Gilbey on Film: election special round two

Our critic's verdict on the (other) party political broadcasts.

Another week, another round of party election broadcasts. Presumably there are some people who still can't get enough of the sound of David Cameron saying the word "change." For that section of the public it was good news this week, as the Conservatives issued yet another five-minute campaign film featuring nothing but Dave. Dave in front of Parliament, Dave in messianic black-and-white stills that suggest Anton Corbijn shooting Bono on the Rattle and Hum tour.

My favourite bit occurs between 4:22 and 4:25, where Dave appears to have recently supped from the bottle marked "Drink Me". Either that or he is delivering his address in front of the world's tallest man.

This latest election broadcast is standard Davesville stuff, delivered with shirtsleeves rolled up to suggest a readiness to muck in. (An altogether more illuminating Cameron speech can be found here.) But it's the pushy, badgering tone which really curdles the soul: if that isn't the voice of someone setting out in painstaking terms precisely why you should let him take you in the shrubbery after the Freshers' Ball and show you his Big Society, then I'm George Osborne. (Note to Conservative Party members: George Osborne is your Chancellor.)

Party monster

Elsewhere, the BNP landed a prime-time BBC1 slot for its own mini-movie. It kicks off with the chilling sound of an air-raid siren, and stock footage from wartime Britain. Unfortunately it then switches to Nick Griffin sitting at a desk. Behind him we see a framed picture of Churchill and several shelves of leather-bound volumes, the content of which we can only guess at. (Chinua Achebe first editions? The collected TV Quick 1991-2009?)

Poor Nick spends all his screen time trying and failing to control his bizarrely ambiguous hand gestures as he tells us of his four gorgeous children. I counted ten different examples of involuntary movement in the first minute alone; you'd swear he was trying to describe a Henry Moore with his hands.

This restlessness goes beyond merely emphasising Nick's naturally sleazy demeanour, which is already a cross between Donald Plesence as Blofeld and a second-hand car salesman trying to flog you a Panzer tank. Rather, it reminded me of the scene in Total Recall when Arnold Schwarzenegger has to pass through Martian passport control disguised as a woman, only for his cover to start malfunctioning just as things are going his way. If the BNP leader is undergoing a similar deterioration, it begs the terrible question: what is on the inside of Nick Griffin? And can it be removed with normal household detergent?

From Nick kicking back in his study, we move to a photo-montage of BNP pet hates (mosques, hijabs, an East London street sign in both English and -- say it isn't so! -- Urdu) accompanied by the standard inflammatory fabrications ("Foreigners jump the queue for housing...") and off-the-wall connections ("Politicians lavish billions on asylum-seekers and rich bankers"). There is nothing funny about the BNP's policies and ideology, so it's oddly liberating to see their amateurism paraded so openly in this way.

The broadcast gives off the air of having been assembled around old Amstrads in the back-rooms of dubious hostelries, with someone's brother keeping a look-out; the atmosphere is less Triumph of the Will and more clapped-out Triumph Herald. Sure, they're racists and Holocaust deniers, but do they have to be such cheapskates?

The "talking heads" section is a good example of the shoddiness. There's a young woman pictured outside Café Rouge -- a damning indictment of the grubby French nation's attempt to flood our high streets with mid-priced Poulet Bretonne. "It's not politically correct," she says, "but I'm proud to be British, which is why I'm voting British National Party." The trick with those cue-cards, of course, is not to let your eyes move from left to right as you read from them.

But Ms Proud-to-be-British is practically Fiona Shaw as Hedda Gabler compared to the couple who appear next. "It was us pensioners that built this country..." says a disturbed-looking elderly man. Oh, do try not to appear as though someone is holding a gun to your head as you speak, there's a good chap. The silver-haired woman on his right looks even more terrified. Her hair was blonde before the camera started rolling, you know.

After a killer line from Rajinder Singh -- "I know the BNP very well and I admire them; they are only doing what is natural" -- we are treated to a cameo from Richard Barnbrook, who emphasises important words with little involuntary thrusts of his elbow, as though his hands, which we can't see, are kneading dough out of frame. Then Blofeld pops up to invite us to vote for the BNP to get our own back on politicians. Hmm, revenge or rationality? It's a toughie.

What swings it for me is the image on which the broadcast ends -- a freeze-frame of a supposedly happy BNP-supporting family. Look at the still below, where it appears the youngest child is gripping his sister's arm with one hideously enlarged hand. Is this what we want? Mutant children? You decide. I'm just disappointed that Nick reneged on his promise to eat Marmite on screen.

bnp 

Cliff hanger

The BNP's pitiful effort resembles Avatar next to the English Democrats' campaign film. Someone who resembles Ben Fogle appears in a couple of obvious locations -- outside Parliament, or within sight of the white cliffs of Dover -- to talk us flatly through various unconvincing reasons why England should be completely autonomous. Hands up who resisted the temptation during the cliff-top scenes to call out to our presenter: "Back a bit, back a bit"? Me neither.)

The capper comes when, realising that he hasn't persuaded us, he throws in a bribe: "Oh -- and there's one other proposal I'm sure you'll all support. [I love that mock-spontaneous "Oh".] An extra bank holiday." You know -- for St George's Day. Buying votes with bank holidays, eh? Well, it's original. Can I swap mine for a toaster?

 

An inconvenient truth

After the crudity of the Conservatives, BNP and English Democrats, the soothing visual simplicity of the Green Party feels refreshing and comparatively sophisticated. No hatchet-faced party leaders, no flannel-spouting presenters with dishcloth charisma. Just three rectangular coloured blocks -- red, blue and yellow -- which are joined by a jaunty, rolling green circle representing the only party "who can really make a change."

My favourite colour is green, so I'm already hooked. And this is a winning aesthetic approach. The green circle morphs into a cross (representing healthcare), a radiator (during the bit about caring for the elderly), a safe's combination lock (behind which is stashed money that would otherwise go on bankers' bonuses) and a thought-bubble (the only misjudgement here: it looks more like a storm-cloud made of spinach).

So on top of all the wonderful things they're planning to do, the Green Party proves it is also flexible. Pliable. Easily moulded. Gets in the carpet. Turns stale if left out overnight and has to be thrown away. Oh dear. Maybe this isn't so simple after all.

 

Ryan Gilbey is the New Statesman's film critic. He blogs for Cultural Capital every Tuesday

Ryan Gilbey is the New Statesman's film critic. He is also the author of It Don't Worry Me (Faber), about 1970s US cinema, and a study of Groundhog Day in the "Modern Classics" series (BFI Publishing). He was named reviewer of the year in the 2007 Press Gazette awards.

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We're racing towards another private debt crisis - so why did no one see it coming?

The Office for Budget Responsibility failed to foresee the rise in household debt. 

This is a call for a public inquiry on the current situation regarding private debt.

For almost a decade now, since 2007, we have been living a lie. And that lie is preparing to wreak havoc on our economy. If we do not create some kind of impartial forum to discuss what is actually happening, the results might well prove disastrous. 

The lie I am referring to is the idea that the financial crisis of 2008, and subsequent “Great Recession,” were caused by profligate government spending and subsequent public debt. The exact opposite is in fact the case. The crash happened because of dangerously high levels of private debt (a mortgage crisis specifically). And - this is the part we are not supposed to talk about—there is an inverse relation between public and private debt levels.

If the public sector reduces its debt, overall private sector debt goes up. That's what happened in the years leading up to 2008. Now austerity is making it happening again. And if we don't do something about it, the results will, inevitably, be another catastrophe.

The winners and losers of debt

These graphs show the relationship between public and private debt. They are both forecasts from the Office for Budget Responsibility, produced in 2015 and 2017. 

This is what the OBR was projecting what would happen around now back in 2015:

This year the OBR completely changed its forecast. This is how it now projects things are likely to turn out:

First, notice how both diagrams are symmetrical. What happens on top (that part of the economy that is in surplus) precisely mirrors what happens in the bottom (that part of the economy that is in deficit). This is called an “accounting identity.”

As in any ledger sheet, credits and debits have to match. The easiest way to understand this is to imagine there are just two actors, government, and the private sector. If the government borrows £100, and spends it, then the government has a debt of £100. But by spending, it has injected £100 more pounds into the private economy. In other words, -£100 for the government, +£100 for everyone else in the diagram. 

Similarly, if the government taxes someone for £100 , then the government is £100 richer but there’s £100 subtracted from the private economy (+£100 for government, -£100 for everybody else on the diagram).

So what implications does this kind of bookkeeping have for the overall economy? It means that if the government goes into surplus, then everyone else has to go into debt.

We tend to think of money as if it is a bunch of poker chips already lying around, but that’s not how it really works. Money has to be created. And money is created when banks make loans. Either the government borrows money and injects it into the economy, or private citizens borrow money from banks. Those banks don’t take the money from people’s savings or anywhere else, they just make it up. Anyone can write an IOU. But only banks are allowed to issue IOUs that the government will accept in payment for taxes. (In other words, there actually is a magic money tree. But only banks are allowed to use it.)

There are other factors. The UK has a huge trade deficit (blue), and that means the government (yellow) also has to run a deficit (print money, or more accurately, get banks to do it) to inject into the economy to pay for all those Chinese trainers, American iPads, and German cars. The total amount of money can also fluctuate. But the real point here is, the less the government is in debt, the more everyone else must be. Austerity measures will necessarily lead to rising levels of private debt. And this is exactly what has happened.

Now, if this seems to have very little to do with the way politicians talk about such matters, there's a simple reason: most politicians don’t actually know any of this. A recent survey showed 90 per cent of MPs don't even understand where money comes from (they think it's issued by the Royal Mint). In reality, debt is money. If no one owed anyone anything at all there would be no money and the economy would grind to a halt.

But of course debt has to be owed to someone. These charts show who owes what to whom.

The crisis in private debt

Bearing all this in mind, let's look at those diagrams again - keeping our eye particularly on the dark blue that represents household debt. In the first, 2015 version, the OBR duly noted that there was a substantial build-up of household debt in the years leading up to the crash of 2008. This is significant because it was the first time in British history that total household debts were higher than total household savings, and therefore the household sector itself was in deficit territory. (Corporations, at the same time, were raking in enormous profits.) But it also predicted this wouldn't happen again.

True, the OBR observed, austerity and the reduction of government deficits meant private debt levels would have to go up. However, the OBR economists insisted this wouldn't be a problem because the burden would fall not on households but on corporations. Business-friendly Tory policies would, they insisted, inspire a boom in corporate expansion, which would mean frenzied corporate borrowing (that huge red bulge below the line in the first diagram, which was supposed to eventually replace government deficits entirely). Ordinary households would have little or nothing to worry about.

This was total fantasy. No such frenzied boom took place.

In the second diagram, two years later, the OBR is forced to acknowledge this. Corporations are just raking in the profits and sitting on them. The household sector, on the other hand, is a rolling catastrophe. Austerity has meant falling wages, less government spending on social services (or anything else), and higher de facto taxes. This puts the squeeze on household budgets and people are forced to borrow. As a result, not only are households in overall deficit for the second time in British history, the situation is actually worse than it was in the years leading up to 2008.

And remember: it was a mortgage crisis that set off the 2008 crash, which almost destroyed the world economy and plunged millions into penury. Not a crisis in public debt. A crisis in private debt.

An inquiry

In 2015, around the time the original OBR predictions came out, I wrote an essay in the Guardian predicting that austerity and budget-balancing would create a disastrous crisis in private debt. Now it's so clearly, unmistakably, happening that even the OBR cannot deny it.

I believe the time has come for there be a public investigation - a formal public inquiry, in fact - into how this could be allowed to happen. After the 2008 crash, at least the economists in Treasury and the Bank of England could plausibly claim they hadn't completely understood the relation between private debt and financial instability. Now they simply have no excuse.

What on earth is an institution called the “Office for Budget Responsibility” credulously imagining corporate borrowing binges in order to suggest the government will balance the budget to no ill effects? How responsible is that? Even the second chart is extremely odd. Up to 2017, the top and bottom of the diagram are exact mirrors of one another, as they ought to be. However, in the projected future after 2017, the section below the line is much smaller than the section above, apparently seriously understating the amount both of future government, and future private, debt. In other words, the numbers don't add up.

The OBR told the New Statesman ​that it was not aware of any errors in its 2015 forecast for corporate sector net lending, and that the forecast was based on the available data. It said the forecast for business investment has been revised down because of the uncertainty created by Brexit. 

Still, if the “Office of Budget Responsibility” was true to its name, it should be sounding off the alarm bells right about now. So far all we've got is one mention of private debt and a mild warning about the rise of personal debt from the Bank of England, which did not however connect the problem to austerity, and one fairly strong statement from a maverick columnist in the Daily Mail. Otherwise, silence. 

The only plausible explanation is that institutions like the Treasury, OBR, and to a degree as well the Bank of England can't, by definition, warn against the dangers of austerity, however alarming the situation, because they have been set up the way they have in order to justify austerity. It's important to emphasise that most professional economists have never supported Conservative policies in this regard. The policy was adopted because it was convenient to politicians; institutions were set up in order to support it; economists were hired in order to come up with arguments for austerity, rather than to judge whether it would be a good idea. At present, this situation has led us to the brink of disaster.

The last time there was a financial crash, the Queen famously asked: why was no one able to foresee this? We now have the tools. Perhaps the most important task for a public inquiry will be to finally ask: what is the real purpose of the institutions that are supposed to foresee such matters, to what degree have they been politicised, and what would it take to turn them back into institutions that can at least inform us if we're staring into the lights of an oncoming train?