Johann Hari

The Barack’n-roll jet has returned to the United States, and it’s just one hundred days until we know how the tour t-shirt will end: Kabul, Baghdad, Berlin, London… the White House? Now we are poised for their next move: the unveiling of the Veeps. In the next fortnight, John McCain and Obama will pick their Number Two, the man or woman who will take the keys if they take a bullet. While the debate has mostly been a personality-obsessed tide of tedium, if we blow off the froth we can find hints about the future of US politics – and the world.

The Republican hunt for a Vice-President has focused on one word: money. Panicked conservative commentators and senators have urged McCain to find a super-rich man to bolt onto the ticket, fast. Why? Because he could “invest” tens of millions of his own cash in the campaign – and persuade his friends to do the same. George W. Bush’s former chief speechwriter David Frum says mega-bucks Mitt Romney is the current favourite for Republican Number Two. It seems the Reagan-Clinton-Bush years have made Big Money so central to the US political system that, in Frum’s words, “the Pluto-Vice Presidency” is back.

The last time the top 1 percent owned a tottering 50 percent of America’s stocks, Charles W. Fairbanks was put onto the Republican ticket simply because of his towering wallet. It was normal then. Plutocracy was so integral to the political system it was standard-practice to be a heart-beat away from the Presidency just because you were super-rich and prepared to spend, spend, spend to protect your interests. Enter Mitt Romney, stage right.

McCain has already sailed full-speed in the direction of his super-rich donors. His campaign has taken a fortune from the oil companies. In return, he promises to give them $4bn in tax cuts a year, to drill off the coast of the US, and to maintain US troops in Iraq even as the country’s Prime Minister asks them to leave. It’s a logical next step to actually put a representative of the super-rich on the ticket, forever needling on their behalf.

Yet some naïve observers are shocked – shocked! – because McCain built a reputation as a campaign reformer. But they forget the context. McCain only began to call for restrictions on corrupt donations after he was revealed to have taken a great tide of them. In the late 1980s he took money from a fraudster called Charles Keating, and in return lobbied hard for the government regulators to stop looking into his affairs. It worked. Keating went on to steal billions. McCain’s reputation was busted – until he tried to make Big Money itself the issue.

But even as he was apparently campaigning for change, McCain continued taking donations from the super-rich and then lobbying federal regulators on their behalf. Now he even says he will appoint Supreme Court justices like Antonin Scalia, who is committed to striking down campaign finance reform. McCain’s biographer – and one-time supporter – Cliff Schechter concludes he “was merely attempting to put the dogs off the hunt of his shady dealings.” Pairing McCain with a super-rich tycoon would be a perfect symbol of what the world can expect from his Presidency.

What about Obama’s hunt? We’re told to expect the unexpected, with whispers he may appoint recent or current Republicans such as Mike Bloomberg (yes, a billionaire plutocrat), Ann Veneman, or Chuck Hagel. The Democratic Party has long been enmeshed in the same corrupt hunt for money as the Republicans: Obama himself took money from the coal industry and in return opposed Kyoto until 2004. He has spoken out against this kind of corruption – but he keeps hovering up the cash, even now.

Why? Because it is these big moneyed interests that end up defining what counts as the “political centre” in US politics. For example, 80 percent of American citizens consistently say the government should guarantee healthcare for everyone – yet this is considered left-wing and way-out-there. The New York Times says there is “no political support” for it, and Obama doesn’t advocate it. Why? Because no huge corporations or super-rich donors will cough up cash for campaigns calling for it. They make huge profits from the current system – so they only support its political defenders. When Obama is applauded by pompous pundits for moving to The Centre, they don’t mean he is getting closer to centre of The People, but to centre of The Money.

Yet the politicians who have best articulated this seem to be dropping out of the Veepstakes. John Edwards has apparently been outed as having a love-child. Al Gore doesn’t want to do it. And Jim Webb – the Senator from Virginia – has said firmly he won’t do the job.

But it’s worth dwelling for a moment on Webb, because he showed it is possible for a Democrat to win in long-time Republican states by crow-barring open these taboos. Webb is one of the most striking figures in US politics: a boxer-novellist, an ex-Marine-intellectual, a “redneck with tattoos” (his words) who quotes Tolstoy. Webb grew up in a military family, moving all over the South. He was intensely conscious of being part of a poor but tough Scots-Irish tribe that had migrated centuries ago to America from the Highlands of Scotland. He fought in Vietnam and became a Republican, serving in the Reagan administration – until he realised his tribe was being scammed by the right.

When for the Virginia senate seat in 2004, Webb started off 33 percent behind. Today, ‘populist’ is an all-purpose swear-word, shot at any politician who tries to mobilise popular support against an entrenched elite. But Webb picked it up from the gutter and pinned it to his chest as a badge of pride. The great movement of Populists who emerged in the 1890s across the South were the first to fight for the direct election of Senators, a graduated income tax, and an eight-hour workday. What’s to be ashamed of there?

Webb repeated their cry, warning: “The existing law in America has become class law, a disguise that allows certain privileges to flow to a few dominant groups at the expense of the many.” The US system is filled with politicians “who have made Faustian bargains in order to obtain the vast sums of money necessary to fund their campaigns” and are “akin to mouthpieces for special-interest groups.” He warned that the Iraq War was being promoted for profit and would be “a disaster”, creating even more jihadis. Result? He trounced his money-bloated Republican opponent.

We can’t solve any of the great challenges of our time –global warming, or jihadism, or spiralling inequality – until we have broken the lock the super-rich have on US politics. McCain very obviously won’t do it. Does Obama want to begin the slow work of picking that lock and tossing it aside? (Yes we can, Barack.) If he does, he mustn’t appoint a right-wing Veep, just to appease an artificially-constructed centre set up by the super-rich. The US should be the Land of the Free – not the Land of the Fee.

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And so the story of the moral implosion of the British prison system comes to this: we are imprisoning people in toilets. Doncaster prison – run by the private firm Serpico – was designed to hold 800 people, but it now pens in more than a thousand. So the governors have put beds in the toilets, and detained people there for more than eighteen hours a day, week after week. In toilets. In Britain. Today.

There are now two prison systems in this country. There is Her Majesty’s Prison Service, where mad and broken people are warehoused alongside the genuinely violent in cramped and fetid cells. Then there is the Fantasy Prison System, implanted by the press in the public imagination, where pampered prisoners are given foot-massages while watching flat-screen TVs.

No matter how many prisons I visit, from Wormwood Scrubs to Feltham Young Offender’s, I cannot find the holiday camps. Instead, I find prisons that clunkingly conform to every ‘tough’ demand of the right – and are therefore are placing you and your family in greater danger.

Allow me to explain. When our prisons contained 40,000 people, back in 1993, they managed to make 47 percent of the inmates go straight. But today – after cramming twice as many people into almost the same space – that rate has dramatically plummeted to just 25 percent. The rest graduate to the same or worse crimes.

We know what makes criminals less likely to reoffend. We have known for years, from study after study after study – but drunk on rhetoric, we are speeding in the opposite direction. So let’s go through the recipe that turns really prisoners into law-abiding citizens, abandoned in the mid-1990s when Michael Howard got Britain smoking the crack-down crack.

Ingredient One: Transfer the mentally ill into secure hospitals. The first thing that strikes you in any prison is how many of the people there are insane. One sixty-year old man diagnosed with serious brain damage staggered up to me in the bowels of Wormwood Scrubs thinking I was his father. The government admits 13 percent of our prisoners have schizophrenia and 70 percent have one or more diagnosable mental disorder. I could fill this newspaper with descriptions of prisoners who stab their own necks with knives or set fire to themselves at Her Majesty’s Pleasure.

There is another way. The state of Pennsylvania was facing the same prison-problem as Britain – so they decided that if the police arrest a mentally ill person, he should no longer go into the normal courts system. When, say, Sally Judson – a diagnosed schizophrenic who developed a heroin habit– was picked up for disorderly conduct recently, she was taken to a mental health ‘court’. Instead of jailing her, they drew up an action plan with her. They found her a doctor, a therapist, and a waitressing job. If she relapses on heroin, there is a rehab place waiting for her. This system works: mentally ill people have a 55 percent reoffending rate in the normal courts, but in the mental health courts it is just 10 percent.

Ingredient Two: Make sure prisoners stay in touch with their families. You can hear the Gaunt-groans and the Littlejohn-lies now: who cares if some criminal bastard can’t speak to his baby-mother? But the evidence shows this is the single biggest factor in keeping a criminal from reoffending. If you manage to keep your partner, you are 20 percent more likely to stay of jail. But our prisons actually militate against this. Because of the severe overcrowding, some 37,000 prisoners are being held more than three hours’ journey from home, and 5000 are being held more than six hours away. Their mostly-broke families can’t afford the long journey. Telephone? BT charges seven times more to call home from prison than it would cost from a normal phone box. Far away and expensive to phone, nearly half of male prisoners currently lose touch with their families.

Ingredient Three: Make sure prisoners aren’t illiterate and homeless when they walk out the prison gates. When they arrive, a third of prisoners can’t read or write a word. They almost invariably leave as they came. The Adult Learning Inspectorate found fewer than 8 percent of prisoners have are taught to read and then given meaningful work that could lead to a job on the outside. Worse, one third of prisoners are released to “No Fixed Abode” – a friend’s couch, if they’re lucky. If we send prisoners back out homeless and illiterate, what do we expect will happen?

In Liverpool Prison, I saw a brilliant scheme where prisoners are taught construction skills – and then use them to do up an abandoned council house for them to live in when they leave. It’s a crime-busting double whammy: work skills, and a house nobody else wanted. Why isn’t this being done in every prison in Britain?

Ingredient Four: Medicalize prisoners’ drug addictions. Some 12 percent of prisoners are heroin addicts, imprisoned either for possessing the drug or committing property crimes to feed their ravaging need. Wouldn’t it be better to spend the £40,000 of jail money to put them in rehab? True, heroin addiction is so powerful that the even the best rehab in the world fails with 80 percent of addicts. But for them, we can prescribe a clean, legal supply for £4000 a year. Then they can lead healthy lives: Arthur Conan Doyle and the father of modern surgery, William Halstead, did. When the Swiss did this, burglary fell by 70 percent.

Ingredient Five: Make sure prison is only for violent and sexual offenders. There are around 16,000 vaguely sane people in our jails who have committed violent or sexual offences. They need to be banged up while they are exhaustively rehabilitated, for however long it takes. But if they are crammed in with 64,000 others – the shoplifters and graffitists and cannabis dealers – nobody gets any treatment and nobody gets any better.

Indeed, the evidence shows the opposite happens. Professor Carol Hedderman has calculated that the growth in the prison population is due to a huge rise in short sentences of six months or less. They are all for crimes that used to be dealt with by community service – like the two teenage boys in Deerbolt who have just been sentenced to 15 months in an adult jail for graffiti. That’s long enough to put in place all the factors that drive up crime – they lose their job, their house and their girlfriend, and their debts spiral – but not long enough to teach them anything, even if we tried. This is the reason for the surge in reoffending.

Yet still the government builds more mega-prisons, while the Tories yelp for them to go even further and faster. Why? Every politician wants to be seen as the Toughest Daddy, cheered on by a press that raves against a prison system that doesn’t exist. But the ‘tough’ approach – shove ‘em in the toilets, teach ‘em nothing – produces more crime. The macho swagger hides glass testicles. No: we need to show this isn’t about soft vs. tough, but about smart crime-busting policies vs. dumb crime-boosting policies.

But for today, reason and evidence remain locked away in the prison toilets. Isn’t it time we let them out?

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POSTSCRIPT: Here’s a strange compare and contrast for you. In his column for the Times yesterday, the Conservative columnist Daniel Finkelstein said Labour’s prisons policies – doubling the number of people in jail – have worked because the overall crime rate has fallen. In my column today, I argue Labour’s policies have actually made crime worse.

(I should note that Finkelstein is one of my favourite columnists on the right. Although we almost always disagree, he is genuinely fizzing with ideas and facts, rather than raving and prejudice.)

At first glance, it might look like Finkelstein has the figures right: it’s certainly true crime has fallen, and it’s certainly true more people have been sent to jail. But it’s a classic logical error to assume correlation is the same as causation. The fancy term for it is post hoc, ergo propter hoc: this event happened afterwards, therefore it happened because.

How do we know in this instance it’s wrong? There are two reasons. First, crime has been falling in virtually every developed nation over the past decade, irrespective of the penal policies it pursued.

In the US, New York City emphasized prison (as Finkelstein notes); San Francisco emphasized rehabilitation (as Finkelstein doesn’t note). Both saw a huge drop in crime. In Europe, Britain emphasized jail; Finland emphasized rehabilitation. Again, both saw a huge drop in crime. (Finland’s fell from low to very low, since rehabilitation was already pretty advanced.) The reasons for this are complex, but the most obvious is that there has been a period of spurting economic growth – and throughout history, they are almost always accompanied by drops in crime.

Secondly, it’s true that – on every measure – a random British person in 2008 is much less likely to commit a crime than in, say, 1993. But there is one exception, and one exception only: if you have been released from prison. If you were an ex-prisoner in 1993, you had a 53 percent chance of reoffending within two years. Today, it is 75 percent. The policy Finkelstein claims has reduced crime – prison, and its after-effects – is actually the one life-stage where crime has risen significantly.

Doesn’t this puncture his argument somewhat? Doesn’t it undermine the belief that mass imprisonment is responsible for the fall in crime when in the one area where its effect can be directly measured, it has caused it to increase - dramatically?

Sometimes in politics you have to suppress your gut reaction. When you hear about the Government's proposals, published today, to force benefits recipients to work, your stomach may turn gaseous and sore. They will be sold using some of the ugliest associations, with government spin-doctors smearing benefits recipients as all Shameless-style "scroungers" to The Sun, and pledging to "crack down" on them. But I think – broadly, and beyond this foul rhetoric – it is the right thing to do.

There are two reasons to believe there is a problem with the current benefits system. One is loathsome, and one is true.

You can believe the system is flawed because it takes Your Tax Money, and gives it to poor people. You hear this argument incessantly: why should my cash go to chavs/Vicky Pollards/insert-your-dehumanising-caricature-here? But if you are really worried about "scroungers" – people who get all the benefits of our society, but put nothing back – there's a group fleecing us for far more who you should start with: the super-rich. They can only make their money because their workforce is educated, kept healthy and defended by the taxes of all of us – yet they evade and avoid a stunning £42bn of taxes a year. That's enough to treble spending on primary schools, or to hand you the biggest tax cut in history. If you are so worried about Your Taxes, start with them.

But there is another argument for changing the benefits system: as it stands, it can leave people in a rut and let their potential leech away into nothing.

If you want a parable of this lost potential, look at my best friend from school, Andy. When we were teenagers, we would skive off together and hang about in the Trocodero centre, playing arcade games and smoking spliffs in the toilets. After our GCSEs, we dropped out. For a year we mooched around London, watching old films, playing video games, and – as all teenage boys do – moodily hating the world.

But at the end of that year, some impulse, some need, made me go back to do my A-levels, while Andy stayed in his house and mooched some more. He went onto benefits – and, with a few brief swings around the New Deal, he has never come off; not in the 15 years since. He is clever and funny and he could be making an amazing contribution, but inactivity is infectious. Once you sink into it, it consumes you. The muscles of work soon atrophy; you become convinced you can't do anything. With each year that passed, he saw the world of work as more alien. Andy has reacted to his worklessness with listless depression; lots of other young men respond with aggression.

Andy is hardly a lone anecdote. There are more than a million young "Neets" – Not in education, employment or training – in Britain today. We have a higher proportion than any other OECD country. Go to the place where I was born – Glasgow East, site of the potentially Brown-busting by-election this Thursday – and you will see them spreading before you in great concrete estates of poverty. You can taste the ennui in the air. Ask the kids what they want to do when they grow up and they shrug with heartbreaking indifference and say, "Dunno".

If those of us on the left get trapped into defending all this, we will lose the argument. This isn't what the Welfare State was intended to look like. You were not supposed to fall asleep in the safety net and raise your kids there so they know nothing else. What we need to do is transform the safety net into a trampoline that bounces you back up when you start to fall.

The Government is proposing to end a system where you can remain workless and lost for life. According to the leaks, it will work like this. If you apply for benefits, you will be swiftly matched up with jobs or training in your local area, and required to choose one. If there are none, or if you keep losing the jobs, you will be required to work in government schemes in return for the cash. If you absolutely and consistently refuse to do that, then you will not receive money. Andy wouldn't have slipped into his listlessness; he would have been firmly locked into the motion and social interaction of work.

There's an added spur to retool the Welfare State now. If Labour doesn't do it, the Tories will – and their plans really are brutal. David Cameron has said repeatedly that he wants to adopt the welfare reform introduced in Wisconsin in the 1990s. So how does that compare?

In the Labour model, you will never be cut off, provided you are willing to work. In Wisconsin, you can only receive benefits for two years in your entire life, and every week you claim, the clock is ticking. Once you hit your two years, that's it: your benefits are severed forever. After a long boom, claimants are only starting to hit the limit now the economy is turning down. The result? Food banks are running out of food, while homeless shelters run out of beds.

In the Labour proposals, you don't have to go to work until your youngest child is seven. In the Wisconsin model, you are forced to leave your baby at three months old. A typical victim is Clara, who has two small children and was forced to take a job two hours away by bus. "I have to get [my kids] up at five in the morning, and they don't want to go [to daycare]. I yell at them. They don't deserve it," she said. She pleaded at her benefits office: "Please don't make me go." When she stayed with her sobbing kids for a day, her job and benefits were immediately cut off.

There is one area where Cameron wants to diverge from the Wisconsin model – by making it even harsher. Welfare reform didn't happen in isolation. At the same time, the US government super-charged the system of tax credits, increasingly them from $5bn (£2.5bn) a year to $50bn. This meant that if you were poor and moved into work, you suddenly received fat top-ups on your wage-cheque each month from the government. Working really did pay. Professor Bruce Meyer, of the US National Bureau of Economic Research, calculates this was the sole reason why poverty didn't dramatically increase as welfare recipients were transferred in those first years into low-paid jobs. But David Cameron wants to introduce welfare reform while simultaneously slashing tax credits; he derides them as akin to the nationalised industries of the 1970s.

So there is a double-whammy of reasons why the slow work of helping Britain's estates back to work and to life has to be launched by Labour today. Leaving people like Andy in his rut isn't compassion; it's indifference. And if Labour doesn't press him to work, the Tories will – while trashing the lives of a lot of poor people along the way.

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When the almost six billion of us outside the US watch the contest for The Most Powerful Man in the World, we tend to focus on the candidates' foreign policies. If I was Iranian, say, I'd be anxious that John McCain keeps joking in public about killing me. As a bravo-bow after singing "bomb bomb bomb, bomb bomb Iran" to the tune of the Beach Boys melody Barbra Ann, he responded to being told exports of cigarettes to Iran are high by guffawing: "That's a way of killing them!"

But there's a way in which the next US president will affect you even more directly than foreign policy. By his economic decisions, the next president will help swing the price of the food you eat and the wages you earn – wherever you live on earth.

So it's a little worrying that John McCain – who still has a reasonable chance of winning – says: "The issue of economics is not something I've understood as well as I should... To be honest, I know a lot less about economics than I do about military and foreign policy issues. I still need to be educated."

This is a man who can't tell his Sunni from his Shia, and who opposed the Northern Ireland peace process as a capitulation to terrorism. And he admits he knows even less about the economy than that. On one occasion, he let his irritation with the subject slip by referring to it as "the credit cunt".

When he is forced to talk about the economy, McCain has always given the same answer: "I rely on the circle I have developed over many years – people like Phil Gramm." He has Herbert Hoovered-up his slivers of economic theory from this man – but who is Gramm? Until he briefly sputtered into the headlines a few days ago, nobody had cared to look.

Phil Gramm is an ornery old ex-Texas senator who seems to have swooped out of the most scathing H L Mencken sketch. He became McCain's "best friend in politics" – and started speaking to him every day – when they linked arms to stop Hillary Clinton's 1993 push to extend healthcare to poor Americans.

He calls for "ruthlessly" slashing government spending – but only focuses on spending on the poor. When he was told paying for healthcare plunged many 80-year-olds into poverty, he said: "Most of us don't have the luxury of living to be 80 years old, so it's hard for me to feel sorry for them."

Later, one of those very 80-year-olds approached him because she was terrified she wouldn't be able to pay her medical bills. Gramm laughed and told her to find herself a rich husband. He chuckled: "People say I don't have a heart. I do. I keep it in a quart jar on my desk."

But most relevant to those of us outside the US is that Gramm – more than any other figure in American politics – made the two great financial scandals of our time possible, and nearly brought the global economy down with him.

How? Gramm says government regulation of the economy is "akin to communism", and must be destroyed. His first great step towards this goal came in the 1990s, when he championed and pushed through the law that exempted Enron from both government regulation and public disclosure, on the grounds these were "unacceptable fetters on the free market". Enron was his biggest campaign contributor, and employing his wife to the tune of a million bucks.

So thanks to Gramm, nobody was watching over Enron any more. As a result, they embarked on a massive programme of fraud and pillage. After taking over the electricity market in California, they deliberately engineered blackouts in entire cities to drive up the price for power. In a surreal move, Gramm blamed "environmental extremists" – the nearest bogeyman to hand – even after it was proven Enron execs had paid the power plants to "get creative" in turning out the lights.

Gramm learned from the Enron scandal – to go further and push harder. He turned his attention (and his fund-raising) to the mortgage companies. Since the 1930s, there had been an unwritten deal in US politics: the government would rescue the banks if they grew sick, but in return the banks had to take the sensible medicine of regulation. Gramm thought this was "crazy": why would banks ever need to be rescued in a free market?

So in 2000, while everybody was riveted by the Gore vs Bush stand-off in Florida, Gramm slipped into a vast 3,000-page bill 268 pages radically deregulating the banking system. A legal textbook later called this "a stunning departure from normal legislative practice"; few lawmakers noticed it was there when they voted. Suddenly, the roles that had been reserved in the US for regulated banks were handed over to a vast network of unregulated financial institutions called the "shadow banking system." They began to offer wildly unsustainable mortgages to the poor at supersonic interest rates. Through accountancy-acrobatics, they then bundled these risky loans into exotic packages of derivative commodities.

All this was only legal because of Gramm's legislative footwork. He swiftly moved on from the Senate to a megabucks job at UBS, one of the banks raking in billions from his changes.

Within a few years, the entire system began to collapse without the support beams of state regulation. Sub-prime mortgages predictably fell apart, with 2 million Americans – mostly black and Hispanic – facing repossession. The state has had to step in with a much heavier hand than before – and even that will not prevent a recession now.

The billionaire Warren Buffet pointed out that Phil Gramm has twice tossed "financial weapons of mass destruction" into the US economy. Yet instead of shunning him, McCain made Gramm the co-chair of his presidential campaign, and hinted he might make him Treasury Secretary. McCain – the supposed scourge of buying influence – was even happy for Gramm to be simultaneously a paid lobbyist for the mortgage industry and helping to write his speeches about the mortgage crisis. The Gramm-grip on McCain's policies shows: incredibly, the wannabe-president responded to the credit crunch caused by deregulation by calling for even more deregulation.

The biggest question in US politics should be: would you buy a mortgage from this man? But it's a sign of how shallow the media coverage is that Gramm's ideological fanaticism passed almost without comment; he only became an issue when he made a silly verbal gaffe, claiming America is only in a "mental recession". (In CEO-Land, this is true: they are walking away with $100m bonuses from their failures.) Only then did McCain distance himself.

So it seems for this putative president, causing two major economic crises is fine – but speaking about them crudely is a step too far. Yessir: if you liked the credit crunch, you'll love McCainomics.

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