Vincent Cable MP for Twickenham and Deputy Leader of the Liberal Democrats gave this year's CEP Lecture entitled The Economic Crisis on 25th March 2010.

The New York Time columnist Roger Cohen has written a piece that covers some of the points Dr Cable made during the annual lecture (See below). An audio file of the lecture can be accessed here.

-----

The Rumpled Sage

Roger Cohen, New York Times

LONDON — An unlikely character, bald and blunt, a “good bloke” in native parlance, has emerged as a pivotal figure in Britain’s May election, at once the country’s most popular politician and a possible chancellor of the Exchequer in the plausible event of a hung Parliament.

A disheveled 66, wisps of surviving hair lifting off from his pate, Vince Cable looks more like a provincial bank manager than a political celebrity. But this is the gloried “sage of Twickenham” (his West London constituency).

The sage is so called for his economic foresight (remaining sober enough to perceive risk when everyone was tipsy on easy credit). He has thereby done much to hoist his Liberal Democrats from their usual third-party peripheral role.

Glamorous he’s not, but Cable can turn a phrase. Back in 2007, he demolished Labour Prime Minister Gordon Brown by noting his “transformation in the last few weeks from Stalin to Mr. Bean, creating chaos out of order rather than order out of chaos.”

U.K. elections have been a bore for more than a decade, too predictable to raise the heartbeat. But this one, expected May 6, is a cliffhanger.

The opposition Conservative party, through David Cameron’s touchy-feely makeover, has roused itself but its élan has faltered. Labour’s 13 years in power look like enough, but Brown, who lived most of those years in Tony Blair’s shadow and knows he can only emerge by actually winning an election, is still hungry. As for the Liberal Democrats, they’ve been boosted because they got the core issue right.

It was back in November 2003 that Cable asked Brown, then chancellor: “Is not the brutal truth that ... the growth of the British economy is sustained by consumer spending pinned against record levels of personal debt, which is secured, if at all, against house prices that the Banks of England describes as well above equilibrium level?”

Brown brushed Cable aside. Bubble tunes were still playing.

Now fast-forward five years to the great meltdown (U.K. version): banks collapsing, families asphyxiated by negative equity, Icelandic weirdness, the government to the rescue late in the day. And here we are, with the economy dominating the election — everyone realizes somebody’s got to pay the huge tab for that bailout someday — and a lionized Cable.

I asked him why he had a hold on what the spin and sound-bite saturated 21st-century voter (like my sister Jenny Walden whose worship of Cable first pointed me in his direction) craves: honesty and authenticity.

“I’m not a professional politician,” he told me with his Yorkshire purr. “I was 54 by the time I became an M.P. I’d lived a life, had less to lose. So I thought I’d say the things that need to be said.”

Among them were that the credit bonanza would “surely come to a sticky end,” especially with “regulators reinforcing the cycle rather than leaning against it.”

Aye, lad.

Cable went to Nunthorpe grammar school (hardly Cameron’s exclusive Eton) and, after Cambridge, was a city councilor in Glasgow. He told me, “I was a very idealistic left-winger when I started, representing a tough working-class ward.” (The problem, he says, with Cameron and several of his entourage is “not the fact they went to Eton, it’s the fact they haven’t done anything really.”

Life took him here and there — from Labour to the Liberal Democrats, from economic left to center, from the Foreign Office to chief economist at Shell — before he won Twickenham in 1997. Today, he sees a Britain that is “baffled, puzzled,” worried about its economic future.

Tired of Labour, the country is now less focused on Brown and more on what the “conventional see-saw alternative is, the Tories,” Cable said. Because the deft Cameron’s real intent is uncertain, Cable suggested, the once double-digit Tory lead has narrowed.

I think Cable’s analysis is about right. I also think this election is about anger over privilege — the M.P. expense account scandal, the City’s excesses, all the “non-doms” (British residents who claim residence abroad for tax purposes — including Conservative Party deputy chairman Lord Ashcroft) — and that Cameron’s biggest task will be convincing enough people he’s of the people.

Cable has no issues on that score; people trust him even when he prescribes pain. With the deficit at about 13 percent of gross national product, he’s seen as credible on fiscal responsibility, the key to reassuring bond and currency markets. He’s been more explicit about possible cuts — to defense, some regional development agencies and public sector pensions — than his Labour and Conservative counterparts (and Chancellor of the Exchequer Alistair Darling’s pre-election budget left those cuts for another day). He’s also called for a mansion tax to relieve the 3.6 million people earning less than $15,000 a year from taxes, and he lambasted banks that, as he put it, have been “semi-nationalized” and “should now act in the public interest.”

Cable’s got something going on. Whether it’s enough to lift the Liberal Democrats from their 63 seats is unclear. But a hung Parliament, in which neither Labour nor the Tories can form a government, is more likely than in any recent election. That could put Cable in a position of power, about as good an outcome as I can imagine.