Vince: from Dr Doom to Mr Hope

The Lib Dem deputy leader and shadow chancellor Vince Cable has penned an article for the Mail looking on the bright side of the current economic crisis. It’s worth reading in full if you want to cheer yourselves up on a gloomy Monday morning, but here are some extracts:

Today, with the collapse of the vast global pyramid-selling scheme created by international financiers, many people will be experiencing similar emotions. There are potentially millions of victims – those whose pensions depend on share values, those who bought houses on large mortgages at the peak of the housing boom, small businesses whose bank managers are refusing credit, thousands of people losing their jobs.

But in the middle of this frightening drama it is possible to see some positive developments that give us encouragement for the future. I earned the nickname of Dr Doom for predicting the collapse of the debt mountain and property bubble. I now see myself mutating into Mr Hope. …

Most people realise their money is safe in a High Street bank. Even if one of them collapsed, like Northern Rock or Bradford & Bingley, the Government would take over and protect all personal deposits. … And as recession starts to bite, inflated prices will start to fall. Recent anxiety about the rising cost of living should ease, to the relief particularly of pensioners on fixed incomes. The scare about scarce world oil supplies has, for the moment, receded. This is true also of food prices as people tighten their belts. And, as inflation falls, it will be easier for the Government to stimulate the economy and for the Bank of England to cut interest rates.

The cloud of falling house prices also has a silver lining. Of course, families facing the prospect of negative equity are anxious. … The good news is that the next generation of young people will be more able to get on the housing ladder when mortgage lending resumes. … the Government must get involved now in encouraging housing associations and councils to acquire land or empty property to keep up the supply of affordable housing.

The shock many people have experienced will also force them back to more sober and careful management of money. … I suspect that the national mood will be increasingly intolerant of self-indulgent, anti-social behaviour. There will be a strong reaction against binge-lending, binge-spending and binge-drinking. … I hope, and expect, that we shall now develop better priorities in Britain: sustainable wealth creation rather than churning finance. … there is now an understanding among governments that they will hang separately if they do not hang together and that is an important sign of hope.

PS: apologies, we missed this profile of Vince by Melissa Kite in the Telegraph yesterday:

Alan Duncan, the Tory shadow business secretary, has called Mr Cable “the holy grail of economic comment” while Lib Dem leader Nick Clegg, with a nod to his love of dancing, refers to the Twickenham MP as a “twinkle-toed economic prophet”. Little wonder then, that the former chief economist for Shell has been inundated with people asking him for financial advice in recent days.