Wednesday, September 22, 2010

Cable is Wrong on Bankers

If I didn't know better, I'd have assumed that the rabble rousing speech by Vince Cable was a leadership bid in the making. He delivered it extremely well and very funny in parts it was too. And the LibDem crowd lapped it up - yellow friends of mine who were there said it was, finally, what they wanted to hear. So, good news - except for the fact that we need to stop this ridiculous banker bashing.

Even LibDem Susan Kramer says this must come to an end. And I say so for two reasons.

Firstly because Labour are using it as a fig leaf for their disastrous tenure. Forget Brown's government, they tell us, it's all down to the bankers. Yes, every problem of the last 13 years - would you believe it! Well, actually, no I don't. What about the role of the government in setting a framework and the role of regulators in enforcing it? What about Brown's reckless spending and borrowing and spending and then borrowing some more? By reinforcing the public image that its all the fault of the bankers we let Brown, Labour and the Milibands off the hook for their role in this.

And secondly because it isn't true. The vast majority of bankers did not cause this and are not "spivs". Somehow it has been acceptable to be publicly vile to a whole profession on the basis of a minority of them. All teachers are bad!! All police officers are bent!! All politicians are corrupt!! Obviously nonsense and yet we allow people to talk about bankers in the same way. Tax them!! String them up!! Castrate them!! Hardly fair or accurate, from a party that preaches fairness. Playing to the crowd? Who'd have believed it from a LibDem?

As somebody tweeted me this evening - after agreeing with this argument - let's focus our anger on the minority that deserve it. Sadly, Cable's speech was aimed at his party and his standing rather than serious debate. I'm surprised that Cable has allowed this to happen.

Update:
I notice that not only the "establishment" but also the Director of the Adam Smith Institute (whom Cable credited with his ideas) have rubbished it now.

Update2:
This post says it rather well too

2 comments:

Deckard said...

In some ways I do feel sorry for Vince Cable when he spoke about some of the difficulties with Capitalism and highlighting the world wide economic downturn being partly due to speculative banking.

I think the problem you have Antony is you assume he is 'attacking all bankers' when in actual fact he isn't.
You are creating a party political point instead of actually dealing with the question at hand. It's lazy analysis.

If I say anything about the problems of the market and market failure, or the inequalities of the market system I am branded a lefty or a communist. If I speak about returning to New Keynesian economics I am branded a socialist. If I want to nationalize a bank - you can guess what I was called.

Do you believe we should have nationalized Northern Rock or let it go to the wall? This is a question I would ask the current government as Vince Cable himself argued for nationalization.

I DO BELIEVE THAT MARKETS CAN FAIL. I am expecting gasps of air at this point in the shock of such an admission. I am not saying we should replace market capitalism but do believe that to a certain extent the State has a role to regulate it.

Some of the bankers DID CAUSE the problems of the world wide economic downturn and sub prime mortgages that stretched across the Atlantic. It is because it was a WORLD WIDE PROBLEM.

The UK government DID NOT cause the world wide economic downturn. Yes there are questions to be had as to whether we dealt with it sufficiently or transform our economy structurally to deal with such an eventuality. The problem was we became too reliant on the financial sector and could not rely on an industrial base like France and Germany.

Deckard said...

I do feel this mythical belief in the infallibility of markets needs to be challenged.

Furthermore this comes from someone who still believes that markets are the most efficiently generator of wealth. But also believe the State has a role to play in the economic sphere.