Mea culpa. That might be the biggest message from the recent gathering of global financial leaders in Tokyo. The annual IMF/World Bank meeting is an opportunity for finance ministers and central bankers to seek agreement on the state of the global economy and ways to ensure greater or more stable growth. Last week's conclave will be remembered for the admission by those technocrats that austerity, their standard prescription for national economic woes, missed the mark. While we are pleased to see some humility from these officials, it is curious that this reassessment only follows the imposition of that remedy on European economies.

The Tokyo meeting began with recognition by the IMF that world economic growth is slowing. Six months ago, global growth in 2012 was anticipated to be 3.5 percent — the slowest rate in three years — but would increase to 4.1 percent in 2013. Now, the IMF puts growth at 3.3 percent this year, with a half percentage point drop in expected growth to 3.6 percent in 2013. Most large developed economies would either shrink this year or expand sluggishly at about 2 percent or less; only Japan and the United States will surpass 2 percent, and they are expected to eke out just 2.2 percent expansion. (Next year, Japanese growth is expected to plunge to 1.2 percent, while the U.S. will fall to 2.1 percent.) Developing economies will do better, but they too are slowing.

The biggest clouds over the global economy are the uncertainties produced by the euro crisis and the prospect of a U.S. plunge over the "fiscal cliff" if policy makers do not reach a deal on the budget. The failure of politicians in Washington and throughout Europe to agree on actions and then deliver on them has cast a pall over the global economy. While economies elsewhere have their own problems, the collapse in demand from Europe and the ripple effects of prevarication by U.S. politicians and the Federal Reserve Bank's quantitative easing have added to local woes. The elections in the U.S. (in November) and Germany (next year) magnify the uncertainty. Political machinations in Tokyo have delayed resolution of this country's budget funding problems; a bill is needed by the end of next month to restore predictability to financial planning for fiscal 2012 in Japan.