A young Christopher Hitchens outside the offices of the New Statesman, where he was hired in 1973. Photograph: Rex Features.
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Christopher Hitchens, 1949-2011

A tribute to a brilliant essayist, orator and wit.

"I have decided to take whatever my disease can throw at me," wrote Christoper Hitchens in his most recent essay. But today, after 18 months, his duel with cancer ended. He was 62 years old. The world has lost one of its most outstanding and prolific journalists and a wonderful polemicist, orator and bon vivant. Hitchens could write brilliantly about an extraordinarily wide range of subjects and people: the death penalty, religion, Leon Trotsky, Evelyn Waugh, the British monarchy, the Israeli-Palestinian conflict, George Orwell, Saul Bellow, the Elgin Marbles, North Korea, the Balkans, Henry Kissinger, Thomas Paine and Philip Larkin.

In recent months we had sad cause to add cancer to that list. The series of essays Hitchens wrote for Vanity Fair about his illness stands as the finest writing on the subject since John Diamond's C: Because Cowards Get Cancer Too. Without a hint of self-pity or sentimentality, Hitchens confronted his fate with pure reason and logic. "To the dumb question, 'Why me?'", he wrote, "the cosmos barely bothers to return the reply: 'Why not?' " Nor did his humour desert him. To a Christian who insisted that God had given him "throat" cancer in order to punish the "one part of his body he used for blasphemy", he replied: "My so-far uncancerous throat . . . is not at all the only organ with which I have blasphemed." And to those who insultingly suggested that he should embrace religion, Hitchens's flawless riposte was: "Suppose there were groups of secularists at hospitals who went round the terminally ill and urged them to adopt atheism: 'Don't be a mug all your life. Make your last days the best ones.' People might suppose this was in poor taste."

I interviewed Hitchens for the New Statesman in May 2010 during the UK leg of his Hitch-22 tour. Over several glasses of Pinot Noir and Johnnie Walker Black Label, we discussed, among other things, religion, neoconservatism ("I'm not a conservative of any kind"), his time at the NS, Zimbabwe (his biggest regret was that he hadn't been tougher on Mugabe in the 1980s) and the euro. Hitch was on form that day, calmly eviscerating the likes of David Cameron ("He seems content-free to me. Never had a job, except in PR, and it shows. People ask, 'What do you think of him?' and my answer is: 'He doesn't make me think' ") and Sarah Palin ("I think she's a completely straightforward cynic and opportunist and I think she's cashing out . . . She's made a fortune and she'll make another. But she's not actually going to do the hard work of trying to lead or build a movement"). Two days later he returned to the US. A month later he was diagnosed with cancer. He never returned to the country of his birth.

It was the United States, where Hitchens lived for more than 30 years, that he came to call home. By the end of the 1970s, he had tired of Britain ("Weimar without the sex" was his verdict on the Callaghan era) and longed for the bigger stage of America, moving first to New York and later to Washington, DC. He struggled at first, eking out a living writing a biweekly column for the Nation magazine and relying on the kindness of friends such as the radical journalist Andrew Cockburn. But the move paid off when he landed a column for Vanity Fair in 1992, greatly increasing his income and his readership. It was also there that he met his adoring second wife, Carol Blue, who once remarked of him: "I was just glad such a person existed in the world." He is survived by Blue, their daughter, Antonia, and two children from his previous marriage to Eleni Meleagrou, Alexander and Sophia.

"I believe in America. America has made my fortune," declares Bonasera in the opening line of The Godfather. Hitchens's allegiance to the US (he became a citizen in 2007) had more to do with its secular constitution and its commitment to free expression but America did make his fortune. By the end of his life, with regular slots in Vanity Fair, the Atlantic and Slate, several bestselling books and a lucrative place on the lecture circuit, Hitchens was earning nearly $1m a year.

His extraordinary output – 12 books, five collections of essays – was suggestive of a solitary, bookish man, rather than a compulsively social hedonist. In resolving this apparent paradox, Hitchens was aided by two attributes in particular: his prodigious memory (as Ian McEwan once remarked: "It all seems instantly, neurologically available: everything he's ever read, everyone he's ever met, every story he's ever heard") and his ability to write at a speed that most people talk. The late, great Anthony Howard, who as New Statesman editor hired Hitchens in 1973, told me last year: "He was a very quick writer . . . Hitch could produce a front-page leader, which would take me a couple of hours, in half an hour."

In his final interview, with Richard Dawkins (published in the current issue of the NS), Hitchens reflected, with touching modesty, on his status as an essayist. After Dawkins told him that he could think of no one since Aldous Huxley who was so well read, he replied:

It may strike some people as being broad but it's possibly at the cost of being a bit shallow. I became a journalist because one didn't have to specialise. I remember once going to an evening with Umberto Eco talking to Susan Sontag and the definition of the word "polymath" came up. Eco said it was his ambition to be a polymath; Sontag challenged him and said the definition of a polymath is someone who's interested in everything and nothing else. I was encouraged in my training to read widely – to flit and sip, as Bertie [Wooster] puts it – and I think I've got good memory retention. I retain what's interesting to me, but I don't have a lot of strategic depth.

A lot of reviewers have said, to the point of embarrassing me, that I'm in the class of Edmund Wilson or even George Orwell. It really does remind me that I'm not. But it's something to at least have had the comparison made – it's better than I expected when I started.

Hitchens's modesty was unwarranted. In this age of high specialisation, we will not see his like again.

It was God Is Not Great, his anti-theist polemic, that sent him supernova. While Dawkins's atheism is rooted in science, Hitchens's was rooted in morality. He was repelled by the notion that people do good only because they fear punishment and hope for reward. The question he often posed about believers was: "Why do they wish this was true?" Heaven, for Hitchens, was a place of "endless praise and adoration, limitless abnegation and abjection of self; a celestial North Korea".

It is Hitch the controversialist that many will remember. The man who said of Jerry Falwell, "If you gave Falwell an enema he could be buried in a matchbox," and of Ronald Reagan: "Reagan is doing to the country what he can no longer do to his wife." But as John Gray wrote in his NS review of Hitchens's fifth and final collection of essays, Arguably, he was no mere provocateur or contrarian. Throughout his career, Hitchens retained a commitment to the Enlightenment values of reason, secularism and pluralism. His targets – Mother Teresa, Bill Clinton, Henry Kissinger, God – were chosen not at random, but rather because they had offended one or more of these principles.

Over the past decade, many on the left came to regard Hitchens not as a friend but as an enemy. Tariq Ali, a fellow soixante-huitard, wrote: "On 11 September 2001, a small group of terrorists crashed the planes they had hijacked into the Twin Towers of New York. Among the casualties, although unreported that week, was a middle-aged Nation columnist called Christopher Hitchens. He was never seen again . . . The vile replica currently on offer is a double." And yet, contrary to reports, Hitchens did not perform a crude midlife swerve from left to right (also known as doing a "Paul Johnson"). Unlike Johnson, a former New Statesman editor who became a reactionary conservative ("Pinochet remains a hero to me," he wrote in 2007), Hitchens did not give up everything he believed in. He maintained, for instance, that the US invasion of Vietnam was a war crime, that Kissinger belonged behind bars (see his 2001 book The Trial of Henry Kissinger for a full account of the former US secretary of state's "one-man rolling crime wave") and that the Israeli occupation of Palestine was a moral and political scandal.

His support for the "war on terror" was premised not on conservative notions but on liberal principles. As he wrote in a column for the Nation published on 20 September 2001, "What they [the 9/11 attackers] abominate about 'the west', to put it in a phrase, is not what western liberals don't like and can't defend about their own system, but what they do like about it and must defend: its emancipated women, its scientific inquiry, its separation of religion from the state."

He was wrong, badly wrong about Iraq, but for the best of reasons. His support for the invasion arose out of a long-standing solidarity with the country's Kurds (see his long, 1992 piece for National Geographic, "The Struggle of the Kurds", collected in Love, Poverty and War) and his belief that even war was preferable to the survival of Saddam Hussein's totalitarian regime ("a concentration camp above ground and a mass grave beneath it"). It was not an attempt to ingratiate himself with the neoconservatives, whom Hitchens had fought and continued to fight with on issues from gay rights to the death penalty to Israel. But he was too casual in dismissing the civilian casualties (estimated at anything between 100,000 and a million) that resulted directly or indirectly from the invasion of the Iraq and, as he later conceded, too optimistic about the Bush administration's ability to stabilise the country. In his boisterous advocacy of the war there was more than a hint of the Marxist belief in the necessity of violence in order for history to progress. As Lenin once grimly phrased it: "You can't make an omelette without breaking eggs."

Yet those who stopped reading Hitchens after 11 September 2001 are all the poorer for it. They have not read his haunting account of the US's deadly legacy in Vietnam: "Some of the victims of Agent Orange haven't even been born yet, and if that reflection doesn't shake you, then my words have been feeble and not even the photographs will do." Or his unrivalled indictment of capital punishment: "Once you institute the penalty, the bureaucratic machinery of death develops its own logic, and the system can be relied on to spare the beast-man, say, on a technicality of insanity, while executing the hapless Texan indigent who wasn't able to find a conscientious attorney." Or his unique denunciation of waterboarding: "I apply the Abraham Lincoln test for moral casuistry: 'If slavery is not wrong, nothing is wrong.' Well, then, if waterboarding does not constitute torture, then there is no such thing as torture."

The tragedy of Hitchens's illness was that it came at a time when he was enjoying a larger audience than ever. Of his tight circle of friends – Martin Amis, James Fenton, Ian McEwan, Salman Rushdie – he was the last to gain international renown, yet he is now read more widely than any of them.

In his later years, Hitchens was fond of quoting his late mother's assertion that "The one unforgivable sin is to be boring". Today, as I realise I will never hear that resonant baritone again, that Hitchens's mighty pen is still, I feel certain in saying that the world has become a more boring place.

George Eaton is political 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?