So much for the recovery. In none of the Group of Seven economies, including Germany, has industrial output returned to pre-crash levels.

In the United States, for example, industrial output stands at 94.2 percent of its level in the first quarter of 2008.

In the last three years since September, 2008, the most reliable market index to the U.S. economy has produced nil returns. Even including dividends, the Standard and Poor's 500 is exactly where it was in the month that the crisis exploded with the Lehman Brothers collapse.

Despite vast injections of deficit spending and stimulus packages by the G7 governments and by the unprecedented creation of liquidity by central banks, the developed economies are back to where they started when the crash began. And one crucial element of the global economy -- the stability of the eurozone -- is in worse shape than it was three years ago.

Worse still, several of the key strategies put in place three years ago to address the crisis have visibly failed.

The first is the failure of the attempt to stabilize and recapitalize those top commercial banks deemed too big to fail. The savaging of bank stocks in Europe and the United States over the past three weeks and the drying up of inter-bank lending across the Atlantic points to the continued vulnerability of the banking system.

The plan was to allow the commercial banks to borrow cheaply from central banks, to lend that money at much higher interest rates and to use the resulting profits to buttress their capital base. But there was too little private sector demand to borrow the money. Capital reserves have been increased but far from sufficiently for comfort.

The second failed strategy has been the attempt to stabilize the U.S. housing market, where prices continue to flag and foreclosures to rise. Despite record low mortgage rates, demand isn't picking up, even for re-financing. According to Mike Fratantoni, the Mortgage Brokers Association's vice president of research and economics, refinance application volume is more than 35 percent less than levels at this time last year. The old assumption that falling prices would themselves stimulate demand isn't working.

The third failed strategy has been the attempt to create jobs, everywhere in the G7 countries except in Germany, where an export boom (already starting to fade) has created demand for traditional industrial jobs. There are three important factors at work here, beyond the flawed and over-politicized design of most government stimulus packages.

The first is that consumer demand is down by about $500 billion a year in the United States. The second is that corporations have learned to do more with less, to produce goods with fewer employees and thus to cut costs and boost earnings. The third is more worrying: that current and future employment is being depressed not by the economic cycle but by fundamental structural and technological change in the economy.

The success of Amazon in selling books and e-books means the bankruptcy of bookstore chains like Borders, whose final 11,000 employees are being laid off. The U.S. Postal Service, the need for its services eroded by e-mail, is planning to cut 220,000 jobs over the next five years, half of them through layoffs.

Whereas automation began by eroding the need for a large blue-collar workforce, we are starting to see the way computerization is eroding the demand for a white-collar workforce, whether in newspapers, paralegal services or accounting. The education industry is likely to follow, as cheap distant learning starts to erode the demand for traditional college education.

The next victim will be healthcare services, hitherto one of the fastest-growing employment areas. The coming of constant and automated diagnosis through smart phones, followed by the eventual success of electronic health records, is going to reduce the need for human staff.

Then will come the reduced need for cashiers and retail staff (6 percent of U.S employment) as we move to electronic payment by phones. Vodaphone is building hardware on the assumption that by 2020 half of all retail transactions will be conducted by smartphones.

The core of the problem is that governments have been trying to tackle this economic crisis by using the tools of the 1930s, as if it were another version of the Great Depression that could be resolved through traditional Keynesian methods. But it is starting to become clear that many of the roots of this crisis stem from the reality that we are already entering a completely different technological era in which the traditional tools of job creation and demand stimulus no longer work in the same old ways.

Where this takes us as an economy dependent on mass employment to pay for consumption, taxes and pensions that still unclear. And what it does to us as a society in which most people measure much of their self-worth by their jobs and their incomes and their ability to take care of their families is more uncertain still. But the essence of this crisis is becoming clear; it is less an event than a transition. We won't be getting back to "normal," not ever.

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