ATLANTIC BOOKS, 2009
Reviewed by Rachel Reeves
It is good to see, in this age when politicians are so spurned, that at least one is held up as a sage. Vince Cable is one of very few people to come through the credit crunch with their reputation enhanced. Cable has achieved this through some foresight (he began to ring warning bells in 2003 about an impending debt crisis), and robust analysis (he was an economist at Shell before becoming a politician), combined with reasoned and reasonable policy prescriptions that he puts forward in a polished but accessible manner.
Cable's The Storm starts where it started in the minds of most people in the UK, at Northern Rock and the now infamous queues outside branches up and down the country in the first bank run since 1866. Although not the root cause of the problem, it was the most visible manifestation of the credit crunch which has plunged the global economy into the worst recession since the Second World War.
Cable goes on to explain the crisis in a way which is simple, persuasive and compelling. Global economic imbalances, stemming from high savings rates in China and a spending addiction in the West, combined with low interest rates and excessive risk-taking in the financial sector with insufficient regulatory oversight, created the conditions for the storm that has led to homes being repossessed, millions languishing without jobs and businesses going bust.
Many other reviews have focussed on Cable's insights and chronology of the credit crunch and recession and I will not dwell further on his analysis. My focus instead will be twofold. Could Cable ever be Chancellor? And if so, how would his tenure differ from either a Labour or Conservative Chancellorship?
Although current opinion polls give the Tories an outright majority at the next election, the result is by no means a foregone conclusion--the public have yet to fall in love with Cameron, let alone his Party. While the Liberal Democrats are being squeezed between the two main parties, especially as the Tories have shifted (at least cosmetically) to the centre ground, they could, nevertheless, be the power brokers the day after the general election.
In such a circumstance the Liberal Democrats would surely want assurances on a referendum on electoral reform, other constitutional changes and one of the key offices of state--Foreign Secretary, Home Secretary or Chancellor. Would the Tories or Labour offer such a deal and would Nick Clegg accept...