Rowan Williams was thoughtful, incisive, and about as radical as his position allows him to be. I think the Pope is doing him a favour by offering to take all the extremist nutters off his hands. Just one thing he said in the Q&A session I didn't understand, so I'll raise it here in case anyone can clarify: there seems to be a problem with the employment rights of Anglican clergy in that their employer is not the Anglican, but God(?) So they can't have normal trade union representation? I don't really understand this - how can your employer be an entity whose existence is disputed? That would mean that if God didn't exist you wouldn't have any employment contract at all. It would seem much simpler to just say that the Anglican Church employs priests. Anyway, it's not a point that's relevant to the rest of this post, but I found it bizarre so I'll mention it anyway.
The morning panel session with Ann Pettifor, Gillian Tett, John Kay and Dave Prentis was also v interesting. John Kay has moved from someone who was a mainstream Conservative in the 1980s to a radical now and that is really quite amazing, given that - as with other former establishment stalwarts such as Meryvn King and Adair Turner - he's not the first person you'd expect to man the barricades. John Kay's main point deserves reiteration here so I'll summarise (vidcast available here). Like Paul Krugman, Kay sees the current crisis as the latest in a series of asset price bubbles, followed by collapses which have been addressed by governments flooding the financial system with liquidity - thus reinflating the bubble a few years later. Phase 1 was the Asian crisis of 1997-8, Phase 2 the dot com bust of 2000-01 and Phase 3 the credit crunch of 2007 and following.
Because policymakers have been either too unimaginative, too in hock to the financial sector, or too stupid to reform the financial system, John feels we are now headed into Phase 4 of the crisis - which could well be the terminal phase. Another collapse could lead to the breakdown not just of the economic system, but a number of national political systems as well, as people will (rightly) be hopping bad with the bankers, but their anger will be directed towards populist solutions. If the left doesn't emerge with a coherent response to the crisis in terms of major institutional reforms (Kay recommends separating utility banking from investment banking), the extreme right could benefit instead. In other words we're looking at 1933 all over again. Apocalyptic stuff perhaps, but it would certainly fit in with what the more intelligent sections of the left have been saying about this crisis for a long time now.
I'll probably refer back to more from this conference in posts to come over the next couple of weeks as it was such a good analysis of where we're at at the moment. Well done for the TUC for putting it all together. I must start regularly reading John Kay's FT column.
