Islamophobia and violent extremism: tackling the twin-menace head on

Faith and conviction cannot be burnt by the flames of hatred.

"We should not allow the murder of Lee Rigby to come between Londoners. The unified response we have seen to his death across all communities will triumph over those who seek to divide us", said Met Commissioner Bernard Hogan-Howe, matching his determination with a decision to increase 24-hour police patrols around potentially "vulnerable" locations.

This has reassured London’s wary Muslim population and given a pointed message to potential perpetrators of further attacks on Muslim places in our great city of London.

This decisive step comes after fire-fighters were called to a Darul Uloom boarding school in Chislehurst in south-east London in the early hours of 9 June, the second suspicious fire within a week; almost 130 pupils and staff were evacuated from the religious seminary.

The first fire on 5 June flattened an Islamic centre, run by the Somali Bravanese community in Muswell Hill in north London. The centre was used by the younger generation as a place for learning, as well as by members of the local community for social interaction and physical and spiritual development. Since the shocking incidence the community has been deeply touched by the overwhelming messages of support from local neighbours, politicians, community associations, faith, interfaith and non-faith organisations, as well as numerous individuals.

In our recent visit to the burned down centre we were heartened to see a unique community spirit that has brought people together. The Chairman, traumatised by the destruction of the complex, was full of praise for the London Fire Brigade who took appropriate steps to prevent the fire spreading to neighbours and the Metropolitan Police for laudably reassuring the local community with their physical presence. He was resolute when he said: “Together we will not let this tragic incident divide us. We have lost an important building in our community, but we will remain strong and steadfast and, with the help of all those who have supported us, we will rebuild our community centre. It will once again become a beacon for cohesion, social action and friendship."

Faith and conviction cannot be burnt by the flames of hatred.

With Lee Rigby murder on 22 May our country faces two major political and social challenges of our time that need tough handling by all of us, the government and citizens, with resolve and wisdom – one, the utter criminality cloaked under the guise of politics or religion by a few deranged individuals in the periphery of the Muslim community who are putting the whole community on the dock; and secondly, the violent response from far right activists that frightens Muslims and divisive narrative by some columnists that poisons ordinary people’s mind against the Muslim community.  Both are dangerous and they need to be challenged head on; they feed on each other.

Lee Rigby’s killers were known to be linked with the extremist group (Al-Muhajiroun) that was banned a few years ago. The group re-emerges in variant forms with the same message of hate and as far as I am aware, mosques and Islamic centres up and down the country are a ‘no go area’ for this group; the Muslim community has ostracised them, but sadly some of our national media provide them with disproportionate oxygen of publicity for probably offering sensational news to people.

On the other hand, the far right group (English Defence League) that emerged in 2009 with some football hooligans had organised series of violent protests against mosques across the country. Thankfully, they have also been ostracised by the mainstream society and the political establishment.

In order to defeat this twin-menace w e need to be careful on our words and language; they matter, especially if they come from senior public figures. Our former Prime Minister Tony Blair who has a strong ideological view on Muslim issues (“There is a problem within Islam...”) has recently made a ‘brave assault on Muslim Extremism after Woolwich attack’; this has the potential of further undermining the positive work done by the Muslim community and also giving ammunition to the far right group. Tony Blair took us to a disastrous war against the will of majority British people in 2003; he, according to Prof John Esposito from Georgetown University in Washington, has misread Muslim terrorism.

The root cause that separate people in any society is ignorance that leads to fear of unknown. The local communities across the country generally get on well with one another, due to the fact that there is a lesser amount of ignorance among them and more public interaction in their daily life. They are served by the local police, religious or community centres and other civic organisations.

But, nationally and regionally, we very much need to find creative ways to bring our diverse people together. Pragmatic political decisions by our politicians, more constructive role by our media and judicious comments by powerful individuals are what we need today to spread the message of realistic hope and allay fear of others; we all have a duty to dispel myths surrounding other communities. This needs a clear strategy and inclusive approach by people in authority - political and civil, Muslims and non-Muslims, religious and non-religious.

Downplaying the seriousness of violent extremism or retaliatory anti-Muslim prejudice by any will be a grave mistake.

Dr Muhammad Abdul Bari is former Secretary General of Muslim Council of Britain (2006-10). He is an educationalist, writer and freelance parenting consultant.  Follow him on Twitter @MAbdulBari

 

Fire officers outside the burned down Islamic centre in Muswell Hill, north London. Photograph: Getty Images

Dr Muhammad Abdul Bari is former Secretary General of Muslim Council of Britain (2006-10). He is an educationalist, writer and freelance parenting consultant. Follow him on Twitter @MAbdulBari.

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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?