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The New Depression

The business and political elite are flying blind. This is the mother of all economic crises. It has

We are living through a crisis which, from the collapse of Northern Rock and the first intimations of the credit crunch, nobody has been able to understand, let alone grasp its potential ramifications. Each attempt to deal with the crisis has rapidly been consumed by an irresistible and ever-worsening reality. So it was with Northern Rock. So it was with the attempt to recapitalise the banks. And so it will be with the latest gamut of measures. The British government – like every other government – is perpetually on the back foot, constantly running to catch up. There are two reasons. First, the underlying scale of the crisis is so great and so unfamiliar – and, furthermore, often concealed within the balance sheets of the banks and other financial institutions. Second, the crisis has undermined all the ideological assumptions that have underpinned government policy and political discourse over the past 30 years. As a result, the political and business elite are flying blind. This is the mother of all postwar crises, which has barely started and remains out of control. Its end – the timing and the complexion – is unknown.

Crises that change the course of history and transform political assumptions are rare events. The last came in the second half of the 1970s, triggered by the Opec oil price spike and a dramatic rise in inflation, which marked the end of the long postwar boom. Its political consequences were far-reaching: the closure of the social democratic era, the rise of neoliberalism, the discrediting of the state, the embrace of the market, the undermining of the public ethos and the espousal of rampant individualism. For the next 30 years, neoliberalism - the belief in the market rather then the state, the individual rather than the social - exercised a hegemonic influence over British politics, with the creation of New Labour signalling an abject surrender to the new orthodoxy.

The modalities of this present crisis are entirely different. Extreme as they may have appeared to be at the time, the economic travails of the 1970s were progressive rather than cataclysmic. The old system did not hit the wall, but became increasingly mired and ineffectual. What swept the social democratic era away was not the force de frappe of an irresistible crisis but that it was accompanied by the steady rise of a new ideology and political force in Thatcherism - and Reaganism in the United States - and its victory in the 1979 general election.

In contrast, the financial meltdown of 2007-2008 demolished the neoliberal era and its assumptions with a suddenness and irresistibility that was breathtaking. The political class, from New Labour to the Conservatives, is standing naked. They are still clinging to the wreckage of their old ideas while acknowledging in the next breath that these no longer work. The financial crisis is a matter of force majeure; political ideas and discourse change much more slowly, even when it is obvious that the old ways of thinking have become obsolete. Meanwhile, there is no political alternative waiting in the wings, refining its radical ideas in think tanks ready to storm the citadels of power as there was in the 1970s, notwithstanding the fact that think tanks are now far thicker on the ground. Instead, it has been the mainstream which senses that neoliberalism no longer works, fatally undermined by events and, ultimately, the author of its own downfall. This crisis will have the most profound and far-reaching political consequences and will in due course transform the political landscape, but it remains entirely unclear in what ways and when that might be.

In all these senses the financial meltdown has far more in common with the Great Depression than the Great Inflation. When the financial crisis consumed Wall Street in 1929 and proceeded to undermine the real economy, engulfing Europe in the process, it was not accompanied by a radical shift towards Keynesianism, but rather a reassertion of sound finance orthodoxy, followed in due course by the adoption of protectionism. The political mainstream as represented by Labour's Ramsay MacDonald and Philip Snowden and the Conservative Stanley Baldwin all sang from the same hymn sheet. Only Keynes and a faction of the Liberal Party enunciated a plausible alternative. Eventually a programme of fiscal deficits and public works was pursued by Franklin D Roosevelt in the United States, but in Britain Keynesianism was not properly embraced until rearmament and the approach of war. Indeed, it was not until 1945 that the combined legacy of war and the Depression belatedly resulted in a fundamental political realignment and the birth of the social democratic era.

The Grim Reaper has finally spoken:

a boom pumped up by credit steroids and a bust that takes us back to the 1930s

Since the financial meltdown dramatically intensified in September 2008, Gordon Brown has managed to ride the economic storm rather more successfully than the Conservatives, or, for that matter, than Tony Blair would have done. It is Vincent Cable, the Liberal Democrats' econo­mics spokesman, however, who has indubitably emerged as the political sage, unafraid of confronting neoliberalism's shibboleths, demonstrating a clarity of mind and the political courage to tell things as they are, in a way that has escaped all other prominent politicians. Although Brown was the economic architect of the past decade and was responsible, more than anyone else, for its excesses and was shaping up to be a rather disastrous Prime Minister, he displayed last autumn, at least initially, an agility of mind and nimbleness of foot that defied the expectations of those who believed he was capable of neither. He revelled in the sense of purpose and vision offered by the crisis, seemingly prepared to jettison the thinking that had imbued his previous decade as chancellor.

But Package Part I, widely hailed at the time and imitated elsewhere, proved woefully inadequate, and the financial system remains frozen. Meanwhile the waters are rising up the Good Ship UK, threatening to transform the banking crisis into a fiscal and currency crisis. It seems unlikely that, if that should happen, Brown will survive the next election.

Even if it does not happen, Brown faces a serious problem about his own past role, because Britain’s crisis has been greatly exacerbated by the soft-touch regulation, easy credit, runaway house inflation and overexpansion of financial services over which he presided and for which he is accountable. So far he has refused to admit or accept responsibility for his actions – he initially had the temerity (or foolhardiness) to argue that the UK was better placed than other countries to deal with the credit crunch, even though it has become abundantly clear since that the very opposite was the case. So while Brown remains in denial, the plausibility of his new turn, and his understanding of what is entailed, must be seriously doubted.

Indeed, after its initial boldness, the government now seems trapped by its past actions and its former ways of thinking. Brown's failure to accept the need to nationalise the banks suggests the limits of his new-found political courage, and his inability to embrace the logic and imperatives of the new situation. He is still a prisoner of his old timidity and his conversion to the neoliberal cause. It is his good fortune that the Cameron Conservatives have been hugely wanting in their response to the financial meltdown. Having spent his first years as leader of the opposition seeking to reassure the country of his centrist credentials, David Cameron, at the first whiff of gunfire, has turned on his heels, rejected Keynesianism and, at the very moment when events have shown Thatcherism to be deeply flawed and historically out of time, headed back to the Thatcherite womb of sound finance, arguing that a government must balance its books and that deficit financing, Keynesian-style, is reckless and irresponsible.

But all this, it must be said, is the small change of politics. The crisis threatens in time to sweep away the political world as we know it and those who fail to grasp its magnitude and meaning. Far more is at stake than the fortunes of a few leaders, be their name Brown or Cameron. Who knows where things will be this time next month, let alone next year or, indeed, in 2012? The financial meltdown now rapidly plunging the western world into what increasingly looks like a depression is the first great crisis of globalisation. There was plenty of warning. The Asian financial crisis of 1997-98 proved a salutary lesson about the dangers posed by huge capital movements that were subject to precious little regulatory control. Three economies capsized (South Korea, Thailand and Indonesia) and others stood on the brink.

There were other earlier warning signs, notably Mexico in 1995, when GDP fell by 9 per cent and industrial production by 15 per cent, following a run on the peso. These crises were blamed on the immaturity and fecklessness of national governments - in the case of east Asia on so-called crony capitalism (which, incidentally, prompts the question of how we should describe Anglo-American capitalism) - which the International Monetary Fund obliged to engage in swingeing cuts in public expenditure as a condition of their bailouts.

Yet what if such a crisis were to be no longer confined to the peripheries of global capitalism but instead struck at its heartlands? Now we know the answer. The crisis has enveloped the whole world like an uncontrollable virus, spreading from the US and within a handful of months assuming global proportions, at the same time mutating with frightening speed from a financial crisis into a fully fledged economic crisis. In so doing, it has undermined the foundations on which the present era of globalisation has been built, namely scant regulation, the free movement of capital, a bloated financial sector and immense reward for greed, thereby bringing into question the survival of globalisation as we now know it.

Enormous international flows of unregulated capital have capsized the international financial system - with disastrous consequences for the real economy - in a manner akin to the effect of a roll-on, roll-off ferry shipping too much water. We can now see the cost of free-market capitalism and light-touch regulation. Iceland may provide an extreme example of the consequences of the credit crunch but it also illustrates the dangers facing the more vulnerable economies, the UK included, in a deregulated world where the market rules: a small, open economy; a large, internationally exposed banking sector; an independent currency that is not a serious global reserve currency (of which there are only three); and limited fiscal strength. These propositions have constituted the core economic beliefs - from Thatcher and Lawson to Blair and Brown - that have informed policymaking over the past three decades and without which, it was claimed ad nauseam, an economy could not succeed. Heavy-handed regulation and an overbearing state would serve only to frighten off capital and condemn a country to slow growth, stagnation and global marginality. Now we know the fallaciousness of these claims and the consequences of "letting the market decide".

Like Iceland, albeit not as extremely, Britain has been living in a fool's paradise. A failure to regulate the banks and other financial institutions in any meaningful fashion allowed bankers to behave in a grossly irresponsible and avaricious fashion; a boom that was made possible only by a government-enabled credit binge in which people borrowed recklessly; a bloated financial sector that grew to represent over 8 per cent of the total economy and which was found to have been built on foundations of sand; an overvalued currency that made manufacturing exports uncompetitive and thereby resulted in an unnecessary and counterproductive contraction in the manufacturing sector which must now be reversed; an absurd belief that boom and bust had been banished for ever, allowing the banks to turn a blind eye to the inflating of various asset bubbles and display a profound ignorance of the history of capitalism; a persistently chronic current account deficit that can no longer be compensated for by inward capital flows; monstrous salaries for those at the top of the financial and corporate tree, which were justified in terms of a trickle-down effect that remained a chimera, and as the reward for risk which was, in fact, a reward for greed and failure; growing inequality, which was justified in the name of a more competitive economy accompanied by declining social mobility in the cause of an open and flexible labour market; and, finally, the mushrooming of what can only be described as systemic corruption on a mega-scale as the state ignored the gargantuan abuses of those who ran the banks and other financial institutions, while regulatory authorities willingly colluded in their excesses.

This is the sad story of the New Labour era.

The ultimate cost of this debacle as yet remains unknown. What began as a financial crisis is threatening, as the government seeks to bail out a bankrupt financial sector, to become a currency crisis, with foreign investors concerned about the effects this might have on the value of sterling, and perhaps even worse, ultimately a sovereign debt crisis, with growing doubts about the UK’s financial viability. Until there is some end in sight to the financial crisis, and a line can be drawn under the banks’ indebtedness, we will not know the answer to these questions. One thing is clear, however: whatever the limitations of the social democratic era, it was never responsible for such an all-enveloping and cataclysmic crisis as the one that the neoliberal era – and the Thatcherites and New Labour – have managed to produce. After all the boasting about the virtues of the Anglo-American model of capitalism, the Grim Reaper has finally spoken: a boom pumped up by credit steroids and a bust that takes us back to the 1930s.

There are two key aspects to this crisis: national and global, with the latter promising to be rather solutions are concerned, we are in uncharted territory, with close to zero interest rates, a Keynesian-style fiscal boost that may prove inadequate to the task and could well fail, a hugely indebted financial sector that threatens to leave us with an enormous future tax burden and a greatly expanded national debt. All of this, furthermore, must be addressed in the context of an open-market regime which is very different from those of previous eras, and which could render Keynesian-style national solutions ineffectual. What would greatly assist any national recovery is a co-ordinated global response to the crisis; in other words, global co-operation at the highest level. This cannot be ruled out, but it would be a brave person that would bet on it. It was exactly the lack of international co-operation that bedevilled recovery in the 1930s and eventually led to the Balkanisation of the world into regional currency and trading blocs.

The most important single question in this context is the relationship between the US and China. Will the Obama administration be able to resist the slippery slope of creeping protectionism? Will arguments over the revaluation of the Chinese renminbi be resolved amicably? If the answer is in the negative, then the global outlook will be very bleak indeed and so, also, as a result, will be the prognosis for national recoveries. Indeed, the prospects would look disturbingly like those of the 1930s, with growing international antagonism and friction and a continuingly intractable crisis at a national level, with only the very slowest of recoveries.

Around the world there is growing evidence by the week of a resort to national solutions at the expense of others: measures to subsidise industries that are in severe difficulties; the Buy American clause that was inserted by the House of Representatives into Barack Obama's latest package (though since weakened); the industrial action in Britain against foreign workers; the withdrawal of banks to their national homes; the attack by Timothy Geithner, the US treasury secretary, on China as a currency manipulator. No Rubicon has been crossed but the warning signs are clear. A retreat into protectionism and beggar-thy-neighbour policies will deliver the world into a second Great Depression.

So what will be the political effects of the financial meltdown? Some are already evident. Just as the Great Inflation of the 1970s played to the tunes and concerns of the right, with its invocation of the market, the New Depression suggests the opposite, the inherent limitations of the market and the indispensability of the state. Indeed, the speed with which the neoliberal refrains and invocations have unravelled has been breathtaking. The single most discredited aspect of the social democratic legacy was nationalisation, and yet the government, with the most extreme reluctance, has been obliged to nationalise Northern Rock and partially nationalise the Royal Bank of Scotland and the merged Lloyds TSB and HBOS. Who would have ever imagined, at any point during the past 30 years, that no less than the financial commanding heights of neoliberalism would have ended up in the hands of the state, with precious little opposition from anyone except a few disgruntled shareholders? Even now, however, the Labour government, still trapped in the ideological straitjacket of New Labour and displaying extreme timidity in the face of powerful vested interests, which has always been a New Labour characteristic, is running scared of the inevitable logic of the situation, namely that all the high-street banks should be taken into public hands until the mess is sorted out. Anything else leaves the public responsible for all the debts and risks, while the banks continue to be answerable to the very different interests of their shareholders. But such is the fury and depth of the crisis that this scenario is highly likely.

The state is experiencing an extraordinary revival. The credit crunch is the most catastrophic example of market failure since 1945. It became almost immediately obvious to wide sections of society that there was only one institution that could potentially sort out the mess: the state. Far from being a rational distributor of resources, the market had proved the opposite. Far from bankers and financial traders embodying the public interest, they have been exposed as irresponsible and dangerous risk-takers whose primary motivation was voracious greed. If trade unionists and the nationalised industries were the demons of the 1970s, bankers and the financial sector have assumed the mantle of public enemy number one in the late Noughties. In fact, the irresponsibility of bankers, and the damage they have inflicted on the economy, hugely exceeds anything that the unions could possibly be held responsible for in an earlier era. Meanwhile, the fallen heroes of the pre-Thatcher era, most notably Keynes, are duly being exhumed, restored to their rightful position, and pored over for their ability to throw light on the present impasse and what might be done; if the recession turns into a depression, Marx will once again become required reading.

This political shift is not just a British phenomenon, but a more general western one. The most striking feature of President Obama's inaugural speech was the way in which it embraced and legitimised African Americans for the first time in American history. But it also had another powerful theme, namely its invocation of the public interest and public service. After decades during which American political discourse has been dominated by the language of individualism and the market, it came as a shock to hear a US president articulate a very different kind of philosophy, renouncing private greed in favour of the public good. Obama's election can in part be seen as a response to the failure of the neoliberal era, as well as of Bush's neoconservative agenda; certainly his election represents a remarkable shift to the left in US politics, in contrast not just to Bush, but every recent US president, including Reagan, Bush Sr and Clinton. That Obama is the first African-American president also represents a remarkable redrawing of the political landscape. There is no more powerful - nor difficult - way of redefining society or to embrace a new form of representivity than to include a racial minority that has been excluded.

This brings us finally to what might be the longer-term global consequences of the crisis. Again, we are inevitably stumbling around in the dark because so much depends on whether the recession metamorphoses into a fully fledged depression and in what way and shape the world eventually emerges from the debacle. That said, two key points can be made. First, the credit crunch signals the demise of the Anglo-American, neoliberal model of capitalism, which has exercised a hegemonic influence over western capitalism and been the blueprint for globalisation since 1980. Because of its catastrophic failure there seems very little chance of its resurrection. The process of recovery - whenever that might be - will be accompanied by an overriding concern to ensure that the events of 2007-2009 are not repeated in the future, just as happened in the US in the 1930s with the strict regulatory framework that was introduced for the banks after their comprehensive failure in 1929. This will include the search for a new global regulatory framework that controls and constrains international movements of capital, as well as strict controls over the financial sector at a national level. A new set of political priorities - and with it a new political language - will be born.

Meanwhile, the influence and prestige that the US, and to a far lesser extent Britain, have enjoyed will vaporise in the same manner as their neoliberal model. Their 30-year project has failed and they will be obliged to pay the price in their reputation and the esteem in which they are held. The countries of the former Soviet Union and the casualties of the Asian financial crisis that were forced to swallow the neoliberal medicine will have good reason to feel aggrieved and resentful. The west has been forthright in accusing the non-western world of corruption. The financial meltdown suggests that the west has been guilty of huge hypocrisy. Systemic corruption has lain at the heart of the western financial system. An entirely disproportionate and extortionate level of bonuses has ensured the enormous enrichment of top executives in the financial sector, all in the name of reward for success, when in fact it was the reward for failure. In addition, we have had the collusion of the credit-ratings agencies; a regulatory system characterised by its failure to act as any kind of constraint; and governments that ensured the continuation of this web of relationships and applauded its achievements. The corruption was on a breathtaking scale as evidenced by the size of the bailouts required to rescue the banks. It will be difficult for western governments to make these kinds of accusations of others in the future. That Obama represents such a voice of hope will help to mitigate the inevitable ill-will towards the US, but this should not be exaggerated amid the euphoria surrounding developments in Washington.

The second point is more far-reaching. It is doubtful whether we can still describe ourselves as living in the American era or, indeed, the Age of the West. If not yet quite over, both are certainly drawing to a close, and it seems likely that the effect of the financial meltdown will be to accelerate the rise of China as a global power. The contrast between the situation in China and that in the US could hardly be greater, even though it has been partially obscured by the depressive effect of the western recession on Chinese exports and on China’s growth rate. While the US economy is contracting, China’s grew at roughly 9 per cent in 2008 and is projected to grow at about 6 per cent in 2009. Its banks, far from bankrupt like their US counterparts, are cash-rich. China enjoys a large current account surplus, the government’s finances are in good order and the national debt is small. This is a crisis that emanates from the US and whose impact on China has been essentially indirect, through the contraction of western markets. It is the American model that has failed, not the Chinese.

One of the factors that intensified the Great Depression, and indeed was part cause of it, was Britain's growing inability to continue in its role as the world's leading financial power, which culminated in the collapse of the gold standard in 1931. It was not until after the war, however, that the US became sufficiently dominant to replace Britain and act as the mainstay of a new financial system at the heart of which was the dollar. The same kind of problem is evident now: the US is no longer strong enough to act as the world's financial centre, but its obvious successor, namely China, is not yet ready to assume that mantle. This will undoubtedly make the search for a global solution to the present crisis more difficult and more protracted.

Martin Jacques's new column will be published fortnightly in the New Statesman. His book "When China Rules the World: the Rise of the Middle Kingdom and the End of the Western World" will be published in June (Allen Lane, £25)

the global downturn in numbers

    0.5%

    IMF prediction for global growth in 2009 - worst since WWII

    Up to 40 million

    Number of people who will lose their jobs this year, according to the International Labour Organisation

    $9.7trn

    Total pledged by the US alone towards solving the crisis

    3.6%

    Proportion of GDP pledged by the G7 and BRICs countries towards fixing the crisis (1.5% this year)

    2.3m

    Number of US properties that received a default notice or were repossessed in 2008. In the UK, 45,000 homes were repossessed - another 75,000 are expected to be taken in 2009

    14

    Number of major global banks which collapsed, were sold or were nationalised during 2008

    200,000

    Number of European companies expected to fail this year; an additional 62,000 are expected to fail in the United States. These figures represent record levels of insolvency

    52%

    Increase in UK company failures between late 2007 and late 2008

    14%

    Drop in level of Chinese exports during January

    1%

    Current UK interest rates (down from 5% in October 2008). In the US, rates have fallen to between 0 and 0.25%

How the crisis unfolded

13 September 2007 Run on Northern Rock begins when it is revealed that the bank has requested emergency support from the Bank of England

21 January 2008 FTSE suffers worst falls since 11 September 2001

February 2008 Northern Rock nationalised

17 March 2008 JP Morgan Chase takes over the US investment bank Bear Stearns

12 July Mortgage lender IndyMac collapses - second biggest US bank in history to fail

9 August 2007 European Central Bank pumps ?95bn into banking market

7 September Financial authorities step in to rescue Fannie Mae and Freddie Mac

9 September Bradford & Bingley becomes second British bank to be nationalised

15 September Lehman Brothers files for bankruptcy

16 September AIG, biggest insurance firm in the US, receives $85bn rescue package

3 October 2008 US government announces $700bn Troubled Assets Relief Programme

8 October UK launches its first bank bailout plan, making £50bn available

October 2008 Iceland's banks collapse. IMF extends £1.4bn ($2.1bn) loan a month later

24 November Alistair Darling announces a temporary cut in VAT from 17.5 to 15 per cent

23 January 2009 UK enters recession

28 January US Congress passes Barack Obama's $819bn stimulus package

5 February UK Monetary Policy Committee votes to cut interest rates to 1 per cent - the lowest in over three centuries

Michael Harvey

Martin Jacques is a journalist and academic. He is currently a visiting fellow at the London School of Economics Asia Research Centre and at the National University of Singapore. Jacques previously edited Marxism Today and co-founded the think-tank Demos in 1993. He writes the World Citizen column for the New Statesman. His new book on the rise of China, When China Rules the World, will be published in June.

This article first appeared in the 16 February 2009 issue of the New Statesman, The New Depression

Matthias Seifarth for New Statesman
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What happened when Kiss went to Moscow: bullet-proof tents, rivalries and mating rituals

Gene Simmons: "If Putin is here, he will not make himself known to me."

When Gene Simmons decided he wanted to be a rock star, he made a deal with his mother: be in a band but show me how you’re going to pay the rent. He had a variety of marketable skills at his disposal. At Newtown High School in Queens, Chaim Witz, only son of Flóra, who’d brought him to New York from Israel, took stenography and typing classes. By 13 he could out-type his teacher. By 18 he was a “tele-girl” (a temp) and found himself in demand with powerful female executives in Manhattan. With his feet, he worked a Dictaphone machine to take their letters – one pedal for go, one for stop and one for rewind. The then managing editor of Vogue, Kate Rand Lloyd, heard about the only male temp on the floor at Glamour. He became her Man Friday and fixed her hectograph, rexograph and mimeograph machines.

On 29 April 1974, he made his first television appearance on The Mike Douglas Show as Gene Simmons, “The Demon”, of the rock band Kiss. He picked his way across the studio floor on 30lb silver platforms, his abnormally long, seven-inch tongue thrashing about in his mouth like a skinned snake. In a whisper he declared himself “evil incarnate”. On the sofa next to him was the comedian Totie Fields. “Is your mother watching?” she asked. “Wouldn’t it be funny if under all the make-up he’s just a nice Jewish boy?” Eighteen months later, Simmons got a cheque from his record company for $1.5m. He showed it to his mother and she said, “Now what are you going to do?”

Up on the roof garden of the Park Hyatt hotel in Moscow sits Simmons today, his wiry hair, like black loft insulation, pulled into a ponytail. I’ve been taken to see him briefly, before an interview scheduled for two days later. Despite looking, in his own words, “at best like a baby dog at birth”, Simmons claims to have slept with 4,600 women, taking a record of each with a Polaroid camera. At 67, his latest conquest is Siri, whom he has programmed to call him “My Lord and Redeemer” on a cellphone with a special Kiss case.

Simmons stands when a woman arrives; he analyses the size of your bag, wondering how you fit your make-up in it. He thumbs through photos of Kiss products on his phone: Kiss guitars, Kiss car wraps – and a Kiss Kasket, a limited-edition coffin, part of his funeral range. The murdered Pantera guitarist Dimebag Darrell was buried in one: affection runs deep for the cartoonish glam-metal compound, now in its 44th year of music and merchandising. Among the expressions Simmons claims to have trademarked are “rich and famous” and the Chinese word xi, meaning “the West”.

Rehearsals for Russia’s May Day celebrations float up from Red Square, operatic folk songs and the chug-chug of army boots being put through their paces. Over in the Kremlin, Vladimir Putin prepares a phone call to Donald Trump to talk about Syria. US-Russian relations have hit a new low. In recent months, Simmons has generated a steady flow of headlines from views that wouldn’t seem out of place in a hardline administration. Drug addicts should be sent to gulags, he said; paedophiles put to death. Islam is a “vile culture”, and don’t even get him started on immigration. On the night of the national festivities, Kiss will play the Moscow Olympic Stadium to 15,000 people who’d rather hear “Crazy Crazy Nights” than “The Song of the Volga Boatmen”.

Will Putin be at the gig?

“If he is, he will not make himself known to me,” he says, drifting off to his room.

Gene Simmons’s hoist, which enables him to float 30 foot above the stage, puts a great strain on his body because his costume gives him an extra 50lb in weight. He recently fell over on to his back and couldn’t get up again, like a turtle. At the show, he will be spitting fake blood. But today’s soundcheck is a sedate affair: a three-hour dissection of stage manoeuvres, the testing of winches and timing of feet. In plain clothes, the band’s frontmen, Simmons and Paul Stanley, step on hydraulic arms and sweep out over the empty arena like two tree surgeons. Simmons noodles on his bass – snatches of Peter and the Wolf and “The Pink Panther Theme” – but seems less interested in playing the well-oiled anthems of Kiss.

It’s like watching a group of men congregate around a car they’re refitting, or a hole they’re digging in the ground. They seem completely absorbed – but every so often, with a sting, a guitar pick hits my face, 30 feet away at the side of the stage. Throwing their personalised, painted guitar picks at people is part of Kiss’s mating ritual. Stanley greeted me remotely earlier by despatching a fistful of them via the tour manager, the way a man might order a drink for a lady across a hotel bar. Another pick hits my forehead. “Hey, Statesman.” And another. “Can someone lift her on to the stage?”

There are no women in the Kiss entourage, apart from one who carries the costumes and another who manoeuvres the large wheelie bins containing the make-up and cosmetic products the men administer themselves. Both employees are on the younger side. It was a different story in Moscow thirty years ago, as Jon Bon Jovi told the NS, when, at the first Western rock gigs in Russia, babushkas swept the stadiums with brooms made of twigs.

At the centre of the Kiss team is a man who will confirm this: Doc McGhee, the music mogul sacked by Jon Bon Jovi after McGhee was convicted for drug smuggling. In 1989, partly to get around his jail sentence in the US, McGhee collaborated with the Russian musician Stas Namin to bring Western bands to the country. Namin’s grandfather was a Bolshevik statesman who served under Lenin, Stalin and ­Khrushchev. The Moscow Music Peace Festival happened on Gorbachev’s watch. McGhee spent three days with the president at the Kremlin offering him $10m for the rights to a book and film of his life. You can’t blame him for trying.

It was different putting on gigs in those days. You had to allow 12 hours for an eight-hour drive to account for the number of times you’d have to stop and bribe border guards with records, or wake Alice Cooper up from the tour bus and get him to do an autograph in order to be allowed on your way. McGhee brought his own ice from Scandinavia. You couldn’t buy records in Russia but there was a feverish black-market trade on street corners in albums pressed on to old X-rays. A young interpreter joins the band one night and talks about her parents’ time with bright eyes. “It’s different now that you have access to everything,” she says.
“It doesn’t matter so much any more.”

Outside the hotel, the teenage boys keeping a three-day vigil for Simmons and Stanley might disagree. Kirill and Daniel have flown four hours from Tomsk, Siberia, for the concert. They are 14 and first saw the band’s white faces in a magazine. Dmitri, in his thirties, knew of Kiss only from some famous graffiti in Red Square: their double “lightning S”, banned in some countries for its proximity to Nazi insignia, appealed to his teenage brain. I bring Stanley’s guitar picks out of my pocket. Twenty boys scrum violently like pigeons on a loaf of bread.

Back at the soundcheck, Kiss leave the stage in strict formation, 20 feet apart, each flanked by a member of staff as though surrounded by great crowds. It’s a small hint of the invisible rules, the secret rivalries, covenants and compromises that allow opposing characters to exist side by side for decades in the classic rock bands. Simmons is the face of Kiss but Stanley’s limousine always arrives first, “because he’s the boss”, someone mutters. Stanley applies his make-up – a soft-faced, effeminate character known as The Starchild – in a private room, while Simmons packs into one dressing room with the rest of the band, playing the Kinks at loud volume.

Gene takes over two hours to complete the process “because he is talking all the time”, Stanley says. “It’s very hard to do it when your mouth is moving. Me, I can do it in half an hour.”

Stanley drifts down the corridor and, taking my chances, I slip into his dressing room behind him. It’s a triumph of interior decorating, the Soviet-style lime-green walls and strip lighting obscured by satin drapes like a black-and-white version of the purple “foo foo room” that Prince used to set up backstage. There is a black satin bed should he need a lie-down for any reason. There are weights of various sizes and a medicine ball – and in the corner, lit with old-fashioned make-up lights, his own cosmetics area.

“Here is my clown white,” he says softly, picking up a pot of the thick, sweat-resistant foundation they discovered in the Seventies. “And here are my puffs.” Why do they do their own make-up?

“Because it’s a ritual,” he says. “It’s a rite of passage. I can’t imagine sitting in a chair like a dummy and having somebody painting my face. It is putting on my uniform. It’s my colours. And it’s better for me in here than the chaos in the other room.”

Stanley takes a seat on a leather sofa, one leg crossed over the other, eyes on the floor. On his mirror, there is a photo of him playing the burned and disfigured lead in Phantom of the Opera, a Toronto production, in 1999. Above it is written “Star of the Show”.

He was born Stanley Eisen, “a little fat kid”, deaf in one ear as a result of microtia, a deformity of the ear canal. He was raised on opera and Broadway. As a young man he drove a taxi. He speaks in careful but lyrical sentences, and gets straight down to business.

“I always found it interesting that a lot of the critics were venomous in their dislike of us,” he says. “It’s something that perhaps they should work out on the psychiatrist’s couch. Because the dislike for the band was so out of whack, so out of proportion, you almost have to look at someone and go: who beat you as a child!”

In 1978 the NME ran an interview with Simmons under a headline it had also used for Freddie Mercury: “Is this man a prat?”

“The fact is that what we do has endured,” Stanley says. “What we are doing has no expiration date. Some of the critics who embraced us when we were struggling spurned us when we became successful. Once you gain acceptance you have ‘sold out’. Well, sold out means the place is full. I never felt the need to counter the vitriol because I was too busy succeeding.”

Stanley Eisen is the son of Austrian and Polish Jews who escaped to New York via Amsterdam. Simmons’s mother was born in Hungary and spent many months in a Nazi concentration camp in Austria, where she saw most of her family put to death. She fled to the new state of Israel, where her only son was born, and moved to New York in 1957 after her husband deserted the family. Stanley and Simmons have survived many line-up changes in their band: they once had a member called Vince Cusano, whom Simmons renamed Vinnie Vincent, because the old name sounded “like a fruit vendor”. Their tour manager, Steev Toth, has Hungarian and Jewish ancestry. The guitarist Tommy Thayer is the son of Brigadier General James Thayer, who liberated 15,000 Hungarian Jews from a concentration camp in Austria which, Simmons thinks, may have been his mother’s.

Paul Stanley: "I have said to Gene, I would shoot myself if I had your life."

“We are children of immigrants,” Stanley says. “We are children of the post-Holocaust; we have a certain mentality, and a mindset, and a work ethic. I was taught you don’t take anything that isn’t yours, don’t take anything that you don’t deserve and don’t take anything you didn’t work for.

“We are, more than ever, brothers. That doesn’t mean we want to spend all our time together. I have said to Gene before, ‘I’d shoot myself if I had your life.’”

Why?

“Because what is appealing to Gene in life is not my desire. And my life is boring to him.” He stretches along the whole length of the sofa, beginning to relax.

It is 4pm, and from behind a Superman curtain down the corridor, the muffled sound of Sixties British music signals the start of the transformation. “All right?” barks a cod London accent. I can make out Simmons’s silver platforms propped up on the top of a crate but I cannot see his face.

“He is the strangest guy,” their manager Doc McGhee told me the previous night in the hotel bar. “I mean, the strangest legitimate guy I know – I know bipolar guys, guys with mental problems. He has NO friends.”

Simmons’s family life played out in 2011 on a popular reality-TV show called Gene Simmons Family Jewels. For decades he had been “happily unmarried” to the erotic actress Shannon Tweed, the star of films including Meatballs III and Indecent Behaviour. The couple have two children, but they did not live together.

“The show made him behave differently towards his family,” McGhee told me. “It showed him from different angles and he didn’t like what he saw.” The idea inspired McGhee to conceive another programme called Extreme Combover: “You do this thing to your hair, and you think it looks good, but everyone else sees it from a different angle. My first two contestants would be Gene Simmons and Donald Trump.” Simmons appeared with Trump on The Apprentice (Trump fired him) but Combover has yet to be made.

The Superman curtain is ajar and I can see Simmons in profile, emerging from behind a wall. The next time I look up, he has pulled himself across the room on his wheelie chair and sits facing me with legs thrown apart, groin open, presenting a silver codpiece.

“All right?”

Nothing can prepare you for the Kiss make-up transformation in the flesh, and the psychological shift it occasions in both onlooker and band. One by one, a series of giant, seven-foot space clowns, taller than anything else in the building and whiter than the moon, emerges, each with a look of surprise on its face. High up the door frame of Stanley’s dressing room peers a face like a sad mime, one eye a black star, red lips pulled into a feminine pout. He takes to the corridor with the careful elegance of a giraffe – and there is something new in his manner; glorying in eye contact now, waving his platform boots in my face. Suddenly the biggest mystery of all – how Kiss can claim to have got so much sex – is a mystery no more. The white faces are frozen as men of 25. And the costumes, if you can call them that, directly facilitate inappropriate physical interplay: all rules of personal space are broken as, without thinking, you find yourself touching and poking them. A tail emerges from Paul Stanley’s satin backside and my hand closes around it.

“Is it real rabbit?”

“Will you call me a fraud if it’s not?”

He bears the sense of an older, more medieval conquest; of pillage and of poor women taken by force.

Simmons, hair pulled into a five-inch topknot and with giant leather bat wings under his arms, is a different beast. His entire body is plated in armour – part orc, part titanium warthog – and where Stanley is charming, he bears the sense of an older, more medieval conquest; of pillage and of poor women taken by force.

He talks little, but what he wants, he gets with his body. He pulls the make-up girl in for a hug – by the hair. I am told under no circumstances to get in his line of vision after the show, because if I do so he will “slime” me with fake blood and sweat. He pretends he hasn’t seen me – then backs me into the wall with a little too much force, his spikes digging into the back of my hands.

***

The next morning, up in the second-floor restaurant, Simmons has breakfast with Shannon Tweed. They finally married in 2011. Tweed, 60, is dressed in pink and flicking through Time magazine. Simmons’s thumbnails are short and wrecked, black with last night’s make-up. Silver hair curls on his chest: in his mirrored sunglasses and military-style shirt with gold adornments, he looks like Gaddafi at leisure. He moves my Dictaphone closer.

On the way home from school, he would go to the library and read the encyclopaedias. That’s where he learned that Edward VI used to torture animals. “When you’re king, who’s going to tell you not to skin a frog alive?” he reasons. I ask him about his childhood heroes. “I didn’t have heroes,” he says. “Not real people. My heroes were fantasy. My heroes didn’t have flaws – Superman and Einstein and ethereal, semi-godlike figures. Because whenever you have a real-life hero it’s f***ing pathetic how they wind up – like Elvis, naked and bloated on the bathroom floor.”

He picks up his phone and summons Siri to bring up a picture of the British dish of faggots in gravy. “Explain this to me – what the hell is that?” he asks. “The English were always a smaller people because of the food. After the war you had beans on toast and what the f*** else did you eat? In the States we had butter and pancakes – it was always a big supply. If Jagger got into my outfit on seven-inch heels spitting fire and flying through the air, he would be exhausted. Put Bono in my outfit? Good luck.”

It seems a good time to ask him how he feels on stage.

“I can glibly speak about it,” he says. “But in real terms I am aware that there is a transformation that takes place here –” he points at his ribs. “I am aware that my chest cavity expands, and my heart is pumping, and the only thing I can compare it to is when a boxer can be backstage toying with his little girl, then go into the ring and be oblivious to the audience, and have this kill thing.”

Tweed has looked up the root of the word “faggots” and reads from her phone in her slightly anaesthetised, Beverly Hills voice: “A bundle of pieces of iron or steel to be welded, rolled or hammered together at high temperature.”

“It’s a question of semantics,” Simmons replies. “Though I’m not anti-semantic . . .”

I ask him about the reality show that changed his life. “I didn’t like watching myself,” he says. “I mean, I love the way I look, other than these affectations [he gestures to his sunglasses]. They even filmed my facelift – I had my face thrown over my shoulder like a scarf. But in the course of the show I realised what an asshole I was.

“When I was a little kid, my mother would smack the shit out of me as soon as I went out of line. When I went off on my own, I was my own police in certain areas: I’ve never knowingly got high or drunk or smoked a cigarette, because I didn’t want to break my mother’s heart. But other than that, I was self-entitled. I’m an only child so I look to myself for everything. Part of that process is you get deluded with the sound of your own voice. And although I am fairly educated, that doesn’t mean I have wisdom.”

In the early 2000s Simmons launched a magazine called Tongue, which ran for five issues, with an emphasis on the celebration of the female form. There will be a new magazine called Mogul – “high-end pop culture, entrepreneurial” – and he shows me a mock-up of the cover with him on the front. He has published several books, including Ladies of the Night: a Historical and Personal Perspective on the Oldest Profession in the World and the business title Me, Inc: Build an Army of One, Unleash Your Inner Rock God, Win in Life and Business.

“I’m a curiosity to people in high finance,” he tells me, “because I haven’t been there and done that, but I have made a decent living. They can’t put a finger on how and why it has worked for me.” He adds, of music, “What other job would give you money in advance and you never have to pay it back?”

He has read Trump’s books. “All business books are lies,” he says. “Ten secrets of success? People want a short cut to life. You have a duty to educate yourself, and from there on it is f***ing hard, back-breaking work. Forget ‘inherent’ and ‘intrinsic’ and other big words like ‘gymnasium’. Nothing happens without hard work.”

In 2011 Simmons endorsed Mitt Romney, saying that America needed to be in the hands of a businessman. “Government is business,” he says today. “People don’t understand that. A lot of people hate Trump, I get it. I know the man –”

“Which is not to say you like him,” Tweed mutters.

“He doesn’t give a f*** what anyone thinks. You’re talking about a guy who does not care and will go to war against all media. I want a businessman in there. Not someone to dole out favours, raise your minimum wage, meantime countries get deeper and deeper into debt. I want someone who says: ‘You’re fat and bloated and you’re going on a strict diet.’ The dietician is not your friend.”

Excuse me,” his wife chips in.

“I’m sorry?”

“You’re burping while talking.”

“I was? At least I didn’t fart. To make a long story short,” Simmons says, “I don’t know why anyone gives a squat what somebody with a guitar round his neck thinks about politics. ’Cos I sure as f*** don’t care what your wonderful new Prime Minister thinks about Kiss.”

“Rock stars are morons,” Simmons says. “Pragmatism is much more my milieu.” And then: “Let me show you a short video.”

He raises his handkerchief, mops his brow, surveys a black patch and muses: “Hair dye.” He’s not the first reactionary American rock star I’ve met who gets flustered talking about Donald Trump despite sharing many of his views. They’re all businessmen, headline-chasers. Trump got to be president after forty years hanging around at the same galas as them.

“Rock stars are morons,” Simmons says. “Pragmatism is much more my milieu.” And then: “Let me show you a short video.” He takes his phone and fires up an interview with the American journalist Dan Rather, in which Simmons declares that immigrants in the US should learn goddam English.

“Yesterday their cousin would have wound up in a can of dog food,” he tells me. “But today you can literally sue the president for sexual harassment and win. You want to try that here in Russia? ”

“And you know what celebrities shouldn’t do?” Tweed cuts in. “Talk politics. Don’t do it. Eat your food.”

As Simmons scoops the last of his porridge I ask about his relationship with Paul Stanley. “It’s too easy to say that we’re both Jewish and the other guys weren’t, so they didn’t survive but we did,” he says. “With Paul and me, it’s like the marriage of different alloys making titanium. Likewise with dogs. Purebreds are retarded. It’s the mixture of bloods that makes them healthy.”

Surely another advert for immigration.

“Legal immigration, do you mean?” he whispers. “Because there is a profound difference. I want to know everybody’s fingerprint. I want to know everybody’s social security number. Instead of just ghosts. Twenty million in America! More than most other countries have men, women and children. Know wot I mean?”

In the days after my return from Russia, I get 16 emails from Simmons’s personal account (he has no assistant), each containing a separate business venture he wishes me to know about. There’s a cardboard cut-out of him advertising Dr Pepper, a reproduction of his MoneyBag clothing logo, a new Kiss sandwich toaster – and a photo of him ringing the bell at the New York Stock Exchange.

“You know why we were the number-one banned band in Russia?” he told me. “‘I wanna rock’n’roll all night’, ‘I Was Made for Lovin’ You’ – the most powerful word in the English language is ‘I’. There is no scarier word for an authoritarian regime.”

***

Simmons was once asked to describe the experience of performing and he put it like this.

“The only comparison I can make is with the films of Leni Riefenstahl. One word from Hitler and the masses would move in unison. It was an amazing feeling of power . . . I was King Kong, pounding his chest after chewing up some damsel in distress. Godzilla stomping through Tokyo’s streets. To say I felt like God up there is not an overstatement.”

On either side of the stage at the Olympic stadium are small bulletproof tents. Paul Stanley takes a zip wire over 15,000 Russian fans and lands with force, on unforgiving platforms, on his second hip replacement. He bursts into a perfect Christ-like arc, and keeps up an energetic but slightly banal stage patter: “Here is a song from 1988!”

Over to the left, in a pool of green light, stands a crazy lump – blank of face, rolling of eye, head jerking in time to the music with globules of viscous blood bubbling up from a black mouth. For a moment, there is something tragic about Simmons, like a mad, chained bear, a freakshow. Then he’s breathing fire. Ticker tape explodes on to the crowd from two big cannons; flames leap, and then it’s over.

In the hotel car park, the door of Simmons’s taxi falls open to reveal him etched in light, head back, encrusted with fake blood. His minders walk him through the back of the building, but, knowing his ­tendency to “slime” people, no one wants to share the lift with him. 

Kiss’s UK tour begins on 27 May. Gene Simmons addresses the Oxford Union on 29 May. Details: www.oxford-union.org

Kate Mossman is the New Statesman's arts editor and pop critic.

This article first appeared in the 18 May 2017 issue of the New Statesman, Age of Lies

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