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A debt spiral we could have avoided

Economists simply would not accept that their model could fail

Who, five years ago, would have predicted the part-nationalisation of private banks, the UK Treasury considering abandoning its fetish of “inflation targeting”, and prudent Gordon Brown breaching the EU cap on government spending?

Well, some economists did, and five years ago the New Statesman ran a piece about their concerns.

In September 2003, I edited a book for the New Economics Foundation called The Real World Economic Outlook. It warned of "a collapse in the credit system of the rich world, led by the US, leading to soaring personal and corporate bankruptcies . . . The risks of a debt-deflationary spiral in the rich world are significant."

In a New Statesman article based on the book, I wrote: "If unemployment were to rise here, that could lead to a downward spiral in . . . house prices, making it harder to pay off debts [and] a debt-deflationary spiral.

"This threat is very real. But few economists, politicians and consumers appear to understand the nature of the risk." The cover carried a picture of a middle-class dinner party with the caption: "Coming soon. The new poor."

And so it has proved.

For more than two decades, economists operated behind an intellectual blockade where their theories calcified into an ideology that, remarkably, made no provision for systemic economic failure. Instead, powerful "security services" such as monetarists and their successors enforced strict global adherence to a theory of fantastic, always self-adjusting and self-regulating markets that could be relied upon to act efficiently. Mathematical models always allowed a return to equilibrium. There was no theory for systemic economic failure.

Those who still had time for the ideas of Karl Marx, John Maynard Keynes or J K Galbraith were denied professional posts, journal publication and media commentary. As a result, mainstream economists were not analytically equipped for near-systemic global economic failure and thus failed to alert their masters in the banks, central banks and finance ministries. They still do not fully grasp the scale of the crisis (after each of six bailouts, beginning with Bear Stearns, we were promised that the bottom had been reached and recovery was nigh).

The big US and EU bailouts treated the symptoms, not the disease. The disease is debt, and though it takes two to create debt, the bailouts helped only creditors, not debtors; banks, rather than homeowners or companies; the world of finance, rather than workers or industry. There remains a high risk of a systemic meltdown and a severe and prolonged global recession. One reason is that central banks have lost control over real interest rates. Their co-ordinated lowering of rates was followed by an immediate spike in mortgage rates. These are based on the privately set British Bankers' Association's Libor rates. The committee of bankers that raised them was serving the interests of the finance sector - not those of homeowners or companies. But high rates of interest exacerbate the disease of unpayable debt.

The very opposite is needed if we are to avoid ten years or more of sustained economic failure.

Interest rates rose because of risks posed to banks by indebted homeowners and companies, and by plummeting property prices. Bailing out banks, and not private and corporate debtors, means property prices will continue to "deleverage" chaotically and destructively.

Faced with these falling property prices, compounded by extensive fraud and deceit within the financial system, nobody can calculate the scale of outstanding financial liabilities; the probability that liabilities will, or will not be met; or the timing of such payments.

Property prices have been falling in Britain for just one year now, but have fallen for three years in the US. More disturbingly, prices in Japan (as Graham Turner points out in his book The Credit Crunch) are still falling, fully 18 years after Japan's credit bubble burst in 1990.

Only by bailing out homeowners and companies can we arrest chronic property deflation, and restore confidence and solvency to the international capital markets.

Fortunately, there is a simple, cheap policy that would address property deflation. It is based on Keynes's monetary theory, which has always been sidelined, but which he considered even more essential for breathing life into the corpse that was the global economy in the 1930s than his proposed fiscal policies.

Cheap money, ie, very low rates of interest, will help make mortgage and corporate debt repayments affordable. To achieve low rates, we first have to abandon the cross of "inflation targeting" on which the economy is being crucified. Second, the government must remove from the private British Bankers' Association the power to set interbank lending (Libor) rates. If it is to help homeowners and businesses, the government must restore to the Bank of England, accountable to society as a whole (not just the finance sector), the power to set all interest rates.

Only then can we hope to regain financial stability.

Ann Pettifor is a political economist

www.debtonation.org

This article first appeared in the 27 October 2008 issue of the New Statesman, The death of Gucci capitalism

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We need to talk about the online radicalisation of young, white women

Alt-right women are less visible than their tiki torch-carrying male counterparts - but they still exist. 

In November 2016, the writer and TED speaker Siyanda Mohutsiwa tweeted a ground-breaking observation. “When we talk about online radicalisation we always talk about Muslims. But the radicalisation of white men online is at astronomical levels,” she wrote, inspiring a series of mainstream articles on the topic (“We need to talk about the online radicalisation of young, white men,” wrote Abi Wilkinson in The Guardian). It is now commonly accepted that online radicalisation is not limited to the work of Isis, which uses social media to spread propaganda and recruit new members. Young, white men frequently form alt-right and neo-Nazi beliefs online.

But this narrative, too, is missing something. When it comes to online radicalisation into extreme right-wing, white supremacist, or racist views, women are far from immune.

“It’s a really slow process to be brainwashed really,” says Alexandra*, a 22-year-old former-racist who adopted extreme views during the United States presidential election of 2016. In particular, she believed white people to be more intelligent than people of colour. “It definitely felt like being indoctrinated into a cult.”

Alexandra was “indoctrinated” on 4Chan, the imageboard site where openly racist views flourish, especially on boards such as /pol/. It is a common misconception that 4Chan is only used by loser, basement-dwelling men. In actuality, 4Chan’s official figures acknowledge 30 percent of its users are female. More women may frequent 4Chan and /pol/ than it first appears, as many do not announce their gender on the site because of its “Tits or GTFO” culture. Even when women do reveal themselves, they are often believed to be men who are lying for attention.

“There are actually a lot of females on 4chan, they just don't really say. Most of the time it just isn't relevant,” says Alexandra. Her experiences on the site are similar to male users who are radicalised by /pol/’s far-right rhetoric. “They sowed the seeds of doubt with memes,” she laughs apprehensively. “Dumb memes and stuff and jokes…

“[Then] I was shown really bullshit studies that stated that some races were inferior to others like… I know now that that’s bogus science, it was bad statistics, but I never bothered to actually look into the truth myself, I just believed what was told to me.”

To be clear, online alt-right radicalisation still skews majority male (and men make up most of the extreme far-right, though women have always played a role in white supremacist movements). The alt-right frequently recruits from misogynistic forums where they prey on sexually-frustrated males and feed them increasingly extreme beliefs. But Alexandra’s story reveals that more women are part of radical right-wing online spaces than might first be apparent.

“You’d think that it would never happen to you, that you would never hold such horrible views," says Alexandra. "But it just happened really slowly and I didn't even notice it until too late."

***

We are less inclined to talk about radical alt-right and neo-Nazi women because they are less inclined to carry out radical acts. Photographs that emerged from the white nationalist rally in Charlottesville this weekend revealed that it was mostly polo shirt-wearing young, white men picking up tiki torches, shouting racial slurs, and fighting with counter-protestors. The white supremacist and alt-right terror attacks of the last year have also been committed by men, not women. But just because women aren’t as visible doesn’t mean they are not culpable.  

“Even when people are alt-right or sympathisers with Isis, it’s a tiny percentage of people who are willing or eager to die for those reasons and those people typically have significant personal problems and mental health issues, or suicidal motives,” explains Adam Lankford, author of The Myth of Martyrdom: What Really Drives Suicide Bombers, Rampage Shooters, and Other Self-Destructive Killers.

“Both men and women can play a huge role in terms of shaping the radicalised rhetoric that then influences those rare people who commit a crime.”

Prominent alt-right women often publicly admit that their role is more behind-the-scenes. Ayla Stewart runs the blog Wife With a Purpose, where she writes about “white culture” and traditional values. She was scheduled to speak at the Charlottesville “Unite the Right” rally before dropping out due to safety concerns. In a blog post entitled “#Charlottesville May Have Redefined Women’s Roles in the Alt Right”, she writes:

“I’ve decided that the growth of the movement has necessitated that I pick and choose my involvement as a woman more carefully and that I’m more mindful to chose [sic] women’s roles only.”

These roles include public speaking (only when her husband is present), gaining medical skills, and “listening to our men” in order to provide moral support. Stewart declined to be interviewed for this piece.

It is clear, therefore, that alt-right women do not have to carry out violence to be radical or radicalised. In some cases, they are complicit in the violence that does occur. Lankford gives the example of the Camp Chapman attack, committed by a male Jordanian suicide bomber against a CIA base in Afghanistan.

“What the research suggests in that case was the guy who ultimately committed the suicide bombing may have been less radical than his wife,” he explains. “His wife was actually pushing him to be more radical and shaming him for his lack of courage.” 

***

Just because women are less likely to be violent doesn’t mean they are incapable of it.

Angela King is a former neo-Nazi who went to prison for her part in the armed robbery and assault of a Jewish shop owner. She now runs Life After Hate, a non-profit that aims to help former right-wing extremists. While part of a skinhead gang, it was her job to recruit other women to the cause.

“I was well known for the violence I was willing to inflict on others… often times the men would come up to me and say we don’t want to physically hurt a woman so can you take care of this,” King explains. “When I brought other women in I looked for the same qualities in them that I thought I had in myself.”

King's 1999 mugshot

 

These traits, King explains, were anger and a previous history of violence. She was 15 when she became involved with neo-Nazis, and explains that struggles with her sexuality and bullying had made her into a violent teenager.

“I was bullied verbally for years. I didn't fit in, I was socially awkward,” she says. One incident in particular stands out. Aged 12, King was physically bullied for the first time.

“I was humiliated in a way that even today I still am humiliated by this experience,” she says. One day, King made the mistake of sitting at a desk that “belonged” to a bully. “She started a fight with me in front of the entire class… I’ve always struggled with weight so I was a little bit pudgy, I had my little training bra on, and during the fight she ripped my shirt open in front of the entire class.

“At that age, having absolutely no self-confidence, I made the decision that if I became the bully, and took her place, I could never be humiliated like that again.”

Angela King, aged 18

King’s story is important because when it comes to online radicalisation, the cliché is that bullied, “loser” men are drawn to these alt-right and neo-Nazi communities. The most prominent women in the far-right (such as Stewart, and Lauren Southern, a YouTuber) are traditionally attractive and successful, with long blonde hair and flashing smiles. In actuality, women that are drawn to the movement online might be struggling, like King, to be socially accepted. This in no way justifies or excuses extreme behaviour, but can go some way to explaining how and why certain young women are radicalised. 

“At the age of 15 I had been bullied, raped. I had started down a negative path you know, experimenting with drugs, drinking, theft. And I was dealing with what I would call an acute identity crisis and essentially I was a very, very angry young woman who was socially awkward who did not feel like I had a place in the world, that I fit in anywhere. And I had no self-confidence or self-esteem. I hated everything about myself.”

King explains that Life After Hate’s research reveals that there are often non-ideological based precursors that lead people to far right groups. “Individuals don’t go to hate groups because they already hate everyone, they go seeking something. They go to fill some type of void in their lives that they’re not getting.”

None of this, of course, excuses the actions and beliefs of far-right extremists, but it does go some way to explaining how “normal” young people can be radicalised online. I ask Alexandra, the former 4Chan racist, if anything else was going on in her life when she was drawn towards extreme beliefs.

“Yes, I was lonely,” she admits.                                                       

***

That lonely men and women can both be radicalised in the insidious corners of the internet shouldn’t be surprising. For years, Isis has recruited vulnerable young women online, with children as young as 15 becoming "jihadi brides". We have now acknowledged that the cliché of virginal, spotty men being driven to far-right hate excludes the college-educated, clean-cut white men who made up much of the Unite the Right rally last weekend. We now must realise that right-wing women, too, are radicalised online, and they, too, are culpable for radical acts.  

It is often assumed that extremist women are radicalised by their husbands or fathers, which is aided by statements by far-right women themselves. The YouTuber, Southern, for example, once said:  

“Anytime they [the left] talk about the alt-right, they make it sound like it’s just about a bunch of guys in basements. They don’t mention that these guys have wives – supportive wives, who go to these meet-ups and these conferences – who are there – so I think it’s great for right-wing women to show themselves. We are here. You’re wrong.”

Although there is truth in this statement, women don’t have to have far-right husbands, brothers, or fathers in order to be drawn to white supremacist or alt-right movements. Although it doesn’t seem the alt-right are actively preying on young white women the same way they prey on young white men, many women are involved in online spaces that we wrongly assume are male-only. There are other spaces, such as Reddit's r/Hawtschwitz, where neo-Nazi women upload nude and naked selfies, carving a specific space for themselves in the online far-right. 

When we speak of women radicalised by husbands and fathers, we misallocate blame. Alexandra deeply regrets her choices, but she accepts they were her own. “I’m not going to deny that what I did was bad because I have to take responsibility for my actions,” she says.

Alexandra, who was “historically left-wing”, was first drawn to 4Chan when she became frustrated with the “self-righteousness” of the website Tumblr, favoured by liberal teens. Although she frequented the site's board for talking about anime, /a/, not /pol/, she found neo-Nazi and white supremacist beliefs were spread there too. 

“I was just like really fed up with the far left,” she says, “There was a lot of stuff I didn't like, like blaming males for everything.” From this, Alexandra became anti-feminist and this is how she was incrementally exposed to anti-Semitic and racist beliefs. This parallels the story of many radicalised males on 4Chan, who turn to the site from hatred of feminists or indeed, all women. 

 “What I was doing was racist, like I – deep down I didn't really fully believe it in my heart, but the seeds of doubt were sowed again and it was a way to fit in. Like, if you don't regurgitate their opinions exactly they’ll just bully you and run you off.”

King’s life changed in prison, where Jamaican inmates befriended her and she was forced to reassess her worldview. Alexandra now considers herself “basically” free from prejudices, but says trying to rid herself of extreme beliefs is like “detoxing from drugs”. She began questioning 4Chan when she first realised that they genuinely wanted Donald Trump to become president. “I thought that supporting Trump was just a dumb meme on the internet,” she says.

Nowadays, King dedicates her life to helping young people escape from far-right extremism. "Those of us who were involved a few decades ago we did not have this type of technology, cell phones were not the slim white phones we have today, they were giant boxes," she says. "With the younger individuals who contact us who grew up with this technology, we're definitely seeing people who initially stumbled across the violent far-right online and the same holds for men and women.

"Instead of having to be out in public in a giant rally or Klan meeting, individuals find hate online."

* Name has been changed

Amelia Tait is a technology and digital culture writer at the New Statesman.

This article first appeared in the 27 October 2008 issue of the New Statesman, The death of Gucci capitalism