In 2002 former editor of the British national newspaper The Observer and current Chief Executive of The Work Foundation, Will Hutton, published a book entitled The World We’re In. It was a thoroughly damning indictment of the state of USA’s financial regulation of its own economic sector. Hutton argued that eventually, the US’s relaxed economic regulations on its businesses, and the subsequent laissez-faire lending to anyone and everyone who wanted to borrow money, would eventually lead to a catastrophic economic collapse.
Six years later and, as Hutton would argue unsurprisingly, the world has just witnessed one such global economic meltdown. Newspapers are reporting daily on how the crisis is continuing to worsen, and as literally billions of people around the world struggle to survive after seeing entire economic sectors collapse, it is hard to argue against Hutton’s remarkable foresight.
He would argue, however, that nothing about this global recession is remarkable at all. Hutton saw the irresponsible lending to British and American banks for what it was; a ticking time bomb of public debt that would rot the banks from the inside out as more and more people failed to pay back what they owed. Not only was this fuelling false economic growth, he argued, but unchecked it would also lead to a stupendous collapse in the whole banking sector. Full marks for accuracy there, then.
Read from start to finish, Hutton’s chillingly accurate prediction of global recession – caused primarily by years of Republican deregulation of the American banking sector, a philosophy that had infected even the British Labour party’s own policies – makes what now seems like an incredibly obvious and simple point. The question is why no other political or financial analysts in the world have seemed able to grasp this fundamental point too.
President Obama’s Role
Hutton also addressed the social consequences of this economic meltdown, and the steps that would be needed to set it right. America, he said, would need a Democratic President who would take major steps to introduce a level of regulation in the banks which not only the people of America, but that the world, could also trust. Enter President Obama, a Democrat who has already begun working to tackle his country’s banking sector inherent failures, and whom many analysts have said gained a huge proportion of his votes through ex-President Bush’s perceived inability to deal with such a flawed banking sector.
Perhaps in future the world should take a little more notice of what Mr. Hutton has to say, and we can only hope that his next book has a more positive outcome for the world’s ailing economy.