Cameron's economic policies will kill, not cure
Sometimes, the most urgent truths are rolled up and hidden away in the most apparently trivial news. So if I tell you that Moody’s, the leading credit rating agency, has downgraded Ireland’s debt, it sounds pretty irrelevant. In fact, if you unwrap and decode this story, you’ll discover the reason why you are going to be more likely to lose your job or your home soon – and how David Cameron is rapidly ramping up the risk.
George Osborne visited Ireland a few years ago to say it was a “shining example” for Britain to mimic. When the recession hit, the country’s government immediately applied the medicine Cameron and Osborne are now imposing on Britain. They argued that when the economy withers, the government needs to react like any responsible family and cut spending to pay down its debt. They warned that if they didn’t do it fast, the international bond market would charge Ireland more for its liabilities, and the debt burden would become intolerable. Better to purge now, so you can get back to fiscal health as soon as possible. “Look and learn from across the Irish Sea,” Osborne said.
So they have brought this vision home. During the election campaign, Cameron promised that his cuts wouldn’t be “swingeing” – but in power he is ordering cuts of 25 to 40 percent in almost all departments. To give you a sense of how drastic this is: Margaret Thatcher actually increased public spending by 1.1 percent in real terms per year.
We are in a strange hush while the axe is suspended in the air above us. If you read the small print, you see the spending plans put forward by this government of inheritee-millionaires will hit the poor first and hardest. The National Housing Federation says the number of homeless people will double as a result of their slashing of housing benefit. Half a million children living below the poverty line are having free school meals – the only nutritious meal of the day for many – cancelled. The unemployed are having £6.50 knocked off the £65 a week they have to live on. Ian Duncan Smith says “tons of elderly people” are going to be forced out of their “underoccupied” council homes. The list is long enough for a dozen columns. One minister recently told the Times the rationale behind it off-the-record: “The undeserving poor,” he said, “are undeserving.”
Meanwhile, a recent Financial Times headline summarised the situation at the other end of the economic heap: “Well-paid breathe collective sigh of relief.”
Before power, Cameron promised his cuts would not affect “frontline” services, but only the “backroom” and “waste”. Now NHS bosses have drawn up plans to slash hip operations, cataract surgery, and the number of acute hospital beds. All frontline services are facing similar shut-downs. When David Cameron promised he wouldn’t get rid of free bus passes, who knew it was because he would get rid of the bus instead?
A detailed study for Oxford University led by Dr David Stuckler calculates that there will be 38,000 premature deaths over the next decade as a result of all this – due to the reduced healthcare, dismantled services for the elderly and vulnerable children, increased suicides, and so on.
The Cameroons say – yes, this is rough, yes, it hurts, but it is for a necessary purpose. If we don’t do it, the bond markets will downgrade our debt and we will be even worse off. Only austerity can hold off the prospect of a debt crisis.
So let’s return to the truth buried in that little story on the financial pages. Ireland has been doing exactly what Cameron and Osborne urge, with a two year headstart. What are the results? Last week, a study by the International Monetary Fund – nobody’s idea of a left-wing pressure group – found that country’s economic collapse now “exceeds that being faced by any other advanced economy, and matches episodes of the most severe economic distress [anywhere] in post-World War Two history.”
Why? During a recession, ordinary consumers quite sensibly cut back and spend less. But if the government does the same, it means nobody is spending. This is bad enough for all the people who suffer immediately: the swelling army of the unemployed, the repossessed, the abandoned. But it turns out it makes its original goal – paying off the debt – impossible too. As the Nobel Prize-winning economist Joseph Stiglitz explains: “If you introduce austerity measures, the amount you can raise in tax falls, and welfare payments go up – so you don’t have enough money to pay your debts anyway.”
That’s why the bond markets have turned on Ireland. The country introduced austerity to pay off their debts – and the austerity killed their economy, making it impossible to pay off their debts in any case. It was self-defeating. So introducing all these cuts doesn’t only inflict misery: it doesn’t even achieve its professed goal.
Why choose this as a model to copy? Another Nobel Prize-winning economist, Paul Krugman, writes this deficit hawkery “isn’t based on either evidence or careful analysis… What sounds like hard-headed realism actually rests on a foundation of fantasy.” Krugman points out that they incessantly warn us “invisible bond vigilantes” will beat us up if we don’t cut, cut, cut – when the real bond market is beating up the people who have cut and left their economies to bleed out.
In 2010, to preach austerity as the solution to depression is the equivalent of drilling holes in your head to cure your migraine, while dismissing aspirin as for wusses. It’s a dogma, chosen because it fits with the slash-the-state instincts they learned as privileged young men in their 1980s champagne-dream.
Krugman, like most economists, says there is only one real way out. When consumer spending collapses, governments need to borrow and spend to prevent a depression – and then pay off the debt from the proceeds of growth once we have brought the good times back. It’s revealing that the countries that have done this hardest and fastest – like South Korea, which spent a fortune on employing people to green the country’s infrastructure – have been the first to pull out of this recession, while the countries glugging Cameron-juice have sunk deeper into the gloop.
Yet few people outside economics are making a full-throated defence of stimulus spending as an urgent moral cause. We need to say it loud: the choice today is between a deficit and a depression. It is immoral not to borrow and spend when it could revive the economy and prevent all these lives being written off. I remember what happened to some of my relatives in the eighties. The children who are supposedly being protected from the cost of the debt a generation from now need, in reality, to be protected today – from their parents becoming jobless and depressed, their homes being repossessed, and their schools and hospitals being chronically underfunded.
None of this has to happen. The more fuss the British people make – the more we demand the axe is put away, and replaced with jump-leads for the economy – the less leeway the government will have for self-defeating cuts. Protest needs to be focused on the Liberal Democrats in particular: they are mostly good people who do not want to be part of a Thatcher-on-mephedrone crusade. They have the power to pull the plug at any time. The more we spook them, the more likely that act of national self-preservation becomes.
Oh, and here’s a financial tip to leave you with. If you hold any bonds in Cameronomics, sell. They are about to slip from the AAA standard accorded by the right-wing press to junk status in the real world. To borrow a phrase from Osborne: look and learn from across the Irish Sea.
You can stream or podcast a debate in which I argue for the arrest of the Pope...
here. It's the Intelligence Squared debate from the Hay Festival.
Tony Blair plotted to free a terrorist in exchange for oil. Does this reveal something crucial about Iraq?
Is your life worth more to your government than a few pence added onto Big Oil's share price? At first, this will sound like a foolish question. But sometimes there is a news story that lays out the priorities of our governments once the doors are closed and the cameras are switched off. The story of the attempt to trade the Lockerbie bomber for oil is one of those moments.
Let’s start in the deserts of Iraq – because the Lockerbie deal might just reveal what really happened there. Many people were perplexed by Tony Blair’s decision to back George W. Bush’s invasion, which has led to the deaths of 1.2 million people. Blair said he was motivated by opposition to two things – terrorism and tyranny. First off, he said Saddam Hussein might give Weapons of Mass Destruction to jihadis. When it was proven in the rubble after the invasion that Saddam had no WMD and no links to jihadis – as many critics of the war had said all along – Blair declared he would do it all again anyway, because Saddam Hussein was a tyrant, and all tyrants should be opposed.
Most critics of the war said the real reason was a desire for Western access to Iraq’s vast supplies of oil. This debate has gone on for years. Now it emerges that Tony Blair plotted to hand a convicted terrorist – the worst in modern British history – to a vicious tyrant, in exchange for access to oil for British corporations. It seems to settle the argument in the darkest possible way.
Here’s how it happened. Just before Christmas in 1988, a flight from London to New York City was blasted out of the sky above Scotland by a bomb in the cargo. All 259 people onboard were killed, along with 11 on the ground. One man was convicted for the mass murder at a Scottish trial in 2000: Abdelbasset al-Megrahi, a former Libyan intelligence officer. Following the bombing, most Western governments imposed sanctions on Libya that forbade their companies to invest there. If you are opposed to terrorism and tyranny, it was a happy ending: an alleged terrorist was tried in open court and convicted, and a tyrant was shunned.
But within a few years Tony Blair was not happy. Why? The oil company BP wanted to be able to drill down into Libya’s oil, and tap the profits that would gush forth. Their then-CEO, John Browne, flew to Tripoli in the company of MI6 agents to find out what the dictatorship wanted in return for opening the country’s wells. It was, of course, clear. They wanted Megrahi back.
BP has admitted it lobbied Tony Blair to hasten into effect a prisoner exchange with Libya. They say they didn’t specifically mention Megrahi – but there was no need to. There were no other Libyan prisoners of particular note in Britain.
Blair’s administration was so intertwined by that point with the oil company that it was often dubbed “Blair’s Petroleum”. There was a revolving door between BP and Downing Street: BP execs sat on more government taskforces than all other oil companies combined, while Blair’s closest confidantes like Anji Hunter and Phillip Gould went to work for the corporation. He made two of the corporation’s successive CEOs into Lords, even appointed one as a minister to his government, and slashed taxes on North Sea oil production, causing BP’s share price to sky-rocket. By 2005, he was talking to Lord Browne at Downing Street dinners about what he would do after he left office. There were rumours at the time he considered working for BP.
Blair responded to BP’s lobbying with apparent pleasure. His Foreign Office Minister, Bill Rammell, assured Libyan officials that Blair did not “want Megrahi to pass away in prison.” His Foreign Secretary, Jack Straw, said a desire for Libya’s oil was “an essential part” of this decision. So Straw began negotiating a prisoner swap agreement, and urged the Scottish authorities to release the convict. He told the Scottish government in a leaked letter that it was “in the overwhelming interests of the United Kingdom” to let Megrahi go.
The chief negotiator for the Libyans was Mousa Kousa, a thug who had been expelled from Britain after bragging about plots to murder democratic dissidents here on British soil. These supposed opponents of tyranny didn’t blush.
There are, of course, some serious commentators who argue that Megrahi was framed. It’s a legitimate debate. But if he was, it should have been settled in court, at an appeal, not in a dodgy deal with a dictator to benefit BP.
Both sides now admit what was happening: they were trying to trade a convicted mass murderer for oil. Saif Gaddafi, the Libyan dictator’s son and second in command, said it was “obvious” that attempts to free Megrahi were linked to oil contracts, adding “we all knew what we were talking about.” When he later appeared on a TV chat show alongside Megrahi, he told him: “In all the trade, oil and gas deals which I have supervised, you were there on the table. When British interests came to Libya, I used to put you on the table.”
There is no question there was a plot. The only question is whether the plot worked, or whether it got what it wanted anyway by a remarkable coincidence. It was, ultimately, up to the Scottish politicians whether to release Megrahi, and they publicly refused a prisoner swap. We know that Straw lobbied them to do it, but they insist they made the decision independently on “compassionate grounds.” A year ago, Megrahi was sent home to Triploli to be greeted by cheering crowds after serving eleven days for each person murdered. Officially, the Scots had assessed him to have only three months left to live.
There are several facts that batter these claims with question marks. The most obvious is that, eleven months later, Megrahi isn’t dead. It’s the most amazing medical recovery since Lazarus. Or is it? It turns out the doctors who declared him sick were paid for by the Libyan government, and one of them says he was put under pressure by Libya to offer the most pessimistic estimate of life expectancy. Susan Cohen, whose only daughter died in Lockerbie, says: “Why didn’t the Scottish pay for the doctors?”
Indeed, a detailed investigation by the Sunday Telegraph reported that “the Scottish and British governments actively assisted Megrahi and his legal team to seek a release on compassionate grounds” – suggesting they were hardly neutrally trying to discover the medical facts. The Libyan dictatorship certainly took the release as a gift from the British government. The tyranny’s chief spokesman, Abdul Majeed al-Dursi, said: “This is a brave and courageous decision by the British… We in Libya appreciate this and Britain will find it is rewarded.” BP has indeed been rewarded: it is now drilling in Libya.
But releasing him this way was certainly easier. It’s hard to tell the public you released a mass murderer out of compassion for him, but it’s almost impossible to tell them you did it for oil. Senator Charles Schumer of New York says: “Once Megrahi is released, all the roadblocks to that oil deal are removed. If anyone thinks this is a coincidence, I have a bridge to sell them in Brooklyn.”
This affair seems to reopen the Iraq debate, in a way that vindicates Blair’s most severe critics. Tony Blair’s remaining defenders say he was motivated in Iraq by a hatred of terrorism and tyranny and had no regard whatsoever for getting access to oil. Yet at the very same time the Labour government was plotting in Libya to hand the worst terrorist in British history to a tyrant in exchange for oil. It’s proof that oil and corporate power were a much bigger factor in driving foreign policy than the public rhetoric of opposing tyranny or terror.
David Cameron refuses to establish an investigation into how this was allowed to happen. He has tried to soothe anger by saying he will release all the relevant documents – but the Cabinet Secretary, Gus O’Donnell, added soon after that Blair’s permission will be needed before any records of his conversations are shown to the public. Imagine if the police allowed suspects to take this approach: “Certainly, officer, you can look under my coffee table. But not in any of my wardrobes. Good day.”
For the families of all the innocent people slaughtered in Lockerbie, this has been a cold-water education in what their governments really value. Cohen, remembering her murdered 20 year-old daughter Theodora, says: “Western governments seem to be run by one thing now – the great God money. All that matters now is profits and money. Blood-money.”
There’s a revealing little postscript to this tale. Last month, Blair went to Libya on behalf of the large corporations who now employ him. He was greeted by Gaddaffi himself – who tortures dissidents and terrorizes his population – “like a brother”, according to the Libyans. There has even been rife press speculation that, now they need a CEO, Tony Blair will go to work for BP. In many ways, it seems, he always has.
Johann Hari is a writer for the Independent. To read more of his articles, click here or here.
You can follow Johann at www.twitter.com/johannhari101 or email him at j.hari [at] independent.co.uk
To read his latest article for Slate, click here
The shameful silencing of protest outside the British parliament
At the edge of Parliament Square, Winston Churchill squints – hunched and impervious and marble – over the gothic heart of British democracy. Usually, his only company is the smoggy traffic and snapping tourists. But for the past four months, he has been joined by another symbol, and another style of democracy.
In April, a smattering of tents was set up on this diesel-tinted green by citizens protesting against the war in Afghanistan. When I first saw them they were a mixture of students and activists and professors, voicing the conviction of 72 percent of British people – that the war is unwinnable and should end. One of them, Maria Gallasetgu, told me: “We have a responsibility to stand up to what they’re doing. It’s immoral.” She added: “We support the troops, that’s why we want to bring them home. They” – she pointed to parliament – “are the ones sending them to die.”
They held up signs with pictures of maimed Afghan children, and waved them at the MPs as they walked to work. The MPs invariably looked down and away and they hurried through parliament’s iron gates. These protesters are needed: despite the clear will of the British and American people, the war is being escalated, with an increase in slaughtered civilians of 23 percent in the past year.
As I looked out over this rag-tag of tents and posters, I realized that they didn’t only express the will of the people here – they were expressing the will of the people we are invading and bombing. The International Council on Security and Development just conducted an opinion poll of ordinary Afghans in Kandahar and Helmand, the places where these MPs have sent a surge of troops. Some 70 percent of them stand with the tents and camp-fires, saying the military operation is harming them and should stop.
So just a few metres from where the Prime Minister lives, people sat on an open green barbequing food and sharing drinks and calling for that Prime Minister to be indicted for war crimes. They had daily meetings where they shared out the responsibilities, while every fifteen minutes, Big Ben bonged. In that first month, I saw a group of Chinese tourists staring at the camp in disbelief. “This would never be allowed in China,” one of them said to me. “Not anywhere. Never mind at the centre of power. This is, I guess, what democracy really means.”
As the months went on, the tent-city developed and mutated with each time I visited. More protesters arrived, with a more eclectic range of grievances. A man appeared announcing he was starving himself because the courts wouldn’t let him see his children: he hasn’t eaten for more than 20 days. After hearing there was free food, a group of homeless people set up camp there too. (They are a harbinger: Shelter say David Cameron’s current policies will lead to a “disastrous” increase in the number of homeless people.) Suddenly, MPs didn’t only have to stare at the victims of their war – they also had to stare at the victims of their failed social policies.
That’s how it should be. They should see it every day – the faces of the Afghan children we have caused the deaths of, and the faces of the mentally ill people we have left to rot on the streets. I can’t think of a healthier sign in a democracy – that we don’t allow our problems to be cleansed, China-style, from the sight of the powerful, but leave them there, in full view, demanding to be dealt with.
Yes, a few parts of it smelled. But waging war in Afghanistan, against the will of the people there and the people here, smells a lot worse. Yes, there were a few crazy people in the tents. But none were as crazy as the belief that we can win a land-war in Afghanistan now, after nine years, with the population rapidly turning against us and pleading for a peace and reconciliation process. Freedom is not an “eyesore”, as London mayor Boris Johnson claimed: citizens pressuring their government for justice are the most luscious sight in the world.
Very early on Tuesday morning, the police came to force the protesters out, after Johnson got a court order. So now there is a clean, clear lawn again. Repressive governments the world over have seen footage of protesters being cleared from the lawn of the Mother of Parliaments, and chuckled with vindication. MPs will look out on a reassuringly empty space as they stroll in to make their decisions, with the public will unvoiced. And Winston Churchill stands alone once more, save for the tourists, and the traffic, and the false silence of a displaced citizenry.
The enduring truth-telling of Noam Chomsky
Noam Chomsky is one of the most hysterically abused figures in the world today. Even his critics have to concede that his work inventing the field of linguistics -- and so beginning to decode the structure of how language is formed in the human brain -- makes him one of the most important intellectuals alive. But when he applies the same rigorous scientific method to figuring out the structure of how power -- especially the American government's - works, he is pepper-sprayed with smears. He is a self-hating Holocaust denier, a jihad-loving traitor, a Pol Pot-licking communist, and on and on.
If all you know of his work is the smears, then his new book Hopes and Prospects will be a revelation. In his rather dry understated way, he excavates the reality behind the babbling Babel of 24/7 corporate news, and places long-buried truths on the table for us to examine. Every one is sourced to the leading academic journals, the best experts, the sharpest medical advice -- yet each one is a shock if you rely on news brought to you by corporations and corrupt right-wing billionaires.
So, for example, he uncovers the story of why Haiti is so poor, and could be shaken to pieces by an earthquake that would have killed only a handful in California. It's a story of man-made earthquakes, one after another. The country was the first to rebel against slavery and to successful cast off the whip-hand -- and so it was brutally punished by the French Empire. Every time it has begun to rise onto its feet, it has been kicked back down, with the American Empire taking over to topple its elected leaders (the last was put on a plane at gunpoint in 2008) and stifle any moves towards development.
But who knows? Who has heard about it? Who ties to hold our leaders accountable for it? Chomsky is trying to rescue crimes from the memory-hole, so we can remember them. He explains that Ronald Reagan -- the great hero of the American right -- was a great champion of jihadism. It was Reagan who encouraged Pakistan to simultaneously become viciously fundamentalist, and acquire nuclear weapons. Chomsky coolly condemns "the global jihad launched by Zia and Reagan," launched for geopolitical reasons, with no concern for the after-effects.
But Reagan remains unstained. Chomsky quotes the great American historian Francis Jennings, who noted of early twentieth century leaders: "In history, the man in the ruffled shirt and gold-coated waistcoat levitates above the blood he has ordered to be spilled by dirty-handed underlings." Instead, Chomsky says, history is too often ruled by the maxim spelled out by Thucydidies: "The strong do as they wish, while the poor suffer as they must."
But it doesn't have to be this way. This is a book weaved through with hope and awe at all the people who have managed to slip beyond imperial control and establish real democracy. Chomsky's strongest model -- and the world's -- is Bolivia's experiment with radical democracy. After thirty years of having neoliberalism forced on them by the West, including the cost of water being pushed beyond their grasp, the Bolivian people rose up and elected the first indigenous leader since the European conquests. Since then, it has had the fastest fall in poverty and the most rapid growth in Latin America.
In his cool blizzard of facts and academic sources, the hot air of his critics seems to melt away. To pluck one example, the leftist-turned-neoconservative journalist Nick Cohen has accused Chomsky of being soft on jihadism (as well as of "not being bothered" by "the crimes of Adolf Hitler"). Yet Chomsky points out that an analysis of official data for the government-supported RAND corporation found that the invasion of Iraq caused a "seven-fold increase in jihadism." If you really hate jihadism, you have to figure out what actually reduces it, rather than engage in bluster. Chomsky supported the path that produces fewer jihadis, while Cohen supports the path that produces more.
Chomsky presents all this plainly, and with -- and this is often overlooked -- a sly sense of humour. Describing the growing rebellions in Afghanistan, he notes: "People have the odd characteristic of objecting to the slaughter of family members and friends." He picks through the Wonderland of U.S. propaganda-speak for the most comical examples. To pluck just one: Kennedy courtier Hans Morgenthau said that the "reality" of U.S. foreign policy lies in its "transcendent ideals", and when the historical record suggested the U.S. had fallen short of it, this was merely "an abuse of reality." He sternly warned that we must not "confound the abuse of reality with reality itself."
When I was shamefully wrong about the war in Iraq myself, it was an email exchange with Noam Chomsky -- where he laid bare the best evidence about what was motivating the U.S. government -- that helped me figure out where I had gone so badly wrong. Hopes and Prospects is a book that can do the same for many more people - a treasure-trove of truths that shouldn't be left buried in our over-flowing sandpit of propaganda and lies.

