Rick Santorum's baby - a follow-up from Mehdi Hasan

Damian Thompson and others on the right are trying to demonise me for reporting a story that Santorum's baby died at childbirth.

The reaction to my recent blogpost, "10 things you didn't know about Rick Santorum...", has prompted me to write this follow-up. In my original post, I covered some of Santorum's outrageous views (he wants to bomb Iran and dismisses global warming as "junk science"), as well as semi-amusing bits of trivia: for example, he is friends with U2's Bono and he once defended the World Wrestling Federation in court.

I also included, without any supporting comment, criticism or rebuke:

8) When his baby Gabriel died at childbirth, Santorum and his wife spent the night in a hospital bed with the body and then took it home where, joined by their other children, they prayed over it, cuddled with it and welcomed the baby into the family.

We live in an era of faux-outrage and Twitterstorms so, predictably, I've since been attacked by a coalition of indignant pundits and pontificators who couldn't be bothered to read what I actually wrote: from Telegraph columnists to left-wing bloggers to right-wing Republicans across the pond. The levels of outrage (outrage!) are on the rise. Anyone would think that (a) I had criticised Santorum for the way in which he handled his son's tragic death, or (b) that I was the first to introduce this story into the public domain (perhaps having rifled through his bins or having hacked into his personal email account). Neither inference is true.

For the record, Karen Santorum, Rick's wife, chronicled both the pregnancy and the wider US partial-birth abortion debate in her 1998 book, Letters to Gabriel: The True Story of Gabriel Michael Santorum. The book takes the form of letters Karen wrote to her unborn son, including the one where she writes:

When the partial-abortion vote comes to the floor of the U.S. Senate for the third time, your daddy needs to proclaim God's message for life with even more strength and devotion to the cause.

In May 2005, in a New York Times magazine profile of Santorum, entitled "The Believer", Michael Sokolove wrote:

What happened after the death is a kind of snapshot of a cultural divide. Some would find it discomforting, strange, even ghoulish -- others brave and deeply spiritual. Rick and Karen Santorum would not let the morgue take the corpse of their newborn; they slept that night in the hospital with their lifeless baby between them. The next day, they took him home. ''Your siblings could not have been more excited about you!" Karen writes in the book, which takes the form of letters to Gabriel, mostly while he is in utero.

In October 2005, in a Philadelphia City Paper profile of Santorum, headlined "The Path of the Righteous", Mike Newall wrote:

Gabriel Michael Santorum lived for only two hours. The Santorums spent the night in the hospital bed with their lifeless baby lying between them. The next morning they brought the palm-sized corpse to Karen's parent's house. They had their other children pose for pictures and cuddle with Gabriel. They sang lullabies and held a private mass.

On 2 January 2012, New York Times columnist, card-carrying conservative and Santorum sympathiser, David Brooks, wrote:

Santorum does not have a secular worldview. This is not just a matter of going to church and home-schooling his children. When his baby Gabriel died at childbirth, he and his wife, a neonatal nurse, spent the night in a hospital bed with the body and then took it home -- praying over it and welcoming it, with their other kids, into the family. This story tends to be deeply creepy to many secular people but inspiring to many of the more devout.

On 6 January 2012, ABC News published a long, online feature, on the health section of its website, headlined:

Experts: Rick Santorum Grief Is Typical, But Taking Body Home, Unusual

Yet, I'm now being pilloried and castigated for daring to mention this fact (and, that too, in passing!), which (1) has been in the public domain for more than a decade, (2) was introduced into the public domain by Santorum's wife in book form, (3) may have influenced Santorum's votes in the US Senate, and (4) has been discussed, time and again, not just in newspaper profiles of Santorum, but in recent articles by supportive, centre-right journalists (David Brooks) and neutral TV news organisations (ABC News). The whole thing is bizarre; a classic, manufactured, online controversy. As I said at the start, I went out of my way not to criticize Santorum for the way he behaved after this horrible personal tragedy in his life (despite, incidentally, others having done so); I just reported it. And I did so, you might note, in a blogpost called: "10 things you didn't know about Rick Santorum..." - not "10 bad/evil/crazy/right-wing things you didn't know about Rick Santorum"!

One last, semi-related point: oddball Telegraph blogger and columnist Damian Thompson used his piece in Saturday's paper to accuse me of "exploiting the death of [Santorum's] premature son, Gabriel, to score a political point" and of being "weird and sinister". The words pot, kettle and black come to mind. He deliberately mispresented my blogpost to score his own crude, political point against "Lefties". Oh, and it's a bit rich for Thompson, of all people, to accuse others of publishing "weird and sinister" blogposts.

How about this, from Thompson, entitled, "The Calais 'jungle' and the Islamic settlement of Britain":

How interesting that French police waited until the end of Ramadan before forcibly dismantling the Calais "jungle". That tells us something we really need to remember about a huge proportion of the illegal immigrants seeking to enter Britain: that they are pious Muslims.

Pious Muslims! Outrageous! How about this blogpost from Thompson, entitled:

Indulgence of Islam is harming society

(Btw, can you imagine a headline which read "Indulgence of Judaism is harming society" or "Indulgence of black people is harming society"?)

And in a blogpost on the supposed popularity of the BNP's odious views, Thompson wrote:

The Tories have not made immigration and Islam central to their policies. It's too early to do so, if they want to sanitise their image among middle-class voters. Also, they lack the insight or the courage to recognise that the two issues will soon be indivisible. The tragedy for this country is that it is now, not in ten years' time when our social fabric has been torn to pieces, that voters need a political party to do so.

On second thoughts, "weird and sinister" doesn't do justice to Thompson's persistent Islam-baiting.

 

Mehdi Hasan is a contributing writer for the New Statesman and the co-author of Ed: The Milibands and the Making of a Labour Leader. He was the New Statesman's senior editor (politics) from 2009-12.

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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?