's dominance of the airwaves. Rightly, Mr Cameron saw no point. There are moments when a Prime Minister cannot be prevented from making the news and this was one of them.
David Cameron did at least have his half-hour with Barack Obama and that was by no means an automatic courtesy for a US President to extend to an opposition leader. But Mr Cameron decided that he would wait for the captains and the kings to depart before striking his recessional note. In so doing, he will have a number of narrow and tricky rhetorical paths to negotiate. The Tories must find a way of discussing the present difficulties without appearing to revel in them: of being sombre without being thrown by unexpected signs of recovery. They ought to be bold enough to encourage a degree of medium-term optimism, without sounding glib. Above all, they must capture the voters' confidence.
This requires three things: analysis, phrases and repetition. The Tories ought to provide both an historical account of the degringolade and a sketch of the escape route. In this, while eschewing facile partisanship, they should not be afraid of close reasoning and complex arguments. The aim should to use seriousness to impress the serious-minded.
Needless to say, that is not enough. It never is, in politics. The Tories must also come up with some catchy phrases: their equivalent of "boom and bust". William Hague has made a start. "Gordon Brown promised to abolish boom and bust. He has kept half his promise." Having invented the phrases, it is vital to go on repeating them. Often, it is only when the politicians are sick of repeating themselves that the voters at last begin to notice.
Apart from the state of the economy, the Tories have one advantage. Mr Brown has already proclaimed his strategy for the next election. He will declare that he is the only man who can save Britain; that the Tories are only offering tax cuts for the rich and spending cuts for the poor. As this is wholly dishonest, it should be equally ineffective, but Gordon Brown will not go down without a fight. If the Tories lost that fight, they would have only themselves to blame.