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Seymour Hersh-extended interview

A longer version of this week's NS interview

Is it always a journalist's duty to report the truth, even if it may damage innocents?
I'm a total First Amendment Jeffersonian. It's their job to keep it secret and my job to find it out and make it public. But once one gets some information, one doesn't run pell-mell into it. You spend some time making sure just what the downside is. At the New York Times in particular, I had the experience of telling the intelligence community: "I'm going to do this, and if you have people in harm's way, we're going to do this in a few days -- get them out." But most of the time it's not that dramatic.

You know, maybe six or seven times in 40 years I've had a story and I've communicated to the government what I'm doing, which we always do, and the president or the secretary of defence has called up my editor or publisher and said: "If you write this story, American national security will be damaged." And in every case except one where we delayed briefly, we wrote the story and, son-of-a-bitch, the Russians didn't launch paratroopers into the foothills of San Francisco the next day. At a certain point this claim about national security becomes something more. It's always political security.

Are there times when you have a scoop, or a piece of information, but let it go?
You're constantly not publishing everything you know. That's part of the game. You leverage what you know and sometimes you'll have a phrase that will indicate to someone on the inside that you really know more than you're writing. It's a self-protection measure. Sometimes if I'm into a sensitive story . . . it's hard to talk about this stuff -- but sometimes I'll indicate I know more.

For example, some kinds of intelligence are useless to us. Suppose one were to determine where the American attack submarines with nuclear arms are at any given time. How useless is that to a newspaperman? Some of the most secret secrets in the government are not very useful. But sometimes it is useful to tell people more than you actually write, to negotiate language with the other side -- that is, the government. Sometimes we don't do that. I'll add that this administration is actually more pleasant to deal with, because, unlike the Reagan-Bush years, they are not either taunting you or threatening you. The people I have dealt with here at a high level are almost rational. There's nothing quite as arrogant as somebody who thinks he's seen all the secrets.

Look, let's say you're a major player in a law firm billing $1m-$2m a year and you come down to $160,000 a year to work inside. What's it all about? It's all about: "My God, I really know what's going on. I've seen the top-secret stuff from the intercepts and the CIA. And then some punk reporter comes in and knows something he shouldn't know and I'm a person raged, not only because he knows it, but because that's what I'm in this job for -- I wanna know." I actually had people say to me during the Vietnam war when I was getting very critical -- I was just then working for a wire service (AP) -- I had people say to me: "If you only knew what I know, you would know how wrong you are." It's a cliché to say it, but it's true: they really do get it into their heads that they know more than you.

Do you ever worry that your phone is bugged?
Some people I only talk to in their home or their office, but I arrange the calls here. Even in the Nixon/Bush years, I could say this: there are certain people I would call on a Sunday morning at their home from my home. We'd have very good talks, and it's a very good time to work for me. I can't call people at their office. And as long as they were talking to me from their home on a Sunday morning about stuff, I would feel comfortable. If somebody suddenly stopped talking to me on a home phone . . . To bug me legally they'd have to get a warrant. Bush and Cheney did so many illegal things, but once you have something illegally you can't use it very much. If the 9/11 attacks taught us one thing, it's that the agencies collect lots of wonderful stuff they don't share with anybody.

You rely a lot on unnamed sources. Is that a dangerous technique, or an invaluable one?
Look at the serious press in the UK, France, America: every single day there are unnamed sources. I love the notion that somehow investigative reporters are held to a higher standard with unnamed sources.

My view is that I'm glad we don't have the British standard. In America we have this wonderful notion that you have to prove malicious intent. In England it is more difficult: you have to be just wrong -- it doesn't matter what your intent is. But I believe people in my profession should be held to an extremely high standard. I welcome the fact that people can sue me and go after me. I know American reporters who have described an unnamed senior CIA official and I knew . . . the name of the person they were not naming -- and the reason they didn't name him is that he had a certain bias which would have mitigated the story.

That happens all the time. It happened when I worked at the New York Times and I'm sure it happens elsewhere - people will have a source, but if they named him denouncing, let's say, the Bush administration, if you said who he was, he would be devalued. And by saying "a higher-level former senior intelligence official" you can cover that. I hate that. Therefore, the way in my own mind that I cope with that anomaly, that disgrace, if you will, is that I say I welcome people suing me.

I've been in a lot of litigation. I welcome that on the grounds that it is an appropriate measure. I think I've been in seven. We were in court once and the critical issue was that the judge was going to make me reveal my sources. I was going to have to say that we conceded the point and be found guilty of libel. The judge was a Reagan appointee in Chicago a couple of decades ago, and the Reagan appointee ruled that I didn't have to name sources. I went on camera and we went to the judge, and we gave an account of six people and gave a description of them, and the judge accepted that they were real -- that I was serious and I had sources. But if he hadn't, I think I would have had to concede the case.

How bad are British libel laws?
I had one case involving [Robert] Maxwell, a famous case in 1981 in England, after I wrote a book called The Samson Option. Basically, the British press had me accusing the former publisher of being an Israeli agent. I didn't quite say that -- he was an asset, he wasn't a spy; he just did what they asked him in one case. And we were sued to death and won a huge settlement. So my one experience with the law was fine.

Do you find the libel laws in the UK chilling?
There's no question -- D-notices are chilling. You guys have a very tough system. Every time someone goes up against it in England they end up in jail.

Isn't there a risk that some high-level sources might be "playing" you?
Of course, that's a categorical risk. I'm doing something sensitive this morning, and there's no question some may have . . . But I consider myself a full-service agency. You can come to me with a secret and I take it to other people and learn things about what you know . . . You have something that they call "compartmented intelligence", above top-secret. You come to me with a secret, and then I write a story that includes things you didn't know. So when the government assesses what I wrote to see who could have leaked it, you're not ever considered to be someone who could have, because they know that you (because of you and your compartment) could not have known what was published by the other compartment. You can come to me with compartmented information and I can go to other people with compartmented information and make it very hard for them to come to a conclusion about who could have been leaking. It's foolproof.

How have you managed to remain an outsider for so long when, for example, Bob Woodward, another great journalist of your generation, has gone mainstream?
There's no way they would deal with me. Bob Woodward, I disagree with his point of view. He starts at the top and goes down. But if he hadn't written, for example, that first Bush book, we wouldn't have known much about Bush's thinking. I think Bob's books sometimes tell a lot more than he may think they do. I'm not saying anything I haven't said to him -- I just wouldn't do it the way he does it. The Obama White House can't abide me. Within a month, they were going behind my back to my editor: "What's your man Hersh doing?"

What do you make of Barack Obama?
Don't get me going on Obama. If he decided to be a one-term president, he could be marvellous, but it's not clear he's decided that.

Did he deserve the Nobel Peace Prize?
Well, no, of course not. It was partly an embarrassment to him and it says more about the people in Sweden [sic]. Let me just say this to you quite seriously. There are people -- for example, one of the defences of [John F] Kennedy was that [Ted] Sorensen and Arthur Schlesinger said publicly that he was for sure going to get out of Vietnam after the election in '64. He couldn't do it then because he was going to run against a Republican. They think that's wonderful. My analysis of that is that this was a president who said I'm more interested in my personal politics and the election than the lives of those that are going to die in the next year. And that's true if he really was going to get out -- he didn't have the courage to get out in '63. That's a political judgement. They're made all the time. Johnson kept on making it. He probably never liked that war but he kept on going.

So with Obama, the question is: will he stay in Afghanistan until he thinks it's the right time to get out politically? Or is he going to take a chance of not getting re-elected and find a way out quickly? It's not such a hard way out. There are people to talk to there. There's no evidence any of them are interested in bombing the World Trade Center.

Do you see shades of Vietnam in the current Afghan war?
No -- only in the sense that an American president is making political judgements about a war for his own personal re-election prospects. But it's a whole different scenario. Yes, in the sense that we could have gone to the North Vietnamese very early in that war. There was serious stuff going on, particularly very early stuff between the North and the Diem brothers, and we stopped that by getting them killed. Basically, there's so many ways it doesn't break down, so many ways it's a whole different culture.

On Iran, are we repeating the mistakes that were made on Iraq?
Some of the things are very disturbing. We are getting new leadership at the International Atomic Energy Agency. The next wave there is not going to be as rational. So the trend is going to get worse. There's no evidence yet that Iran has violated any of the Nuclear Non-Proliferation Treaty proceedings. By the way, your country is so deeply involved in all this crap. It's amazing to me, as someone who went to the Vietnam war and Iraq war, and now the Afghan war. There's simply no learning curve.

The great [writer] Harold Pinter gave a speech on 15 October 2002. He began by telling an old story about Cromwell. The citizens are all brought to the main square and he announces: "Right, kill all the women and rape all the men. His aide says to him, "Excuse me, general, isn't it the other way around?" And a voice in the crowd calls out: "Mr Cromwell knows what he's doing." And Pinter said, "The voice is the voice of Tony Blair: 'Mr Bush knows what he's doing.' " I keep on thinking that about Gordon Brown, too: it's the same voice. If we have to rape the men and kill the women, then by God we will!

Post-Bush, do you think there's still a risk of a military strike on Iran by Israel or the US?
Yes.

Where do you place yourself on the political spectrum?
I'm your standard left liberal, but I vote for Republicans, I've given money to them. I'm not a pacifist. I would have been tough on Osama Bin Laden after 9/11, but I'd have done it legally. I would have done what the Indians did in Mumbai, what the Spanish did in Madrid after the train incident -- treated it as a crime.

Are you disappointed Obama didn't release those "torture pictures"?
I know a lot about this stuff. Let me just talk about hypocrisy for a second. I do believe Obama when he says there were more terrible things done by individuals than we know, and the record is more complete than we know. Obama's position is that, at a time when we have 130,000 Americans in Afghanistan, putting the pictures out would just inflame people to take action against them. The New York Times has been editorialising against him, but when it had a reporter captured, it thought it was perfectly appropriate not to talk about it publicly for seven months, on the grounds that the paper was trying to protect his life.

So I would say here's the president -- about whom I have many reservations, believe me - saying: "I'm gonna not put these out, because I'm going to save American lives." And he's being criticised quite vividly by the New York Times, which had done the same thing for its reporter. I don't like it. So I give him his due on that one. I have to know what it is. It's horrible, but so what? We know the basic story. And so this is one of the examples when I don't write anything I know. Are you kidding me?!

What would you like to forget?
My Lai.

How would you like people to remember you?
I couldn't care less. I don't believe in life after death.

Are we doomed?
The trouble is that hope sprang anew in America last November. And I think the dashing of that hope is going to be much more lethal than even the cynicism under Bush and Cheney. If that hope is dashed, we'll really be in trouble around the world.

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Mehdi Hasan is a contributing writer for the New Statesman and the co-author of Ed: The Milibands and the Making of a Labour Leader. He was the New Statesman's senior editor (politics) from 2009-12.

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.

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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