It's been six months since I first mused about the historical precedents for our current financial crisis. A lot has changed since then, but my conviction in the Nordic model has only grown stronger in the meantime. Here, tell me whether this sounds familiar:

"Risky lending practices, poor reporting transparency, and a booming real estate market led to a major meltdown in a large, established banking system. A weak regulatory framework was in dire need of an overhaul, and the government had no choice but to step in and take direct action in the banking sector."

That paragraph is about Sweden in 1991, but I'd forgive you for thinking "Washington, D.C. last week."

Hark, the historical precedents
This time, there's a Greek chorus of respectable voices behind me, too. Bloomberg, The New York Times, and The Wall Street Journal all ran similar opinion pieces last week, pointing out the similarities between "the here and now" and "Scandinavia in the early 1990s."

In short, the credit crisis described above was stopped in its tracks by unblinkingly severe action among the Swedish, Norwegian, and Finnish central banks. Some of the largest Scandinavian banks were taken over by the local governments, while others were simply allowed to fail, but with government guarantees for their debt payments. All of the central banks raised interest rates to shockingly high levels. When the central lending rate sits at 500% -- however briefly -- you might as well just shut down bank lending altogether.

It was tough. It was expensive. Unemployment rates soon exploded, and the stock markets in Oslo, Helsinki, and Stockholm suffered dearly. But five years later, these banking systems were back on their feet and started lending out money again. Finnish phone giant Nokia (NYSE:NOK) was a 20-bagger in five years, starting in 1995, while rivals such as Motorola (NYSE:MOT) merely doubled. The Swedish precursor to today's pharmaceutical titan AstraZeneca (NYSE:AZN) tripled in three years, keeping up with American contemporaries such as Merck (NYSE:MRK). The crisis was over.

Japan faced a similar situation at the same time, but it went the other way with laissez-faire banking regulation and 0% central bank rates for years. The Japanese economy is still suffering today, nearly two decades later. Sure, Toyota (NYSE:TM) has doubled its share price -- but that's a lousy 13-year return. This is where you have to ask yourself which is better: a swift kick in the backside and a speedy recovery, or getting bedsores while waiting for some miracle cure that never comes.

Where are we going?
When Washington Mutual failed and was handed over to JPMorgan Chase (NYSE:JPM) for a song, I thought we were on the right track. The bitter Swedish pill of ages past was being handed out to American businesses, except that massive and healthy banks like JPMorgan and Bank of America (NYSE:BAC) were there to lend a helping hand -- for a long-term profit.

That hope is still there, and the game is far from over, but Congress needs to come up with a workable plan of action. Is the $700 billion not-a-bailout plan the right medicine for us today? Fools remain split on that issue. Morgan Housel likes it, but Chuck Saletta and Alyce Lomax are skeptics and David Lee Smith wants more information. Me, I think we should have taken some proactive action months ago, before the financial markets imploded on their own. A swift and decisive response right now is better than a tepid, belated attack.

But I'm a realist and would settle for "swift and tepid action" in a pinch. Please, let's not become Japan 2.0.

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Fool contributor Anders Bylund holds no position in any of the companies discussed here. You can check out Anders' holdings or a concise bio if you like, and The Motley Fool is investors writing for investors.