Anthony Howard: 1934-2010

Former <em>New Statesman</em> editor dies at the age of 76.

We learned with immense sadness this evening of the death of the former editor of the New Statesman Anthony Howard.

Tony, who died today after a short illness, edited the NS between 1972 and 1978, one of the most fertile periods in the magazine's history, during which he helped to launch the careers of several of this country's leading writers, Martin Amis and Christopher Hitchens notable among them. He went on to become deputy editor of the Observer and was also a regular contributor to the BBC's Newsnight and Panorama programmes.

Tony continued to work as a freelance commentator and book reviewer, not least for the NS, almost until the end of his life. I had the privilege of working with him after joining the NS as culture editor in 2009. His book reviews – mostly of political memoirs and biographies, often heavy with anecdote and frequently enlivened, though never compromised, by personal acquaintance with either the author or the subject – would arrive, always ahead of the deadline and always within the word limit I'd set, not by email nor even by fax, but by letter, a familiarly spidery scrawl on the envelope alerting me to the presence of the precious cargo contained within.

Tony's last contribution to the magazine was not a review, however, but a selection of books of the year, which he dictated to me down the phone. His choices were entirely characteristic – two political biographies and a journalist's memoir:

There were two fine political biographies published this year: Roy Hattersley's David Lloyd George (Little, Brown, £25) and D R Thorpe's Supermac (Chatto & Windus, £25). Equally engaging, if at a slightly more flippant level, is Simon Hoggart's A Long Lunch: My Stories and I'm Sticking to Them (John Murray, £20). Described by its author as "in no way a life of me", it is still the best journalistic memoir since the late Alan Watkins's A Short Walk Down Fleet Street of a decade ago.

In the current issue of the NS, the editor, Jason Cowley, who was unaware of Tony's illness when he was writing, devotes one of the items in his First Thoughts column to this recollection of a communication from his venerable predecessor:

When I became editor of the New Statesman in October 2008, I received a handwritten letter from Anthony Howard, who was editor of this "paper", as he prefers to call it, from 1972 to 1978. Being editor of the NS would be "hard", he said, but I had to stick it out until the centenary in 2013. To me, that seemed a long way off and not something I should think about. But this is my third Christmas double issue as editor. In a few weeks, as we celebrate the arrival of another year, the centenary will not seem that far away at all. Tony: what shall we do?

Tony, of course, would have known exactly what we should do. We shall miss him.

Jason Cowley adds:

I first met Tony Howard when I joined the Times in the mid-1990s – I was a staff writer and he was obituaries editor. But of course I already knew him through his journalism and work for the BBC. Tony was an inspiration: an old-style, scholarly, gentleman journalist, who had a wonderfully encyclopaedic knowledge of British politics. Above all, he was a good and generous man, and was especially supportive of younger journalists. I feel profoundly sad that he will not be here to celebrate the centenary of the New Statesman, which he edited with such distinction from 1972-78. Tony: we'll miss you so much.

UPDATE: Obituaries for Tony Howard continue to appear in all the major news outlets, most of them eulogies for, as Jason puts it, a gentleman-journalist of the old school. Over at Our Kingdom, however, Anthony Barnett strikes a somewhat discordant note.

Ian Hargreaves, New Statesman editor from 1996-1998, writes:

Tony Howard was the ultimate political insider – in Peter Kellner's words, "the people's spy inside the corridors of power". But Tony was always more fascinated with the corridors of politics than the think tanks of policy or the worlds beyond both. His confident eloquence sprang from his learning and love of politicians and of the arts of political rhetoric; his opinions were always crafted to ricochet around a circle of people known to him by name.

As a radio broadcaster, I, like hundreds of others, always knew that I could go to Tony for a well-judged insight or a commonplace, one more adroitly worded than the competition. In my time as successor to him as editor of the New Statesman, he was part of the huddle of opinion which could affect the local weather. He was fond of conspiracy – something which, for Tony, was anything but a spectator sport.

It is right that his finest legacy is the Crossman Diaries. The positioning of Crossman at the then unfulfilled centre of Labour politics and the fact that his diaries were the WikiLeaks of their day speak to Tony's values, to his eye for a drama and to the courage it takes to exploit one. Don't be fooled by your memories of those silken, jowly tones: Tony Howard was a fighter and a mischief-maker – a journalist.

Peter Wilby, editor of the New Statesman between 1998 and 2005, writes:

When I left the Observer in 1975, aged 30, I heard that the New Statesman was looking for an education correspondent. I rang Tony Howard, whom I had not then met. He came straight to the point. "Are you leaving the Observer or is the Observer leaving you?" he demanded. When I replied that the former was the case, he asked for cuttings. After perusing these and making "inquiries", he expressed the broad opinion that I would be "OK". But, he added, he had seen only rare signs of the flashy, reader-gripping phrase. On this, he insisted, I must up my game.

After this rigorous examination (more rigorous than I experienced for some full-time staff jobs), I expected at least a retainer. But, no, he would pay me £40 for each 1,000-word piece (not a princely sum, even in those days) or £60 for 2,000 words. If nothing was published, I would receive nothing. I could expect to get in "the paper" roughly once every two or three weeks, and he "hoped" I would attend weekly editorial conferences. He recognised that I might need to supplement this uncertain income (about five times over, on my conservative estimate) but, if I wrote regularly about education for national dailies or Sundays, our "arrangement" would be "less attractive" to him. On this unpromising basis, our association began and, despite the lack of any increased payments even in a period of rampant inflation, it continued for two happy years.

Tony regarded writing for the NS as an honour and imposed the most exacting standards. His judgements were speedy and precise and could rarely be altered. He could convey, in just a few words, exactly what he wanted, a talent more rare than it ought to be among editors. Over two years, he spiked, I think, one piece and made me rewrite two others. Otherwise, I apparently met his standards, always receiving a congratulatory phone call or written note. He gave me something priceless, which I had previously lacked: a belief that I could not just hack a career in journalism but could, in time, reach its highest levels.

I left the NS to join the Sunday Times, a newspaper of which he disapproved. But we parted on good terms and my career thereafter was punctuated by occasional messages of encouragement and praise. When I became NS editor in 1998, he said that, after an interval of 20 years and six editors since his own departure, "the apostolic succession" had been restored. By that, he meant (I think) that he could count on me to uphold the values and standards of writing that he established during his own editorship, and which were only erratically continued by his successors. Thereafter, his support, though he sometimes offered private criticism, was warm and consistent, through good times and bad.

Jonathan Derbyshire is Managing Editor of Prospect. He was formerly Culture Editor of the New Statesman.

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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?