Russell Brand's replies to contributors: From Russell with love

Behind the scenes at the New Statesman guest edit.

 

From: Russell Brand

To: Daniel Pinchbeck

 

Never have you written more succinctly and irrefutably on this most nebulous and complex of topics. Excellent! Other than your dismissal of the term “Revolution”, which is the magazine’s theme and, I think, a necessary galvanising signifier for the previous generation and the more truculent members of the working class. How like you to be insurgent in a magazine about insurgence.

 

To: Gary Lineker

 

Gary! This is f***ing brilliant. Great vocab, cool swearing, great structure. Keeping possession in an unflustered, enveloping rhythm before scoring – a lovely gag nicked in the six-yard box, right at the death. If only the national side could do that.

The stuff about your personal experience as a young player and your dad’s disappointment at a discipline issue is cool and surprising but makes sense of the “Lineker myth” – I mean story, not myth as in untrue – of you as disciplined and gentlemanly.

I love hearing about the way you supported your sons – that’s really spiritual and sounds like simple good parenting.

I am reminded that I heard you say, when I was a kid, that you never put the ball in the net during the pre-match warm-up because a goal is sacred. That, for me, is where football and poetry intersect, at the point where there is magic beyond what we can understand. I suppose that’s why you lot are superstitious.

I don’t know anything about football. My inability to play the game is one of the great laments of my life – my dad and stepdad were both really good Sunday players and growing up in Essex in the Eighties and not knowing how to trap a ball was like going to school in a bikini. Which I also did.

 

To: Rupert Everett

 

What you have written is the most tender, personal, inclusive, funny, candid piece I’ve ever read on homosexual culture.

A mate of mine’s young relative has recently been diagnosed positive. There is a lot of fear and ignorance around him. I will pass on this gentle chronicle of his history and potentially bright and fun future. Your writing is an antidote to prejudice and fear.

The Wilde motif is f***ing brilliant, the throwaway, self-aware career refs are great fun. Your description of the transition of NYC from utopia to hospice is Dickensian. Emphasis on the first syllable. I like that you wrote it to me, as a letter. I come from a culture that can be surprisingly ignorant around homosexuality. Your candour and spellbinding charm woke me the f*** up.

Obviously like most heterosexual men on meeting you, there was a quick wince of regret that I wasn’t gay. After reading this, I’m seriously considering reverse conversion therapy.

To: Noel Gallagher

Really funny, smart, surprising and not in accordance with my manifesto – which will mean you’re in trouble after the revolution but you’re fine for now.

My prediction: “George Osborne – most slappable man in Britain” will take off and end up on T-shirts.

 

To: Oliver Stone

 

 

As I listened to Jemima reading your piece, I felt the wave of undulating devotion that typically accompanies her voice.

However, I can almost certainly ascribe the sense of fervid, virile, “fight the power”, “f*** the man”, hammer-and-sickle priapism to your writing. It was inspiring and thorough and entertaining and cool. Thank you.

 

To: Alec Baldwin

 

 

Yes, Alec! Yes! An authoritative, rolling, beat, HOWLing hymn of dissent.

I like the bludgeoning body shots of listed transgressions, the optimistic flights into a new, true, concealed narrative. Your naming of the Kennedy assassination as an end of innocence, a commencement of institutionalised deceit, is smart. The revaluation of truth as a prized, perversely neglected commodity is skilful.

I think you’re f***ing great, Alec Baldwin.

 

To: Naomi Klein

 

I received and read with relish (as much relish as one can muster when being politely informed that the planet is undergoing systematic destruction to maintain an imaginary economic idea) your brilliant and provocative piece. This wonderful, precise and accessible article is what the issue needed and validates the decision to go with such a potentially amorphous topic as “revolution”.

What you’ve written is galvanising , original and inspiring. I’ve not written anything yet but I’m so amped up on Klein-engendered fervour, I might instead throw my laptop through Powergen HQ’s windows. I read No Logo when I was in the foothills of my junkie-dom. I was in Cuba, coincidentally, flooded by anti-establishment rage. Had I not been high I could’ve got in trouble – they’re surprisingly strict there!

Reading your article made me feel the charge, the fuel, the kick that we can and must take action. I like that feeling, Naomi (especially now I’m not allowed drugs); it is in fact the feeling I live for. One of two feelings I live for . . . The other one is in fact summoning me now.

 

To: Judd Apatow

 

Thank you, Judd. Obviously your success, aside from the more starkly clown-based Anchorman and Cable Guy-type movies, is to a large degree based on your remarkable ability to infuse comedy with personal truth.

This piece of writing, though, has a rawness and innocence that I find very touching beyond what I’m accustomed to in your milieu. Comedy saved my life, too. Sometimes when I’m on the precipice, when I feel, even now, that I am that unselectable little boy, a joke comes, and humour sweeps me into its gangly arms and saves me.

Comedy is a retort to oppression, corruption and even death. It saved me when I was alone at home, at school, and every lonely, destitute place I’ve ever been in since. And now, when everything is actually OK and I still get down, comedy reminds me how silly I am, how silly it all is.

 

To: Diablo Cody

 

Beautiful writing, gentle, humorous, elegantly structured.

If there were Oscars for journalism, you’d have even more clutter in your downstairs loo.

 

To: John Rogers

 

John. We are friends. Proper, not pretend, to-the end friends.

Therefore I take you for granted. But that piece of writing surprised and excited me, mate. The simple unpretentiousness of walking as a revolutionary act.

What I found most remarkable, John, was the strength of your writing: purposeful, confident, strident and assured. It is my belief that it is this manner of authority and ease that is required for the advancement of our ideals.

 

To: David DeGraw

 

Clear as crystal, as sharp as broken glass, as explosive as a Molotov cocktail. There is some great writing in the issue, mate; but this spells out, in the dominant language of economics and in cold, hard numbers, the necessity for action.

 

To: Shepard Fairey

 

That image is f***ing spectacular. The comedy of the bulb, the literalism of the brain. This is why I call you the most relevant living artist. F*** the bourgeoisie, long live the revolution.

Russell holds the artwork for his guest edit's cover. Image: Kalpesh Lathigra

Russell Brand guest-edited the New Statesman in October 2013. Find him on Twitter: @rustyrockets.

This article first appeared in the 23 October 2013 issue of the New Statesman, Russell Brand Guest Edit

Getty
Show Hide image

We're racing towards another private debt crisis - so why did no one see it coming?

The Office for Budget Responsibility failed to foresee the rise in household debt. 

This is a call for a public inquiry on the current situation regarding private debt.

For almost a decade now, since 2007, we have been living a lie. And that lie is preparing to wreak havoc on our economy. If we do not create some kind of impartial forum to discuss what is actually happening, the results might well prove disastrous. 

The lie I am referring to is the idea that the financial crisis of 2008, and subsequent “Great Recession,” were caused by profligate government spending and subsequent public debt. The exact opposite is in fact the case. The crash happened because of dangerously high levels of private debt (a mortgage crisis specifically). And - this is the part we are not supposed to talk about—there is an inverse relation between public and private debt levels.

If the public sector reduces its debt, overall private sector debt goes up. That's what happened in the years leading up to 2008. Now austerity is making it happening again. And if we don't do something about it, the results will, inevitably, be another catastrophe.

The winners and losers of debt

These graphs show the relationship between public and private debt. They are both forecasts from the Office for Budget Responsibility, produced in 2015 and 2017. 

This is what the OBR was projecting what would happen around now back in 2015:

This year the OBR completely changed its forecast. This is how it now projects things are likely to turn out:

First, notice how both diagrams are symmetrical. What happens on top (that part of the economy that is in surplus) precisely mirrors what happens in the bottom (that part of the economy that is in deficit). This is called an “accounting identity.”

As in any ledger sheet, credits and debits have to match. The easiest way to understand this is to imagine there are just two actors, government, and the private sector. If the government borrows £100, and spends it, then the government has a debt of £100. But by spending, it has injected £100 more pounds into the private economy. In other words, -£100 for the government, +£100 for everyone else in the diagram. 

Similarly, if the government taxes someone for £100 , then the government is £100 richer but there’s £100 subtracted from the private economy (+£100 for government, -£100 for everybody else on the diagram).

So what implications does this kind of bookkeeping have for the overall economy? It means that if the government goes into surplus, then everyone else has to go into debt.

We tend to think of money as if it is a bunch of poker chips already lying around, but that’s not how it really works. Money has to be created. And money is created when banks make loans. Either the government borrows money and injects it into the economy, or private citizens borrow money from banks. Those banks don’t take the money from people’s savings or anywhere else, they just make it up. Anyone can write an IOU. But only banks are allowed to issue IOUs that the government will accept in payment for taxes. (In other words, there actually is a magic money tree. But only banks are allowed to use it.)

There are other factors. The UK has a huge trade deficit (blue), and that means the government (yellow) also has to run a deficit (print money, or more accurately, get banks to do it) to inject into the economy to pay for all those Chinese trainers, American iPads, and German cars. The total amount of money can also fluctuate. But the real point here is, the less the government is in debt, the more everyone else must be. Austerity measures will necessarily lead to rising levels of private debt. And this is exactly what has happened.

Now, if this seems to have very little to do with the way politicians talk about such matters, there's a simple reason: most politicians don’t actually know any of this. A recent survey showed 90 per cent of MPs don't even understand where money comes from (they think it's issued by the Royal Mint). In reality, debt is money. If no one owed anyone anything at all there would be no money and the economy would grind to a halt.

But of course debt has to be owed to someone. These charts show who owes what to whom.

The crisis in private debt

Bearing all this in mind, let's look at those diagrams again - keeping our eye particularly on the dark blue that represents household debt. In the first, 2015 version, the OBR duly noted that there was a substantial build-up of household debt in the years leading up to the crash of 2008. This is significant because it was the first time in British history that total household debts were higher than total household savings, and therefore the household sector itself was in deficit territory. (Corporations, at the same time, were raking in enormous profits.) But it also predicted this wouldn't happen again.

True, the OBR observed, austerity and the reduction of government deficits meant private debt levels would have to go up. However, the OBR economists insisted this wouldn't be a problem because the burden would fall not on households but on corporations. Business-friendly Tory policies would, they insisted, inspire a boom in corporate expansion, which would mean frenzied corporate borrowing (that huge red bulge below the line in the first diagram, which was supposed to eventually replace government deficits entirely). Ordinary households would have little or nothing to worry about.

This was total fantasy. No such frenzied boom took place.

In the second diagram, two years later, the OBR is forced to acknowledge this. Corporations are just raking in the profits and sitting on them. The household sector, on the other hand, is a rolling catastrophe. Austerity has meant falling wages, less government spending on social services (or anything else), and higher de facto taxes. This puts the squeeze on household budgets and people are forced to borrow. As a result, not only are households in overall deficit for the second time in British history, the situation is actually worse than it was in the years leading up to 2008.

And remember: it was a mortgage crisis that set off the 2008 crash, which almost destroyed the world economy and plunged millions into penury. Not a crisis in public debt. A crisis in private debt.

An inquiry

In 2015, around the time the original OBR predictions came out, I wrote an essay in the Guardian predicting that austerity and budget-balancing would create a disastrous crisis in private debt. Now it's so clearly, unmistakably, happening that even the OBR cannot deny it.

I believe the time has come for there be a public investigation - a formal public inquiry, in fact - into how this could be allowed to happen. After the 2008 crash, at least the economists in Treasury and the Bank of England could plausibly claim they hadn't completely understood the relation between private debt and financial instability. Now they simply have no excuse.

What on earth is an institution called the “Office for Budget Responsibility” credulously imagining corporate borrowing binges in order to suggest the government will balance the budget to no ill effects? How responsible is that? Even the second chart is extremely odd. Up to 2017, the top and bottom of the diagram are exact mirrors of one another, as they ought to be. However, in the projected future after 2017, the section below the line is much smaller than the section above, apparently seriously understating the amount both of future government, and future private, debt. In other words, the numbers don't add up.

The OBR told the New Statesman ​that it was not aware of any errors in its 2015 forecast for corporate sector net lending, and that the forecast was based on the available data. It said the forecast for business investment has been revised down because of the uncertainty created by Brexit. 

Still, if the “Office of Budget Responsibility” was true to its name, it should be sounding off the alarm bells right about now. So far all we've got is one mention of private debt and a mild warning about the rise of personal debt from the Bank of England, which did not however connect the problem to austerity, and one fairly strong statement from a maverick columnist in the Daily Mail. Otherwise, silence. 

The only plausible explanation is that institutions like the Treasury, OBR, and to a degree as well the Bank of England can't, by definition, warn against the dangers of austerity, however alarming the situation, because they have been set up the way they have in order to justify austerity. It's important to emphasise that most professional economists have never supported Conservative policies in this regard. The policy was adopted because it was convenient to politicians; institutions were set up in order to support it; economists were hired in order to come up with arguments for austerity, rather than to judge whether it would be a good idea. At present, this situation has led us to the brink of disaster.

The last time there was a financial crash, the Queen famously asked: why was no one able to foresee this? We now have the tools. Perhaps the most important task for a public inquiry will be to finally ask: what is the real purpose of the institutions that are supposed to foresee such matters, to what degree have they been politicised, and what would it take to turn them back into institutions that can at least inform us if we're staring into the lights of an oncoming train?