Cable admits economy is screwed. Where’s his vision?
Vince Cable has finally admitted the extent to which the UK economy is screwed. In an interview with the Guardian, he outlines the fact that we depended far too much on financial services, the scale of global inflation, and the rapidly increasing role of China in setting prices and outcompeting us.
Politicians have failed, he says, to prepare us for the rocky ride ahead.
Well, I can go half way there with him. Our economy is in serious trouble, and all of the reasons he outlines are contributing factors. But, here’s my question: What’s his plan. Other than running around the country shouting ‘WE’RE ALL DOOMED’ what does he mean to do about this? He is, after all, Business Secretary.
As I’ve written before, the government’s economic plan seems to have 3 strands – export led growth, privitisation and de-regulation, and re-inflating the financial bubble.
Essentially, Cable today seems to be saying that these won’t work. I agree. They won’t. To whom, precicely, are we supposed to export? As Vince Cable outlines, this strategy is clearly going to fail as the seas of the global economy fail to calm. Privitisation doesn’t deliver real wealth, only the pyhrric joy of a stock market high. There is little evidence that de-regulaiton helps at all – we had much faster growth rates both in the UK and around the world in the era when things were much more regulated. Re-inflating the financial bubble will end with another pop.
I’m glad that the Business Secretary has realised this. I’m glad he can see far enough to realise that the course on which his government has set us is disastrous. But being able to see a long way is not the same as having vision. And it is this vision that Cable lacks.
Becuase decline in quality of life is not intrinsic to our situation. We are one of the richest countries on earth. We have remaining a fantastic education system, and the resources with which people can build a better economy. But that will require a government willing to invest. That will need a government willing to take risks.
What Cable expressed today is the sentiment of the whole of Europe’s failed liberal centrists – politicians left floundering in the wake of an economic storm they didn’t understand and in which they have failed to get a grip.
Because the truth is that Cable is right. As Peter McColl has put it, the credit crunch removed the velvet glove from the iron fist of neo-liberal capitalism that has been asset stripping and gutting our economy for the last 30 years. The strategy of the centrist liberals – try to collect the wealth of neo-liberalism and redistribute it through the welfare state – this strategy has failed. Cutting back public sercies is simply an attempt to dig our way out of this hole.
And so now is a time for new ideas. Now is a time for people to take the rocks left lying around after the explosion of the credit crunch, and to build something new, something better. We need an economy in which wealth doesn’t fly from continent to continent, chasing the ‘winner’ of the race to the bottom. And that means it must be rooted in communities, not controlled by a Lear Jet elite. We need an economy based on new ideas and creativity. And that means mass investment in education, arts and science. And we need an economy based on people doing for each other those things that we value. That means we need to re-look at how we measure value in our national economy.
Cable complains of the volatility of oil markets. Where is his mass investment in renewables? He complains of over-financialisation. Where is his industrial plan? He complains about inflation. Where is his global treaty to control speculation?
We are 3 years now from the credit crunch. The time for moaning has passed. Now is the time to build something new. The crisis in finance has been mirrored by a crisis in imagination. Now is the time to imagine tomorrow.