What could some artsy-fartsy novelist possibly know about banking? – One can almost hear the roars from the snug bar of the Briefcase and Wallet (EC1). A surprisingly large amount, it turns out. John Lanchester’s ‘Whoops; Why Everyone Owes Everyone And No-One Can Pay' is about as lucid an account of our current financial woes as the lay person is likely to get.
Lanchester, a novelist whose work frequently reflects the world of work in various guises was an early adopter of the anxieties many had as what at first seemed a mere housing bubble rapidly revealed a larger, nastier creature lurking beneath.
His account reflects those of Gillian Tett and John Authers of the Financial Times, and despite some blokey asides, is a better guide than that of the current President of the Board of Trade, Vince Cable’s ‘The Storm’.
Lanchester is good on explaining the mechanisms which brought the financial world close to total collapse, but like most of us uncertain about how to find the exits from the boom and bust cycles we imagined were a thing of the past.
Lanchester proves an excellent guide to the bob-sled ride which the past years have been, pointing out the wreckage along the way and explaining how such horrors came to pass.
His contemporanity, however, fails when it comes to the elephant in the room – the rush to de-regulation in the nineteen eighties, which was embraced in the UK for doctrinaire as much as other reasons.
Quick to name and rightly shame David X Lee, whose mathematical modelling led to the over-valuation of sub-prime mortgage stock, Lanchester goes on to point the finger at a system which encouraged as well as permitted such over-valuations.
Not all the villains in this sorry tale remain unrepentant, however, and Lanchester gives Alan Greenspan credit for his public apology for his part – the only ‘Gusty Spence’ moment of contrition we have thus far seen.
It is, of course, going to take more than saying sorry to put matters right. Although Lanchester is willing to take on a Senna the Soothsayer role and suggest that the remaining sub-prime mess still contains some mightily unpleasant matter yet to be revealed, and that a further crisis may well be needed to act as catalyst to much-needed re-regulation, he has no ‘quick fix’ to offer, nor further insight, other than observing that behaviours and expectations of both the financial sector and consumer need to moderate. There would seem to be little hope of this in the foreseeable. Individually and collectively, our sock under the bed remains seriously at risk.
Exploring The Global Financial Downturn & What It All Means Now was at the 2010 Edinburgh International Book Festival on Sunday 29 August