Wednesday 27th May 2009
'The Second Great Crash: The Political Consequences of the Financial Crisis'
By Professor Andrew Gamble from Cambridge University
Spending a couple of hours in the company of Professor Andrew Gamble last week was certainly a couple of hours well spent. At the University to deliver an extremely well attended public lecture, Professor Gamble looked at the scale of the current economic crisis. Not only is the crisis an economic one, but it has huge political and ideological consequences world-wide. Tony Blair has likened the crisis to a tsunami – meaning that it was totally unexpected – but was it?
Professor Gamble looked at the crisis in terms of its immediate causes (sub-prime mortgages, over borrowing, under saving etc), proximate causes (dotcom, commodities and housing bubbles etc) and long-term causes (economic and policy cycles). The crisis the UK is facing can be traced back to July 2007 when the sub-prime mortgage problem first emerged in America.
What was interesting was that a big part of this situation has come from what Professor Gamble calls ‘the psychology of the upswing’; the fact that even though recessions have happened many times before, when the country is enjoying a boom the belief is that it will go on forever - even if that is a rather naïve belief!
We have seen financial, economic and political ‘meltdowns’ as consequences – a collapse of trust in the banking system, tightness of credit, bankruptcies, political fall out etc. Indeed he believes that one of the key factors that gave Barack Obama the presidency was the blame attached to the Bush administration for the financial crisis.
In terms of how far this crisis might go, he gave us his thoughts on what he thought could happen but not what would happen – a question that I think the whole audience wanted answered!
Professor Gamble’s latest book on this subject, ‘The Spectre at the Feast: Capitalist Crisis and the Politics of Recession’ is out now.
Words by Louise Russell