In this week’s New Statesman: Iraq – Ten years on

Was it worth it?

The Iraq War: Was it worth it?

Featuring: Mehdi Hasan, John Lloyd, Caroline Hawley, Adnan Hussein and Ian Taylor

In our cover story this week, we examine the US-led invasion of Iraq. A decade after more than a million took to the streets of Britain to voice their opposition, five writers express competing views on the conflict that toppled Saddam Hussein and cost hundreds of thousands of lives.

“Iraq is worse off now,” argues Mehdi Hasan. He asserts that the justification “rhetoric” of the then political leaders of Britain and America – Blair, Bush, Powell, Cheney – was “a farrago of lies and half-truths, of delusion and doublethink”.

Not only has “every argument advanced by the hawks proved to be utterly false” but the war has brought chaos, not peace, to the region, “radicalising thousands of young men from the Middle East to the Midlands”.

The Iraq war was a strategic disaster – or, as the Tory minister Kenneth Clarke put it in a recent BBC radio discussion, “the most disas­trous foreign policy decision of my lifetime . . . worse than Suez”.

The invasion and occupation of the country undermined the moral standing of
the western powers; empowered Iran and its proxies; heightened the threat from al-Qaeda at home and abroad; and sent a clear signal to “rogue” regimes that the best . . . means of deterring a pre-emptive, US-led attack was to acquire weapons of mass destruction (see Korea, North) . . .

The greatest weapon of mass destruction turned out to be the invasion itself.

You can read Mehdi Hasan's piece here.

Writing from an opposing viewpoint, the former New Statesman editor John Lloyd argues that “Blair was right”. “I and others who supported the invasion of Iraq a decade ago,” he says, “did so because we thought that Saddam Hussein’s regime was among the worst in the world.”

Despite acknowledging “grave errors” in the early western reports on weapons of mass destruction in Iraq, Lloyd writes:

For the record, I believe that: a) both the US and the UK governments accepted intelligence that pointed to Iraqi possession of WMDs, but interpreted it in the way most favourable to the case for invasion and b) that Blair wished to support the US largely because he had long thought Saddam a major threat . . .

We did not anticipate that Iraqi forces who hated the US – including those loyal to Saddam – would dominate after the invasion, that the population would not be active in ensuring democratic choice . . . and that the west had limited staying power. We were much influenced by Kanan Makiya’s searing book Cruelty and Silence (1993), which detailed the horrors of Iraq under Saddam and called for intervention – an intervention that, the author argued, would be greeted with “sweets and flowers”.

Caroline Hawley was the BBC’s Baghdad correspondent when war broke out in 2003, and she stayed until 2005. Hawley writes that, at the start of the conflict, “the overriding sentiment [of Iraqi civilians] was one of joy at seeing the back of Saddam Hussein” but many have since seen “their hopes dashed”.

A decade on, it is . . . distressing to think how many horrors and burials, kidnappings and bombings lay ahead . . .

Whatever you think about the reasons that led Britain and the US to war, I still wonder how things might have turned out if only the coalition forces had been better prepared, and had been able to show the Iraqis they cared about them . . .

I never again want to see a father run screaming down a hospital corridor holding
a limbless, bloodied child. It is still happening – you just don’t hear about it much any more.

Adnan Hussein, the editor-in-chief and deputy director of the Iraqi newspaper al-Mada, contends that “the US played a damaging role” in rebuilding the Iraqi state.

Hussein describes returning to his home city of Baghdad a few weeks after the fall of Saddam Hussein and his government:

[I told friends in London:] “The Baghdad I left was a glamorous woman in the heyday of her youth; now she is an aged creature on her deathbed.”

I imagined that Baghdad would rejuvenate itself within a few years. Like many fellow exiles, I thought the presence of international forces led by the US would help restore normal conditions in Iraq. Now, ten years on, it seems that Iraq will require another ten years to recover, given the carnage it has witnessed over the past decade.

Ian Taylor, a lecturer at the University of Leicester, offers praise for the 15 February 2003 Stop the War protest, calling it “one of those rare moments in British history when the radical left had some palpable impact on the course of political debate”.

If the march fell a long way short of achieving what so many of us desperately wanted, it wasn’t a complete failure either. This was the day when the message finally got through to Blair and the Conservative opposition that their war was going to be profoundly unpopular . . .

Blair failed to realise this in time (if he ever came to realise it). His reputation has never recovered.

ELSEWHERE IN THE MAGAZINE:

 

Rafael Behr: Lord Snooty v The Gimp; or why politics isn’t a game for the voters of Eastleigh

In the Politics Column this week, Rafael Behr reports from Eastleigh, the Lib-Dem “bastion” that faces a by-election on 28 February following the appalling “shenanigans” of Chris Huhne. Behr talks to Carla and Sheena, two residents of Eastleigh, who sum up the prevailing sentiment by describing David Cameron as “snooty” and Ed Miliband as “a gimp”. Behr comments:

Journalists are the worst offenders when it comes to forgetting that most people, most of the time, ignore the minutiae of political combat . . .

What might come across as ignorance or apathy is better understood as perspective.

Read this piece in full on our website now.

 

Stella Creasy: The final frontier for women

Stella Creasy, the Labour MP for Walthamstow, is our Diary columnist this week. An active campaigner for the global gender equality movement One Billion Rising, she writes:

A billion women will be raped or beaten in their lifetime; [the Vagina Monologues playwright Eve] Ensler wants the same number of people involved in raising awareness by dancing in public on 14 February . . .

Although we are making progress with One Billion Rising, misogyny still seeks to ground us all . . .

When 80 per cent of 11-year-olds in one study by Edinburgh University say it is OK to hit a woman if she’s late with the dinner, we know we have to ensure that every young person wants a partnership based on mutual respect.

Meanwhile, a local resident and space fanatic alerts me that Unilever is running a competition to send people into space – but it is being marketed at men only. It seems we have a new final frontier for feminism . . .

Read her diary piece in full on our website now.

 

Laurie Penny: with Tasers and placards, the women of Egypt are fighting back against sexism

Laurie Penny reports from Cairo on the rampant post-revolution rise in sexual assaults against women and what Egyptian women are doing to fight back.

She meets with OpAntiSH (“Operation Anti-Sexual Harassment”) -- “a gang of volunteers, some of them men and many of them women who’ve been raped and assaulted. OpAntiSH physically stops assaults in Tahrir Square and the surrounding areas, using Tasers, spray paint, fists, force, sticks, anything they can put their hands on to protect women from ‘mob attacks’.”

Penny explains:

For the women of Egypt, freedom from sexist oppression and freedom from state repression are part of the same battle . . .

Egypt is not the only country where women are bearing the brunt of social frustration and public anger. But the women of Egypt and their allies have understood what the rest of the world has failed so far to grasp – that meaningful social progress cannot exclude women. Western journalists using the sex assault pandemic to imply that Egypt somehow isn’t ready for regime change, to imply that Egyptian men are out of control, have fundamentally misunderstood what this revolution is, and what it can be.

In the Critics

The novelist Jeanette Winterson celebrates the transgressive pleasure of Virginia Woolf’s novel Orlando and its origins in Woolf’s affair with Vita Sackville-West (“an unrepentant flirt”).

PLUS

  • In the Books Interview, Jonathan Derbyshire talks to Tracey Thorn of Everything But the Girl about her memoir, Bedsit Disco Queen: How I Grew Up and Tried to Be a Pop Star.
  • Richard Holloway, the former Bishop of Edinburgh, reviews John Gray’s The Silence of Animals: On Progress and Other Modern Myths.
  • George Eaton reviews Unhitched: the Trial of Christopher Hitchens by Richard Seymour
  • Alex Massie reviews On Glasgow and Edinburgh by Robert Crawford
  • Rachel Cooke watches the US remake of House of Cards, starring Kevin Spacey
  • Ryan Gilbey reviews This Is 40, directed by Judd Apatow
  • and much, much more...

Read our full "In the Critics this week" blog post here.

Purchase a copy of this week's New Statesman in newsstands today, or online at: subscribe.newstatesman.com

Charlotte Simmonds is a writer and blogger living in London. She was formerly an editorial assistant at the New Statesman. You can follow her on Twitter @thesmallgalleon.

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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?