At the turn of this year, the esteemed novelist John Lanchester wrote a superb piece on the global obsession with booming markets, which he termed ‘Cityphilia‘. With some prescience, he explained that:
‘If our laws are not extended to control the new kinds of super-powerful, super-complex and potentially super-risky investment vehicles, they will one day cause a financial disaster of global-systemic proportions.’
Now Lanchester is back, with a well informed and beautifully written analysis of the current global meltdown in the latest edition of the London Review of Books. For an authoritative, accessible, and witty (in a gallows humour kind of a way) breakdown of exactly what is currently happening and why, this is hard to beat.
One man who certainly doesn’t need any analysis done for him is our newly resurgent Prime Minister. Confident, comfortable and convincing, for the first time in his premiership, the PM is clearly relishing (perhaps too much?) his role as the Winston Churchill of deleveraged markets.
Hailed by newly-crowned Nobel Economics laureate Paul Krugman for leading the global recovery, and invited to show a meeting of his fellow European leaders how it’s done, Mr Brown now finds himself in full-on James Bond mode.
Whether this bullish streak can last for the 18 months or so to the next election is doubtful. It seems unlikely (thankfully) that we will be in crisis mode throughout the next year and a half, and once that is over Mr Brown’s appeal as Britain’s Independent Financial Adviser-in-Chief may be less attractive to the electorate.
Also, if the experts are to be believed (questionable in itself), the economy will be in the troughs of a recession come the next polling day.
David Cameron’s criticism that the PM got us into this mess unconvincing in the present climate may resonate with an electorate crippled by rising unemployment and negative equity. If they can pull themselves together and come up with some sort of coherent analysis of the current context (they could start by reading John Lanchester), the next election is still the Tories’ to lose.
Although the financial situation may have saved Gordon Brown in the short term, the wider economic situation could still finish him off.