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“I’d have been ashamed not to join the IRA”

Sophie Elmhirst joins Martin McGuinness on the presidential campaign trail in Dublin, and finds an e

A little girl cartwheels nonchalantly through the hallway at the community centre in Ringsend, east Dublin. Not everyone, it seems, is excited at the prospect of Martin McGuinness's imminent arrival. Nearby, a boy holding a football, crimson-faced and out of breath, turns to a member of staff who is trying to corral the scattered children before the political delegation descends, and says: "So, what do we get for doing this?"

Outside, photographers and cameramen have gathered on one side of the street, the children on the other. The two camps shuffle and whisper in anticipation. A boy stands in the middle of the road yelling, "It's him!" every time he spots a car in the distance. Another TV crew arrives. "Will I be on telly?" asks a girl, already waving at the camera. And then they all surge forward, muscling each other out of the way, a photographer removing a spare child by his shoulders so that he can get a clear view of McGuinness, Sinn Fein's candidate for the Irish presidency in the 27 October election, walking down this street by Dublin's old docks.

He smiles as the children amass around his legs. McGuinness's ability to smile for hours on end, beyond the point of face-ache but in a way that always seems sincere, is noteworthy. "What's your name? And what's your name?" he asks the children one by one. They all give him fake names, giggling. One of their super­visors shakes her head and mutters under her breath that they would "buy and sell you in a day if they could".

The media pack soon takes over, pressing towards McGuinness. The questions are all on a single theme: the television debate that took place last night between the seven presidential candidates on RTE, the Irish state broadcaster. In the course of the programme, the presenter, Miriam O'Callaghan, asked McGuinness how his belief in God squared with his former life as a leading member of the IRA. He complained, and newspaper reports described him taking the presenter into a room after the show for a private conversation from which she emerged "shell-shocked" five minutes later. That's the way the Irish newspapers write about McGuinness: laced with a threat of violence and intimidation, a hardman enforcer in disguise.

Today, however, he's back on track, friendly and upbeat. The smile - a sort of wrinkly grin, grandfatherly (he has five of them) and oddly gentle - is fixed. McGuinness is the "People's President", according to his campaign literature. Visiting community centres of this sort is the "best part of the job", he tells the centre manager, as she leads him through a computer room - where people queue to have their photo taken with him - and out to a football pitch and a string of allotments lining the waterfront.

It's a fine afternoon, cool and sunny, and the photographers are relishing the inevitable prospect of McGuinness shedding his jacket, pushing up his sleeves and kicking a ball. The kids are ready, a goal is set up and he tells the photographers to swing their cameras off him and on to the tiny boy wearing over-large gloves who's sinking low to the ground, pre­paring to save the visitor's shot.

He's good at this, McGuinness. Not all politicians are - especially two tired weeks in to a month-long campaign, traversing Ireland from town to town, interview to interview. He has the gift of chatter, but more than that he looks like he enjoys it. At one point, as we pass the allotments, he tells the manager about his herb garden at home, the satisfaction he gets from growing tarragon and rosemary and thyme. She looks enchanted.

Such homely domesticity is not what you might expect from this former leader of the Irish Republican Army, who claims to have left the organisation in 1974 but whom no one believes. It is widely thought that he remained involved at the highest level throughout the 1980s and into the 1990s.

He is associated with years of violence, and has been accused of having a hand in the murders of civilians and soldiers. In 1993, the ITV investigative documentary The Cook Report suggested that McGuinness had encouraged the informer Frank Hegarty to return to Derry from a safe house in London, promising that he wouldn't be hurt. Hegarty came back and was soon murdered. He has also been linked to the 1990 death of Patsy Gillespie, a Catholic cook for the British army who, after his family was taken hostage, was forced to drive a bomb-loaded truck into a Derry army barracks, killing himself and five servicemen. (McGuinness denies any involvement in either case.) A few days before we meet, McGuinness has been confronted by the son of an Irish soldier, Patrick Kelly, killed by the IRA in 1983. These violent deaths are still close, still remembered.

McGuinness has since become a figurehead for peace, as Sinn Fein's lead negotiator in the long process leading to the Good Friday Agreement in April 1998, and then, following the St Andrews Agreement of 2006, as deputy first minister of Northern Ireland, serving first under Ian Paisley and then Peter Robinson. Paisley and McGuinness, once consumed by mutual loathing, became something approaching friends (an Ulster Unionist nicknamed them the Chuckle Brothers).

In his 2008 book Great Hatred, Little Room, Jonathan Powell, Tony Blair's chief of staff, describes the highly charged early meetings they had with Gerry Adams and McGuinness (Powell's brother Charles, a foreign affairs adviser to Margaret Thatcher when she was prime minister, had been on an IRA hit list for seven years): "It was a curiosity to meet people who had been demonised throughout my adult life. Television had not even been able legally to broadcast their voices and so for years the slightly threatening, bearded face of Adams and the clear, chilling eyes of McGuinness had been overlaid by the voices of actors." But there they both were, sitting in front of him, far more flexible, "articulate and interesting" than he had expected.

This is the side of his political life that McGuinness wants the Irish people to remember: the reformed man, the young, hot-headed idealist who learned the error of his ways and forged peace, an achievement that still wins him plaudits from around the world (his campaign website features photographs of him with Barack Obama and Nelson Mandela). To some in Ireland he is a hero - a man who stood up for the oppressed, who fought the British. To others, he was, is and will always be a criminal.

When we talk later on, after a rally in central Dublin, McGuinness concedes that he never thought he would stand for the presidency; that it would be his name printed on the side of a huge campaign bus. Sinn Fein, now the third-largest party in Ireland after the collapse of Fianna Fail in last February's general election, lacked a candidate. Gerry Adams ruled himself out; McGuinness was asked and, after much deliberation, said yes. What convinced him? "The dire state of the economy in the south and the need to stand up against the selfish and the greedy; those people who awarded themselves the big salaries, the big pensions and the big bonuses, effectively plunging the people of this country into misery and despair."

He knew that his opponents would relish dragging up his past. "I was prepared that people who felt that their position was threatened by entry into the race would stoop to any tactic to try to undermine the campaign," he says. "But you know, isn't it amazing that many of us have made peace with each other from the north and are working together to build a better future, yet we've seen a reaction to my involvement in this election from people who have yet to understand the art of peacemaking?"

This is his tactic: after any mention of his violent past, McGuinness reminds you of what came next - his status as a peacemaker. Who else among the candidates (they include the Irish-American singer and Eurovision contest winner Dana Scallon and an Irish Dragons' Den panellist, Seán Gallagher) has secured a peace deal ending years of conflict? McGuinness has unveiled other tricks, too. He has refused, as a symbolic gesture, to take his full salary if elected, proposing to take the average industrial wage instead and use the surplus to rescue six young people from the dole queue, funding their employment.

Such ideas chime well at our next stop on the campaign trail, a drug addiction centre in Irishtown, a poor neighbourhood in east Dublin. He listens to the former addicts who depend on the centre to stay clean and then to a speech from its manager about how funding cuts will threaten the service. He invites them all to the president's house once he's inside. "I'll be the voice of the voiceless," he promises.

There are more photos, more handshakes. With all the hugs and smiles, children thrust into his arms, it's closer to a US campaign than the awkwardly staged encounters of a British election. To these people, McGuinness - despite his suit and tie - is somewhere between a war hero and aged rock star.

After we leave the centre, he slips away with his advisers to rest before the evening event, a rally at the Mansion House in the centre of the city. He has been on the move since morning, travelling, meeting and greeting, and this will be a grand occasion: a roll-call of Irish celebrities, from sportsmen to Hollywood actors, is due to endorse him in front of the audience of 400. Long before he arrives, the media are once again on the pavement outside, waiting. As before, he makes a walking entrance, in classic politician-at-ease style, this time accompanied by his wife, Bernadette, and two sons. They stand in front of the banks of photographers, blinking into the flashes. As I follow him into the main hall, the swelling roar erupts as he enters, the large crowd up on its feet, music soaring over the noise.

The photographers race to snap him embracing Adams, who is sitting on the front row. It feels like a festival - there are whole families here, children on their fathers' shoulders, girls dressed up, old men cheering. On stage, the actor Colm Meaney (Star Trek, The Commitments) presides, introducing folk musicians, a hurler and a footballer, among others, all of whom make speeches of support.

At the climax of the long evening, McGuinness is summoned to the stage. He calms the feverish crowd. His oratorical style is understated; he's no grandstander, no tub-thumper. The speech is delivered quietly, evenly, and the best parts are the most personal - even one of his advisers confides that his attempts at rabble-rousing and policy prescription fall a little flat. The guests are most engaged when his voice drops and he tells the story of his life: born in 1950 on the Bogside in Derry, his father a foundry worker and devout Catholic who took communion every day, his mother a worker in a shirt factory. His parents, he says, supported him even when he joined the IRA as a teenager.

By the age of 21, he was second-in-command of the IRA in Derry and was convicted in 1973 by the Republic of Ireland's Special Criminal Court after being caught with a car full of explosives and ammunition. He was given a six-month sentence. The following year, he married Bernadette after they were introduced by a friend, Colm, who always dressed like a Bay City Roller, and was later shot dead by a British soldier. He sounds choked at the memory. As if in direct response to his hounding in the television debate last night and the accusations in the newspapers over the past month, he squares up to the doubts, describing the years of oppression he and his friends in Derry endured at the hands of the British and the Royal Ulster Constabulary. "I would have been ashamed not to join the IRA," he says. The statement is met with whistles and long, warm applause.

At the end of the speech, the music kicks in, the audience rises and the hurler, the footballer and all the other speakers join him on stage as streamers fall from the ceiling. One of his advisers leads me up to a gallery, away from the fray, and we watch from above as McGuinness says hello to anyone who approaches while a press officer helplessly tries to extract him from the teeming admirers. Eventually he comes up, wearing the glassy-eyed stare of a man who has just emerged from bright lights and a boisterous crowd. I ask him if he feels like a different person from the man he described in his speech, the teenager who joined the IRA.

“When I was 21 years of age I never thought I'd live to 25," he replies. "We lived in a war zone - it was absolutely terrible. There is nothing glorious or great about war." It's a more humble tone from the mock-heroism of earlier. "I'm just glad that I've been part of what is, I suppose, a very small group of people who have effectively brought that to an end."

His task now, he says, is to unify Ireland, for north and south to become one country - a mission that will be thwarted at every turn by the unionists in the north. How can he deliver on such a promise? McGuinness describes it as "a process of evolution". Already, he says, "we have united the people of Ireland behind peace. And we have united the people of Ireland against violence. We're part of the All-Ireland Ministerial Council, the North/South Ministerial Council, where we meet with our counterparts in Dublin." He plans, if elected, to implement a ten-year period of reconciliation, an extension of the community work he has already done in the north with the Presbyterian minister David Latimer and the Catholic priest Michael Canny. Even if true unity is a distant dream, he feels he can get close symbolically.

We don't have long to talk. I ask him if he's still in touch with Blair ("He sent me a Christmas card," he laughs, and then hotly denounces Blair's Iraq misadventure), but his press officer is anxious to take him away. Every minute on the campaign is accounted for, and though it is late and he's tired, McGuinness's engagements are not over yet. We talk about his love of poetry - his heroes are Patrick Kavanagh and Seamus Heaney - and about how he no longer has much time to write his own. Then he is whisked down the stairs and out of the hall.

I watch him go and hang behind until I'm the only one left apart from the technicians dismantling the stage and the caretakers sweeping up the streamers. But when I walk out of the hall, there is the press officer, sitting on the wall with a look of surrender on his face, and behind him is McGuinness, being collared by an elderly supporter to whom he is listening carefully, taking in every word, nodding and agreeing and still, after all this time, somehow smiling.

Sophie Elmhirst is an assistant editor of the New Statesman

Sophie Elmhirst is features editor of the New Statesman

This article first appeared in the 24 October 2011 issue of the New Statesman, The art of lying

MILES COLE
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The new Brexit economics

George Osborne’s austerity plan – now abandoned by the Tories – was the most costly macroeconomic policy mistake since the 1930s.

George Osborne is no longer chancellor, sacked by the post-Brexit Prime Minister, Theresa May. Philip Hammond, the new Chancellor, has yet to announce detailed plans but he has indicated that the real economy rather than the deficit is his priority. The senior Conservatives Sajid Javid and Stephen Crabb have advocated substantial increases in public-sector infrastructure investment, noting how cheap it is for the government to borrow. The argument that Osborne and the Conservatives had been making since 2010 – that the priority for macroeconomic policy had to be to reduce the government’s budget deficit – seems to have been brushed aside.

Is there a good economic reason why Brexit in particular should require abandoning austerity economics? I would argue that the Tory obsession with the budget deficit has had very little to do with economics for the past four or five years. Instead, it has been a political ruse with two intentions: to help win elections and to reduce the size of the state. That Britain’s macroeconomic policy was dictated by politics rather than economics was a precursor for the Brexit vote. However, austerity had already begun to reach its political sell-by date, and Brexit marks its end.

To understand why austerity today is opposed by nearly all economists, and to grasp the partial nature of any Conservative rethink, it is important to know why it began and how it evolved. By 2010 the biggest recession since the Second World War had led to rapid increases in government budget deficits around the world. It is inevitable that deficits (the difference between government spending and tax receipts) increase in a recession, because taxes fall as incomes fall, but government spending rises further because benefit payments increase with rising unemployment. We experienced record deficits in 2010 simply because the recession was unusually severe.

In 2009 governments had raised spending and cut taxes in an effort to moderate the recession. This was done because the macroeconomic stabilisation tool of choice, nominal short-term interest rates, had become impotent once these rates hit their lower bound near zero. Keynes described the same situation in the 1930s as a liquidity trap, but most economists today use a more straightforward description: the problem of the zero lower bound (ZLB). Cutting rates below this lower bound might not stimulate demand because people could avoid them by holding cash. The textbook response to the problem is to use fiscal policy to stimulate the economy, which involves raising spending and cutting taxes. Most studies suggest that the recession would have been even worse without this expansionary fiscal policy in 2009.

Fiscal stimulus changed to fiscal contraction, more popularly known as austerity, in most of the major economies in 2010, but the reasons for this change varied from country to country. George Osborne used three different arguments to justify substantial spending cuts and tax increases before and after the coalition government was formed. The first was that unconventional monetary policy (quantitative easing, or QE) could replace the role of lower interest rates in stimulating the economy. As QE was completely untested, this was wishful thinking: the Bank of England was bound to act cautiously, because it had no idea what impact QE would have. The second was that a fiscal policy contraction would in fact expand the economy because it would inspire consumer and business confidence. This idea, disputed by most economists at the time, has now lost all credibility.

***

The third reason for trying to cut the deficit was that the financial markets would not buy government debt without it. At first, this rationale seemed to be confirmed by events as the eurozone crisis developed, and so it became the main justification for the policy. However, by 2012 it was becoming clear to many economists that the debt crisis in Ireland, Portugal and Spain was peculiar to the eurozone, and in particular to the failure of the European Central Bank (ECB) to act as a lender of last resort, buying government debt when the market failed to.

In September 2012 the ECB changed its policy and the eurozone crisis beyond Greece came to an end. This was the main reason why renewed problems in Greece last year did not lead to any contagion in the markets. Yet it is not something that the ECB will admit, because it places responsibility for the crisis at its door.

By 2012 two other things had also become clear to economists. First, governments outside the eurozone were having no problems selling their debt, as interest rates on this reached record lows. There was an obvious reason why this should be so: with central banks buying large quantities of government debt as a result of QE, there was absolutely no chance that governments would default. Nor have I ever seen any evidence that there was any likelihood of a UK debt funding crisis in 2010, beyond the irrelevant warnings of those “close to the markets”. Second, the austerity policy had done considerable harm. In macroeconomic terms the recovery from recession had been derailed. With the help of analysis from the Office for Budget Responsibility, I calculated that the GDP lost as a result of austerity implied an average cost for each UK household of at least £4,000.

Following these events, the number of academic economists who supported austerity became very small (they had always been a minority). How much of the UK deficit was cyclical or structural was irrelevant: at the ZLB, fiscal policy should stimulate, and the deficit should be dealt with once the recession was over.

Yet you would not know this from the public debate. Osborne continued to insist that deficit reduction be a priority, and his belief seemed to have become hard-wired into nearly all media discussion. So perverse was this for standard macroeconomics that I christened it “mediamacro”: the reduction of macroeconomics to the logic of household finance. Even parts of the Labour Party seemed to be succumbing to a mediamacro view, until the fiscal credibility rule introduced in March by the shadow chancellor, John McDonnell. (This included an explicit knockout from the deficit target if interest rates hit the ZLB, allowing fiscal policy to focus on recovering from recession.)

It is obvious why a focus on the deficit was politically attractive for Osborne. After 2010 the coalition government adopted the mantra that the deficit had been caused by the previous Labour government’s profligacy, even though it was almost entirely a consequence of the recession. The Tories were “clearing up the mess Labour left”, and so austerity could be blamed on their predecessors. Labour foolishly decided not to challenge this myth, and so it became what could be termed a “politicised truth”. It allowed the media to say that Osborne was more competent at running the economy than his predecessors. Much of the public, hearing only mediamacro, agreed.

An obsession with cutting the deficit was attractive to the Tories, as it helped them to appear competent. It also enabled them to achieve their ideological goal of shrinking the state. I have described this elsewhere as “deficit deceit”: using manufactured fear about the deficit to achieve otherwise unpopular reductions in public spending.

The UK recovery from the 2008/2009 recession was the weakest on record. Although employment showed strong growth from 2013, this may have owed much to an unprecedented decline in real wages and stagnant productivity growth. By the main metrics by which economists judge the success of an economy, the period of the coalition government looked very poor. Many economists tried to point this out during the 2015 election but they were largely ignored. When a survey of macroeconomists showed that most thought austerity had been harmful, the broadcast media found letters from business leaders supporting the Conservative position more newsworthy.

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In my view, mediamacro and its focus on the deficit played an important role in winning the Conservatives the 2015 general election. I believe Osborne thought so, too, and so he ­decided to try to repeat his success. Although the level of government debt was close to being stabilised, he decided to embark on a further period of fiscal consolidation so that he could achieve a budget surplus.

Osborne’s austerity plans after 2015 were different from what happened in 2010 for a number of reasons. First, while 2010 austerity also occurred in the US and the eurozone, 2015 austerity was largely a UK affair. Second, by 2015 the Bank of England had decided that interest rates could go lower than their current level if need be. We are therefore no longer at the ZLB and, in theory, the impact of fiscal consolidation on demand could be offset by reducing interest rates, as long as no adverse shocks hit the economy. The argument against fiscal consolidation was rather that it increased the vulnerability of the economy if a negative shock occurred. As we have seen, Brexit is just this kind of shock.

In this respect, abandoning Osborne’s surplus target makes sense. However, there were many other strong arguments against going for surplus. The strongest of these was the case for additional public-sector investment at a time when interest rates were extremely low. Osborne loved appearing in the media wearing a hard hat and talked the talk on investment, but in reality his fiscal plans involved a steadily decreasing share of public investment in GDP. Labour’s fiscal rules, like those of the coalition government, have targeted the deficit excluding public investment, precisely so that investment could increase when the circumstances were right. In 2015 the circumstances were as right as they can be. The Organisation for Economic Co-operation and Development, the International Monetary Fund and pretty well every economist agreed.

Brexit only reinforces this argument. Yet Brexit will also almost certainly worsen the deficit. This is why the recent acceptance by the Tories that public-sector investment should rise is significant. They may have ­decided that they have got all they could hope to achieve from deficit deceit, and that now is the time to focus on the real needs of the economy, given the short- and medium-term drag on growth caused by Brexit.

It is also worth noting that although the Conservatives have, in effect, disowned Osborne’s 2015 austerity, they still insist their 2010 policy was correct. This partial change of heart is little comfort to those of us who have been arguing against austerity for the past six years. In 2015 the Conservatives persuaded voters that electing Ed Miliband as prime minister and Ed Balls as chancellor was taking a big risk with the economy. What it would have meant, in fact, is that we would already be getting the public investment the Conservatives are now calling for, and we would have avoided both the uncertainty before the EU referendum and Brexit itself.

Many economists before the 2015 election said the same thing, but they made no impact on mediamacro. The number of economists who supported Osborne’s new fiscal charter was vanishingly small but it seemed to matter not one bit. This suggests that if a leading political party wants to ignore mainstream economics and academic economists in favour of simplistic ideas, it can get away with doing so.

As I wrote in March, the failure of debate made me very concerned about the outcome of the EU referendum. Economists were as united as they ever are that Brexit would involve significant economic costs, and the scale of these costs is probably greater than the average loss due to austerity, simply because they are repeated year after year. Yet our warnings were easily deflected with the slogan “Project Fear”, borrowed from the SNP’s nickname for the No campaign in the 2014 Scottish referendum.

It remains unclear whether economists’ warnings were ignored because they were never heard fully or because they were not trusted, but in either case economics as a profession needs to think seriously about what it can do to make itself more relevant. We do not want economics in the UK to change from being called the dismal science to becoming the “I told you so” science.

Some things will not change following the Brexit vote. Mediamacro will go on obsessing about the deficit, and the Conservatives will go on wanting to cut many parts of government expenditure so that they can cut taxes. But the signs are that deficit deceit, creating an imperative that budget deficits must be cut as a pretext for reducing the size of the state, has come to an end in the UK. It will go down in history as probably the most costly macroeconomic policy mistake since the 1930s, causing a great deal of misery to many people’s lives.

Simon Wren-Lewis is a professor of economic policy at the Blavatnik School of Government, University of Oxford. He blogs at: mainlymacro.blogspot.com

 Simon Wren-Lewis is is Professor of Economic Policy in the Blavatnik School of Government at Oxford University, and a fellow of Merton College. He blogs at mainlymacro.

This article first appeared in the 21 July 2016 issue of the New Statesman, The English Revolt