Robert Shiller’s talk on behavioural finance at the LSE is worth a listen (you have to scroll down to find it). It’s rambly, but that seems ok; almost the right tone for a talk on the less rational aspects of economic behaviour.
Listening to it, it seems to me that you there’s a very plausible argument to say that the bank bailouts and stimulus package worked, not just because they freed up capital flows and pumped money into the economy but also because they reassured people that there was something that could be done. And would be done. And that reassurance changed behaviors from the types perpetuating the economic unravelling (cinema, smoke, I’m heading for the door!), to types that slowly started to counter it.
On this theory everything could still go belly up if people were to lose confidence in the ability of governments to act. If they were confronted with government failures to match the market ones we’ve just seen.
Meanwhile, being pessimistic, if the worst of the GFC is behind us, presumably we’ll be shortly returning to the other crisis it interrupted – commodity shortages. Not to mention the climate crisis on its way…