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A catalogue of credit-crunch cant

Simon Nixon

Wednesday, 24th September 2008

Simon Nixon challenges the new conventional wisdom that all bankers are greedy, share traders are spivs, governments know best and capitalism is doomed

We live in frightening times. Markets are in freefall; economies are in turmoil; the financial system is on the brink. People want simple explanations and easy answers. They want to know who to blame for the mess and what can be done to clear it up. Just as well, then, that there is no shortage of politicians ready to fulfil this need. The dictionary defines ‘cant’ as insincere, pious or moralistic talk. If cant was a commodity, it would be the first big bubble of the post-credit-crunch world.

Already debate over the credit crunch is being reduced in some quarters to a series of simplistic narratives in which all bankers are greedy, markets are evil, governments are good and capitalism is doomed. Politicians who showed no interest in the City whatsoever for a decade — except to sing its praises as the engine of the UK economy — now claim to have seen this crisis coming for years. Often these are the same politicians who until a few weeks ago were still arguing over how to share the proceeds of growth.

Anyone who tries to challenge the emerging conventional wisdom gets short shrift. On Newsnight last week, Jeremy Paxman was breathtakingly rude to a respected City economist, Diana Choyleva of Lombard Street Research, who dared to suggest that the bubble may have been partly the fault of policymakers rather than solely the fault of bankers. But it is important that trite explanations for complex problems are challenged before they become the basis for muddled policymaking that leaves us even worse off. Here are my top five examples of credit-crunch cant.

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