Vince Cable: You Ask The Questions

The Liberal Democrat Treasury Spokesman answers your questions, such as 'Which economists are you re-reading?' 'And when will you join the Tory party?'
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The Independent Online

You never seem to fully endorse Nick Clegg when invited. Is that because you're reluctant to be his underling, and secretly disgusted that a man two decades your junior is your boss? What do you make of him anyway?



Nick is an excellent leader. I am very happy in my role as his deputy and speaking for the party on economic matters. We work very well as a team. I have had a stint as acting leader. Been there, done that. I have my failings, but they don't include vanity and an obsession with status.

Which other politicians do you know for a fact read your book, The Storm?



Plenty have asked for copies and 50,000 have been bought so far, though not all by politicians

Is your basic view of George Osborne that he's a nice guy who doesn't know very much about economics? Do you think someone with his limited experience and a degree in History has the knowledge to lead us out of recession?



Not sure about the "nice guy" bit.

I'm sick of all the sycophantic coverage you get in the press from pesky liberal twits. If a Tory had made your so-called insights they wouldn't get nearly as much coverage. Are you as bored as I am?



Most reasonably impartial observers realise that the Tories get vastly more coverage than my colleagues do for less effort and less insight. I have had a good write-up from people on the left and right, who may be "pesky" but certainly aren't "twits".

You look, sound, and by all accounts smell like a Tory. Why don't you just cross the floor and get into bed with your comrades? It might mean you actually have a sniff at power.



I am just as often accused of looking and sounding like Labour, so I guess I have the balance about right. Smell is a new one.

You said that the asset protection scheme (APS) was "woefully misconceived". What do you intend to replace it with?



I think I described the APS as a "fraud against the taxpayer". The risk of insuring toxic assets is unevenly divided. The banks take the first 10% loss and the taxpayer takes an open-ended risk of loss. The banks also know more about their bad assets than the Treasury and will offload the worst onto the taxpayer. If the semi-nationalised banks do require more capital, the Government should invest in ordinary shares which would enable the taxpayer to shape any "upside" potential.

The Nobel Prize-winning-economist Paul Krugman says the recession would "certainly" be worse if David Cameron's cost-cutting agenda was implemented, and dubs it "pure Herbert Hoover." Fair?



Krugman is making the fair point that if there were fiscal contraction it would aggravate recession. There is, however, a theoretical debate as to whether or not fiscal policy works in current conditions. My view is that the issue is one of timing: a fiscal stimulus is needed now but will have to be followed by tightening to deal with the big "structural" deficit in the budget.

You were rather ill a couple of months ago? Have you recovered?



I had an appendix removed by keyhole surgery. Thanks to good NHS care I was out of hospital quickly and fully recovered within a week or so.

If you had to pin it on one thing, what would you say caused the destruction of the Labour Party we are witnessing?



The obvious explanation for Labour's terrible position is disillusion after twelve years in office culminating in economic failure for reasons which are partly global but partly national. But I think there is a deeper problem: the loss of the ethical compass which used to sustain the Labour Party even in bad times. The Iraq war. An obsequious approach to the super-rich. A betrayal of Labour's traditional support for civil liberties.

Which economist have you been re-reading most through the present crisis? And which of Keynes, Minsky, Schumpeter and Marx are the best guide to what happened over the past few years, and why?



Of that list, Minsky is the most interesting and relevant to the crisis. He provided, in Stabilising an Unstable Economy, a graphic description of the process by which financial markets overreach themselves through excessive risk-taking, and how euphoria and greed take over from rational decision-making. He provides a strong and healthy antidote to the efficient markets hypothesis which has dominated recent financial economics.

What does the number of super-privileged toffs at the top of the Tory party, and their very limited life experience, tell you about class in Britain?



I don't object to Messrs Cameron and Osborne because they are "super privileged toffs" who were in the Bullingdon Club. The Labour Party is making a mistake by focusing on class origins. The lack of life experience is more relevant, but the central issue is what they stand for now: nothing very much except an insatiable appetite for power and a willingness to say or do whatever is necessary to get there. There are, of course, serious inequalities of wealth, income and opportunities and we need to ask why 12 years of Labour government haven't lessened them.

Are there any contemporary public intellectuals – Noam Chomsky, say, or Paul Krugman [Nobel Laureate in Economics], or Amartya Sen – that you really admire for their politics or their economics?



Of that short list of public intellectuals Amartya Sen is my personal favourite. His work on development, and in particular the origins of famine, is outstanding. He is an original thinker rather than an ideologue like Chomsky.

Do you think there should be more academics in politics? I get the impression our political class isn't very bright.



Academic study and brightness don't necessarily correlate though it obviously helps to have training in logical thought. I think there is a general lack of real-world experience in Parliament, be it in business, or on the shop floor, or the professions. When I was in Glasgow as an academic I learnt rather more of enduring value as a Glasgow city councillor.

In all probability the Lib Dems are going to take a battering from the Tories in the South West, where you've got a number of marginal constituencies. Don't you think this will cancel out any gains you make in the north?



We are well placed to fight off this "battering". Our MPs in the South West are well dug in as local champions and strong constituency MPs. There are also potential gains – like Chippenham. There will undoubtedly be gains elsewhere, not only in the North.

How can you be proud of your membership of a party which has split the Left vote in Britain since its inception, so guaranteeing victory to right-wing ideologues? You should be ashamed of yourself.



This sounds like a rant from the early 1980s and SDP days. In large parts of the country – especially rural and suburban areas – the Labour Party has effectively died out and the Lib Dems are the only realistic alternative to the "right-wing ideologues".

If you absolutely had to choose between Brown and Cameron to be our next Prime Minister, who would you choose?



I would never put myself in the position of choosing either. The Lib Dems are a viable alternative to both.