Book Review
2 Jun 09
The Storm by Vince Cable (Atlantic Books, £14.99)
This book is subtitled “The world economic crisis and what it means”, but it could have been called “I told you so, but would you listen?”
As the chief economics spokesman for the Liberal Democrats, Vince Cable MP sounded like the voice of doom while the housing and debt bubble was fast expanding and the current administration claimed to have abolished “boom and bust”.
Now, Cable is one of the few politicians to have retained his credibility in the economic crisis (and he doesn’t have a second home, either). In The Storm, he sets out the causes and nature of the crisis in terms that make sense to an intelligent lay reader, and looks at how the problems can be fixed.
He addresses the misconception that sub-prime mortgages in the US were the cause of the financial crisis – in fact, as he points out, they were just the visible tip of an iceberg of unsustainable debt and inflated asset prices – and places the crisis in the context of a world made ever smaller by globalisation.
Cable’s solutions are pragmatic, not dogmatic. He warns against falling back on nationalism and ideology, and also against the “defeatist” idea that better regulation will never address the dysfunctional nature of markets.
To his credit, Cable does not offer any “magic bullet” solutions but he does set out how governments and regulators could set about turning the economy around and, also, how they could try to ensure that we are better prepared for the next global boom and bust.