Matthew Norman: How often does Vince Cable have to be right before they make him Chancellor?

Cable has left Osborne for dead as a repository for public faith in matters economic

(Andy Watt)

When Steve Jobs opted for the "shut down" option for the final time back in October, it fell to the peerless satirists of The Onion to catch the mood with typically elliptical brilliance. "Last American who knew what the fuck he was doing dies", ran the headline, and in that lay all you really needed to know about the absolute despair in Western democracies about the competence of elected politicians.

God willing, it won't be for a couple of decades, but recent events in the realm of banking suggest a similar headline may greet the demise of Dr John Vincent Cable. Sweet John Vincent is how I think of the 69-year-old amateur hoofer from York, in Ian Dury's growly dulcets, but plain Vince is best. If any modern politician has earned the right to be known by his first (technically, second) name alone, in the manner pioneered by the Admiralty on 3 September 1939 when it cabled every Royal Navy vessel "Winston is back!", it's him.

Vince is having another fine week for his soothsaying reputation, but he must nonetheless be sick of playing Cassandra. This business of him issuing the SOS, first being ignored, then being vindicated, and lastly receiving next to no credit for being right in the first place would irk a less curmudgeonly chap than our (Victor) Meldrovian Business Secretary.

He warned about unsustainable cheap credit and the consequent risk of a crash, and no one paid a blind bit of notice. He pinpointed the structural weakness at Northern Rock and called for its nationalisation, but until it was almost too late a Labour government faffed about in virtual paralysis. For inadvertently declaring war against a Murdoch media stranglehold, he was ridiculed and fined a chunk of his portfolio. By then, he had already spoken about casino banking in general, and Bob Diamond's appointment as Barclay's CEO in particular, in terms that were rather less in vogue in polite political society than than they are today.

He spoke about the banks presenting a graver threat to this country than the trade unions, and of the dangers of the non-interventionist approach to capitalism. "Markets are often irrational or rigged," he said with wonted prescience, long before most of us were world experts on Libor. "Capitalism takes no prisoners and kills competition where it can."

In another speech, he said: "We are worried about this combination of the casinos and the traditional banking. Mr Diamond illustrates in a particularly graphic way what happens when you have an extremely highly paid head of an investment bank taking over one of these major international banks."

His boss didn't listen, but why would he? With his vast experience of the real world and his staggering intellect, George Osborne needs no advice. What with knowing it all, his instinct was to dissipate the banking reforms proposed by John Vickers, and apparently still is. Just a few days ago, Norman Lamont, among others, urged him to quarantine investment banking from high street operations as Vickers suggests.

Whether or not another cute little U-turn is imminent, one pressing question today is why Obsborne is Cable's boss at all. Transparently, Vince should be Chancellor, and George... well, something less important. So, here's a challenge. To the first person who can explain to me, but in entirely non-party political terms, why a man who is pretty much right about everything is junior to one who is invariably wrong, I offer an all-expenses-paid trip (ticket, transport, hotel, spending money) to the Olympic 100 metres final. Unfortunately, you'll have to pay all the expenses yourself, but we can't be quibbling about minutiae at a time like this.

Westminster politics these days is a sprint, not a marathon, of course, and all the worse for that with all four berths in that omnipotent quartet occupied by overgrown teenagers who never did a useful day's work before running the country. (This may be unfair to Danny Alexander, who five minutes ago was press officer for the Cairngorms national park). Yet the race isn't always to the swift, or so my bible teaches, and those seeking a heartwarming Cable fable will take succour from the shock result between the tortoise and the hare.

In his unflashy, steady, plodding way, Vince has left Osborne for dead as a repository of public faith on matters economic, while, as the commentator Peter Oborne has observed, he has become the Coalition's moral core. When he speaks or fashions a policy, he does so not for short-term tactical gain, be it a flattering Daily Mail headline or in response to whatever a few nebbishes told their focus group monitor over the warm Jacob's Creek in a Slough hotel conference suite, but because it is what he believes to be right. If that sounds devilishly simple, no one else with an economic portfolio on either front bench seems desperate to give it a crack. Perhaps it's too mustily old-fashioned for the young 'uns, though it seems to work for him.

It should go without saying that Vince must, and very likely will, lead the Liberal Democrats into the next election. Being a pragmatic sort of chap, Nick Clegg is aware that he is purest ballot box strychnine. Even if he doesn't see that the tuition fees disgrace will cost him his university-dominated seat of Sheffield Hallam, he can be relied on to do the decent thing in Vince's favour. This is not to suggest that this Lib Dem winter of discontent will be made glorious summer by this son of York. But with his authenticity, moral authority and unique ability to keep saying "I told you so", not to mention that mordant wit, Vince would slaughter Messrs Cameron and Miliband in the televised debates. Whatever slim chance the Lib Dems have of surviving with more than a couple of dozen seats rests entirely with him.

But the next election probably won't arrive for two or three years, and before then the choice for David Cameron couldn't be clearer. He can stick with Osborne, whose budget cataclysm and championing of Andy Coulson have terminally degraded him as both Chancellor and Tory chief strategist; a man who, delving into Vince's own Stalin-Bean lexicon of lethal insults, has gone in a few months from Machiavelli to Benny from Crossroads. Or – and I think we can all guess how this one's going to play out – the Prime Minister could overcome his personal and tribal loyalties, and endure the seething rage of the Tory right, by giving the most important job in the country to the last man in Britain who knows what the fuck he is doing.