British politics and culture with an American accent.
It just keeps getting dirtier and dirtier—and that was before this morning’s report that Sean Hoare was found dead in his home. Hoare, a former show business reporter at the News of the World, was the first on-the-record source to allege that British Prime Minister David Cameron’s director of communications, Andy Coulson, actively encouraged reporters to hack into the voicemail accounts of celebrities when he was that paper’s editor. According to a statement by Hertfordshire police: “The death is currently being treated as unexplained, but not thought to be suspicious.” Phew!
Tomorrow (Tuesday, July 19) the billionaire tyrant Rupert Murdoch and his son and designated successor James will testify before the House of Commons Culture, Media and Sport Select Committee. Rebekah Brooks, the former head of News International, Murdoch’s British subsidiary, was also supposed to testify but now may not since she was arrested over the weekend.
Also over the weekend Sir Paul Stephenson, the head of the Metropolitan Police, resigned after it emerged that he had hired Neil “Wolfman” Wallis, a former deputy editor at Murdoch’s now defunct Sunday tabloid the News of the World, as a publicity consultant to the police force. Wallis, who was himself arrested last week, also did public relations work for a health spa favored by Brooks, and which comped the £12,000 cost of the chief’s five-week stay while recovering from surgery this past January. This morning also brought the news that Stephenson’s number two, John Yates, also resigned after Parliament’s Home Affairs committee said it was going to summon him back to explain why, despite being closely questioned by the committee about his relationship with Wallis in March, he never mentioned the consultant deal—which he had signed off on. It was Yates who decided not to reopen the police investigation into phone hacking in July 2009 after the Guardian broke the news that Murdoch had paid out over £1 million to settle three lawsuits that could have revealed the “use of criminal methods to get stories.”
At the time Rupert Murdoch denied any such payments had been made. “If that had happened, I would know about it,” he told a reporter for Bloomberg. We now know that James had personally approved the payments. So one question for James tomorrow ought to be, “When did you tell your father about the settlements?” And one question for Rupert should be, “Were you telling the truth when you said News International had made no payments to settle cases relating to phone hacking, or were you telling the truth when you said if such payments had been made you would have been informed?”
For Nation readers hoping to follow the fun, the BBC has prepared some convenient thumbnail profiles of committee members. Labour member Tom Watson, a longtime Murdoch foe (he successfully sued the Sun for libel in 2009, and has long been a lonely voice urging his fellow legislators to attend to the phone-hacking scandal) should be especially worth watching. Paul Farrelly, another Labour member (and former finance editor of the Observer) also ought to be able to cause the Murdochs considerable discomfort.
The committee chairman, Tory John Whittingdale, deserves credit for forcing the reluctant father and son to appear. But Whittingdale, Margaret Thatcher’s former parliamentary aide, is also Facebook friends with both Rebekah Brooks and Elisabeth Murdoch.
One more fun fact: Conservative member Louise Mensch, who acquired her evocative (at least for Yiddish-speaking readers) surname by marrying Peter Mensch, manager of the bands Metallica and the Red Hot Chili Peppers, is better known as Louise Bagshawe, best-selling author of such chick-lit classics as Venus Envy, Passion, Desire and Destiny.
So what questions should the committee ask? Guardian reporter Nick Davies, who has been both Woodward and Bernstein in this British Watergate, has written a typically lucid piece pointing out that “the task is not simply to ask questions, but to confront the witnesses with the evidence which is already available.” His resume of suggested lines of inquiry is well worth reading—as are the crowd-sourced questions on the Guardian’s blog.
Americans will of course also want to know whether any of the criminal behavior that seems to have been standard procedure at Murdoch’s British titles made its way across the Atlantic. We might also remind British Parliamentarians that if they wonder what Murdoch’s broadcasting would be like without the fetter of parliamentary supervision—and the competitive standards of the BBC for comparison—they need only look at Fox News. If that’s what you want to encourage in Britain, by all means let the Murdochs off easy.
Otherwise the essential questions are really the same as those posed by Fox News president Roger Ailes’s previous employer, Richard Nixon: What did he know? And when did he know it?
Rupert Murdoch may have finally gone too far. For decades the billionaire media baron has relentlessly amassed power on three continents. But it is worth recalling that his first move out of his native Australia—and out from under the shadow of his father, newspaper magnate Sir Keith Murdoch—came in 1969, when he snatched a very downmarket British Sunday title, the News of the World, away from Robert Maxwell. (Maxwell’s fraudulent dealings were still unsuspected, but his Czech Jewish origins were held against him by the paper’s editor, who remarked that the News of the World “was—and should remain—as British as roast beef and Yorkshire pudding.”) In considerable decline from its heyday in the 1950s, when it sold over 8 million copies, the paper Murdoch acquired relied on a mix of kiss and tell stories—the News of the World bought Christine Keeler’s account of her involvement in the Profumo Scandal—and “investigations” of London vice dens, with the exposé typically ending with the line “I made my excuses and left.”
But it was still the biggest-selling English language paper in the world, and though Murdoch steered it even deeper into sleaze—earning him the nickname “the Dirty Digger”—the News of the World and its weekday stablemate, the Sun, which he acquired a year later, supplied the steady profits that enabled Murdoch to build his British empire. (In 2010, a terrible year in the newspaper business, the two titles reported a profit of £86 million.) So there was something not just shocking but brutal about James Murdoch’s announcement that “this Sunday will be the last issue” of the 168-year-old paper.
The immediate cause of the paper’s demise was public revulsion in Britain to the news that News of the World reporters had hacked into the mobile phone messages of Milly Dowler, a 13-year-old girl who was abducted on her way home from school in March 2002, but whose body wasn’t discovered for another six months. Guardian reporter Nick Davies’s disclosure that the News of the World had not only listened to messages left by Milly’s frantic friends and family but had deleted messages from her voice mailbox to keep the supply coming—creating false hope for the girl’s family and possibly destroying evidence—sparked a boycott of the paper’s advertisers and widespread denunciation. Prime Minister David Cameron condemned the hacking as “dreadful,” Labour Party leader Ed Miliband called for Rebekah Brooks, a Murdoch executive who was editor of the News of the World when the murdered teenager’s phone was hacked, to resign. The Royal British Legion, the country’s largest veterans’ organization, announced it was cutting its ties with the paper after reports emerged suggesting that the phones of soldiers killed in Iraq and Afghanistan had also been hacked. Even Rupert Murdoch described the mounting scandal as “deplorable and unacceptable.”
Behind the wave of sentiment, though, lie some significant figures: the profits of all of Murdoch’s papers put together are a tiny fraction of the £6 billion in revenues from Sky, his British satellite broadcaster. Ever since News of the World reporter Clive Goodman and private investigator Glenn Mulcaire first pleaded guilty in 2007 to hacking into the mobile phone accounts of members of the royal family, Murdoch’s actions have had a single aim: to contain the damage so that he can proceed with his plan buy the 60 percent share of British Sky Broadcasting he doesn’t already own. For a while it even looked like he might succeed. Despite dogged reporting by the Guardian and the New York Times, the rest of the media showed little interest. But the slow drip of celebrity hacking victims eventually brought a wave of lawsuits; each lawsuit prompted the disclosure of new documents; each set of documents revealed a culture of lawlessness and invasion of privacy targeting not just the usual boldface names but the kind of people who read the Sun, watch Sky and vote Conservative.
When Labour MP Tom Watson, himself a hacking victim, called for Murdoch’s takeover of BSkyB to be blocked, nobody cared. But when Zac Goldsmith, a Tory MP whose father was a bare-knuckled corporate operator and whose grandfathers were both Tory MPs, rose in the House of Commons and said that Murdoch’s organization “has grown too powerful…. It has systematically corrupted the police and has gelded this parliament, to our shame,” it was a sign that the political weather was changing. By Thursday David Cameron announced two new investigations, and by Friday it emerged that government approval of the BSkyB takeover, once seen as inevitable, has now been deferred until at least September.
Cameron’s moves may have been an attempt to deflect attention from the arrest on Friday morning of Andy Coulson, the Prime Minister’s former director of communications, who'd resigned as editor of the News of the World when Goodman and Mulcaire were convicted, but who always claimed to have no knowledge of what they’d been up to. Coulson is accused of approving hundreds of thousands of pounds in payments to police officers in exchange for confidential information.
There is no doubt that Murdoch has been seriously damaged by all of these disclosures. It has often been said of Murdoch that the only thing he cares about is his share price. Events over the past week wiped some $2.5 billion off the value of News Corporation, his US-based holding company. But there is still every likelihood he will recoup his losses. Even closing the News of the World may turn out to be a boon, allowing him to jettison not only a toxic title but also the expense of a separate weekly paper if widely rumored plans for the Sun on Sunday turn out to be true.
For Americans, the real question is whether Murdoch’s political influence is on the wane. Certainly it would be pretty to think so. A world without Fox News would be a fairer (if not more balanced) world in every sense. But as the widening revelations of the phone hacking scandal show, News Corporation is not an ordinary commercial enterprise. Through his journalists and gossip columnists and the network of former and current police officers and law enforcement officials on his payroll, Rupert Murdoch has been operating what amounts to a private intelligence service. And the threat of personal exposure—on the front page of the Sun or Page Six in the Post—gives News Corporation a kind of leverage over inquisitive regulators or troublesome politicians wielded by no other company on earth.
English already has the expression “para-state” to describe the kind of shadowy forces that operate beneath and behind legitimate authority. Is it really unreasonable to suggest that in News Corp, Fox, News International, Sky and the rest of Murdoch’s empire we are witnessing the emergence of the para-corporation?
They may not have been the largest crowd assembled in the streets of the capital, or the loudest demonstration in British history, but Thursday’s strike here by four public sector unions protesting government moves to cut state employees’ pensions was certainly the best behaved protest for its size. Which is fitting since three of the striking unions, the National Union of Teachers, the Association of Teachers and Lecturers and the University and College Union, represented much of the nation’s teachers. Support among union members was strong enough to shut down half the schools in England and Wales—the government admitted some 11,000 state schools had been affected by the strike—as well as airports, welfare offices, the driving license agency and museums staffed by the Public and Commercial Services Union, whose 200,000 members also walked out for the one-day strike. After marching to Trafalgar Square the strikers helped clean up their litter.
But the protestors still got poor marks for behavior from Ed Miliband, who like St. Peter thrice denied the strikers his support. After twice issuing statements refusing to support the strike on the grounds that negotiations between the unions and the government were still going on, the Labour Party leader put out a statement on his blog saying “I understand their anger about the way the government has acted. But this does not alter my view that today’s strikes are a mistake. It is a mistake to resort to disruption at a time when negotiations are still going on. And it is a mistake not just because of the inconvenience caused but also because I firmly believe it will not help to win the argument with the public.”
Miliband, who was only elected Labour leader thanks to strong union backing, also denounced the strike in a speech to the Local Government association, saying the strike was wrong “because of the effect on the people who rely upon these services.” However it is worth noting that none of the unions out on Thursday are formally affiliated with the Labour Party. So while many on the left were furious at Labour’s failure to back the strikers—when shadow business secretary John Denham called the strike a mistake on a BBC panel show he was booed by the audience—Miliband’s stand may have been a calculated gesture of independence.
But public sympathy appears to be with the strikers, despite the inconvenience. The government didn’t help its case when two of its ministers, arguing that public sector pensions had simply become unaffordable, seemed unaware of an official report showing that pension costs are actually projected to decline over the next few years thanks to changes made by New Labour. So far Miliband’s strategy seems to be to ride the waves of public discontent passively, like a surfer sitting on his board. But if the big public sector unions, who though supportive of Thursday’s action have so far remained on the sidelines, manage to coordinate their opposition and Miliband is still sitting on his board when that wave breaks then Labour will truly be washed-up.
It wasn’t quite rearranging the deckchairs on the Titanic, but the May 5th referendum on whether to change Britain’s voting system seemed, to many people, at best an irrelevance and at worst a cheat. A vote on electoral reform was the prize Liberal Democrat leader (and Former Nation Intern TM) Nick Clegg waved at his party when he signed his coalition pact with the Tories after last year’s election—a foothold, it was said, towards fairer votes and truer representation in parliament for the Lib Dems, who because of demographics and the UK’s winner-takes-all voting system have so far played the role of the perpetual bridesmaid. The proposed Alternative Vote (AV) system, which asks voters to rank candidates in order and takes second preferences into account until a winner emerges with more than 50%, wasn’t even the one most Liberal Democrats wanted: Clegg himself called it “a miserable little compromise.”
Held on the same day as elections for local councils and the Scottish and Welsh assemblies, the vote became instead a referendum on Clegg and his party, who crashed in spectacular flames, losing half their English council seats and scuppering electoral reform for many years to come. The Tories emerged from the wreckage startlingly unscathed. Ever since they broke their promise to scrap university tuition fees (voting instead for a Tory plan for a 300% increase) the Lib Dems have become the nation’s punching bag, taking the rap for Tory cuts just as Prime Minister David Cameron clearly hoped they would: the words “human shield” have been all over the airwaves, and not only with reference to the killing of bin Laden. Labour picked up most of the Lib Dems’s dropped seats in England but made no dent in the Tory vote—and suffered its own devastating defeat in Scotland.
Disgust with the government in Westminster led to a historic victory for the left-leaning Scottish National Party, whose leader Alex Salmond promised “the rocks would melt in the sun” before he made Scottish students pay tuition fees. Salmond’s party plans a referendum on full independence for Scotland before the end of the current Edinburgh parliament; if they win, and take Scotland out of the union, the Tories will have a huge majority in what’s left of Britain. A vote that was meant to lead to one kind of constitutional change—an electoral system that would, in theory, empower Britain’s left-of-centre majority—may instead produce another, which could shut the left out of Westminster for decades.
Why didn’t government spending cuts produce more of a backlash at the polls against their Tory architects? In politics, timing is everything. The school budget cuts, the withdrawal of housing support and legal aid and disability allowance, the closing down of day centres and libraries, the planned gutting of the National Health Service have barely begun to bite; this is the last moment when that will be true. What’s more, by agreeing to hold the AV referendum at the same time as local elections, Cameron allowed his party to launch an all-out attack on its coalition partners. The “No to AV” campaign, bankrolled almost entirely by Tories and Tory donors, used every sleazy trick at its compendious disposal, from suggesting that babies would die if voting reform went through to promoting Clegg—the coalition’s deputy prime minister--as the scapegoat for everything. “The AV means more coalitions and more broken promises,” proclaimed the Tory-funded posters. “Under AV the only vote that counts is Nick Clegg’s.”
The Labour Party also bears some of the blame. Endlessly worried about being seen as fiscally irresponsible, it has still failed to articulate an alternative plan for the economy. In depressing contrast to Cameron, whose personal intervention against AV was greeted with rage by his coalition partners and joy by his own back benchers, Labour leader (and Former Nation Intern TM) Ed Miliband couldn’t unite his party behind the AV campaign or make a convincing link with supposedly Labour values like participation and democracy. Labour has long been split on electoral reform, and on the whole question of working with the Liberal Democrats. Indeed, many of the New Labour dinosaurs whose emphatic lack of interest in forming a coalition last May helped push the Liberal Democrats into the arms of the Tories were outspoken in support of the “No” campaign. Some of them come from seats where the opposition is evenly split between Tories and Lib Dems, and benefit from the current system. Many more simply have a tribal hatred for the Liberal Democrats and anyone who isn’t Labour. With Clegg humiliated and his party in disarray, their argument goes, voters seeking an alternative to the Tory program will simply have to vote Labour, which will then return to office without any need to share power—or patronage—with any outsiders. Scotland has changed all that. Alex Salmond’s triumph shows that disaffected voters will, eventually, find another way. In Britain they’ll have to do it now under the old voting system, which shuts out smaller parties and let the Tories sneak into office despite being rejected by most of the voters through much of the last century.
The voting reforms so comprehensively rejected may not have been perfect, but they did offer a real chance to break the logjam of British politics. Even if all they achieved was a reduction in the number of safe seats—few MPs now ever face the prospect of real opposition—that would have been a gain for democracy. Instead the next election will be fought in even fewer constituencies, with the new boundaries drawn by the current government. This is a Tory moment if ever there was one: the ease with which Labour’s former prime ministers, Tony Blair and Gordon Brown, were left like wicked fairies off That Wedding list reflects the new confidence of the old ruling class, whose reunion party filled Britain’s TV screens last week. There may yet come a day when the voting system here produces results that reflect the views of the majority, who favor a well-funded, universal NHS, redistributive taxation and high quality public services. But it may not be in our lifetimes, or even in Charles and Camilla’s. Perhaps by the time William and Kate come to the throne…
I had two invitations to join today’s March for An Alternative to the government’s austerity program. My comrades in the National Union of Journalists were marching in the Federation of Entertainment Unions, which seemed oddly appropriate. I also had an e-mail from my rabbi urging me to “think of my socialist bubbe” and inviting me to join an après-demo occupation of Top Shop, the British fashion chain whose owner, Philip Green, has been a target of UK Uncut for avoiding paying his taxes, with the unarguable admonition that “anyone who can afford to give their son a £4 million bar mitzvah clearly isn't paying enough tax.”
But owing to the operations of a Tory-supporting cold virus which struck the other half of the bureau, and counter-revolutionary activity on the part of the office dog, who declined to sacrifice his walk in the name of solidarity, I missed both groups and ended up marching with the Musicians’ Union. For those of you who think of protest demonstrations as dour, somber affairs I can recommend the experience warmly. We had the usual chants: “Students and Workers, Unite and Fight!” and “No ifs, no buts, no education cuts!” but we also had a brass band and some very enthusiastic dancers from Equity, the actors’ union, who were marching nearby.
The march, organized by the Trades Union Congress, saw between 400,000 and half a million people fill the streets from the Embankment to Trafalgar Square and then on to Hyde Park, where Ed Miliband, leader of the Labour Party (and former Nation intern™) told the crowd they stood in the tradition of the suffragettes, “who fought for votes for women and won. The civil rights movement in America that fought against racism and won. The antiapartheid movement that fought the horror of that system and won.”
The British, of course, have their own proud tradition of protest, from the Levellers and Diggers in the English Civil War to the Jarrow Crusaders in the 1930s and CND in the 1950s and 60s to the poll tax riots against Thatcher in 1990. Not too many victories there, though. Which may also be why I couldn’t help remembering the last time I’d walked this route, on February 15 2003, protesting against the Iraq War. The government then, a Labour government, managed to ignore a million people in the streets. So why should a Conservative-Liberal Democrat coalition pay attention to half that number?
Senior Labour Party figures seem to believe the public will turn against the government once the cuts start to really bite. Ed Balls, the shadow chancellor and supposedly Labour’s hardest hitter against the Tories, joined the march today but argued only for a more gradual approach to reducing the deficit rather than a wholesale rejection of the austerity agenda. And in a way the whole day reflected this disconnection between parliamentary politicians, who still seem terrified of appearing “irresponsible,” and the teachers, nurses, librarians, social workers, train drivers and hospital workers who are terrified of losing their jobs and having to rely on a shredded social safety net.
It’s easy for us old veterans to heap scorn on the few hundred anarchist punks in their black hoodies who come to these demonstrations looking for trouble, and whose appetite for mixing it up with the police threatens to hijack the headlines, and the airtime, earned by the hundreds of thousands of peaceful protesters. But when the political system seems sclerotic and unresponsive dissent will find other avenues. The demonstrators chanting—and singing—“March Like an Egyptian” or carrying London street signs proclaiming “Tahrir Square, City of Westminster” were clearly engaging in wishful thinking. That has to be preferable, though, to the refrain (sung to the tune of “The Battle Hymn of the Republic) I heard as the crowd passed under Big Ben: “You can take your Parliament and shove it up your arse.”
As I write the police are still battling with protesters inside Fortnum and Mason, a favorite haunt for visiting Americans in need of a cup of Earl Grey. (Q: Why are the anarchists occupying Fortnum and Mason? A: Because proper tea is theft.) And UK Uncut, last month’s media darlings, are taking a lot of flack for not having the discipline to keep their high street protests uniformly peaceful.
But that is where we are: a government carrying out a determined, ideological assault on the welfare state; shell-shocked public sector workers demoralized after a decade of “New Labour” reforms; a Labour Party determined not to repeat the mistakes of the 1980s, which resulted in a long winter of unelectability, but whose alternative to austerity so far lacks either conviction or inspiration. Although he’s already been taunted for it in the press, Ed Miliband was right about one thing. Looking out over the throngs in Hyde Park he said: “This is what the Big Society looks like.” At the risk of sounding antediluvian, he might have said it’s what the working class looks like. It’s also what class war looks like—when your side is losing.
Tony Blair is back on his meds. The last time the former Prime Minister appeared in front of the Iraq Inquiry, the display of physical tics, sweaty brow, verbal evasions and evident nervousness made him look about two steel balls short of the full Queeg.
That was just about a year ago, and although Blair managed to successfully dodge all of the panel's questions, his flub of a last-minute softball was obviously still on his mind. At the close of proceedings last January, the Inquiry chairman, Sir John Chilcot, asked Blair whether he had any regrets. Blair replied that he was sorry the war had been divisive, but he'd do it all again. As the hearing room, filled with relatives of slain and wounded British soldiers, gasped audibly, Chilcot repeated the question, only to have Blair reply, "Responsibility but not a regret for removing Saddam Hussein. I think he was a monster, I think he threatened not just a region but the world."
This time Blair seemed determined to make amends. His statement that "of course I regret deeply and profoundly the loss of life"—brought many in the hearing room, again filled with relatives of the fallen, to tears, but also prompted a shout of "too late!" from Rose Gentle, whose 19-year-old son, Gordon, was killed in Basra in 2004.
But if Blair managed to express some regret—and, apart from some rogue hand gestures, also did a better job of keeping his body under control—he also offered little more than a reprise of his earlier performance, including the slightly compulsive way he kept using the security collapse in Iraq to justify greater belligerence towards Iran. "The West," said Blair, has to get out of "a wretched posture of apology" towards the Islamic world. What had changed after September 11, 2001, he repeated, was the plausibility of the view that extremism could be "managed." Rather "it needs to be confronted and changed.
The difference—and the reason Blair was hauled back in front of the Inquiry—is that we now have a far better picture of the road to war than was available last time, and the facts available do not entirely support Blair's version of events. Written evidence released today shows that Blair was seeking "regime change" far earlier than he's previously acknowledged—and at a time when he assured both Parliament and the British public he was straining every sinew to avoid a military solution. Former Attorney General Peter Goldsmith's testimony, though unilluminating on what exactly got him to change his mind and declare an illegal war suddenly legal, was clearly inconsistent with Blair's account of constant, informal consultation. There was a moment of inadvertent frankness, however, when Blair, asked if he "felt constrained by the advice the Attorney General continued to give you" that without a second UN resolution an invasion of Iraq would be illegal, answered simply (and no doubt truthfully), "No."
And though Blair declined to release the text of his communications with George W. Bush—and the current government refused three separate written requests by Sir John Chilcot to make the documents, which they have been allowed to see, available to the public—Blair's summary of his June 2002 message to Donald Rumsfeld made the point eloquently enough: "Whatever the political heat, if I think this is the right thing to do I'm going to be with you."
It has often been said, and with considerable justice, that the Iraq Inquiry panel is far too deferential in the way it treats its witnesses. Of the four members of the panel, only Sir Roderic Lyne, a veteran career diplomat, ever comes close to asking a probing question—and even he seems hampered by an overwhelming fear of appearing impolite. (Though for connoisseurs of the inquiry his remark today that "what is not clear is at what point you were actually asking the cabinet to take decisions" is a masterpiece of understated disdain.)
However it was Sir Martin Gilbert, a distinguished historian but no one's idea of a grand inquisitor, who asked the $64,000 question: "Can you tell us at what point you took the decision to join the United States is using force?" He could, but he wouldn't. However, if the tone of the questions is any indication, the Inquiry may have already arrived at an answer—and the indications are that history is not going to be very kind to Tony Blair.
Ever wondered what happens when the smartest guys in the room turn out to be saps? Then cast your eyes over to Ireland, where the Celtic Tiger that roared through the dawn of the twenty-first century is being rapidly turned into cat food even as I type. How bad is the Irish economic crisis? The truth is that nobody knows. The latest price tag for the IMF bailout is 85 billion euros, but the situation is sufficiently fluid—and reportage sufficiently hysterical—that the Guardian website has a live Ireland Bailout blog offering minute-by-minute updates. At the moment Irish Prime Minister Brian Cowen is refusing to resign until after the next slice of austerity measures has been approved by the Dail (Ireland's parliament)—or as the headline writers at the tabloid Daily Star put it: "USELESS GOBSHITES / Government in meltdown but STILL they cling onto power."
In addition to its entertainment value, the Irish debacle is worth paying attention to for the way it vividly illustrates the folly of neoliberal economics. In case you've forgotten, Ireland, with its educated workers, weak unions, business-friendly tax regime and wide-open banking system, was supposed to be a model for the rest of us. Someday maybe someone will put together an anthology of the paeans to the Celtic Tiger—but here's two examples worth highlighting. In February 2006 George Osborne, now chancellor of the exchequer and Britain's budget-cutter-in chief, wrote an article in Rupert Murdoch's London Times urging his courtrymen to "Look and Learn from Across the Irish Sea." Osborne's claim that "Ireland stands as a shining example of the art of the possible in long-term economic policymaking" has proved irresistible to any number of pundits in recent weeks, but the article is well worth reading in its entirety as a compendium of the myths that still guide British policy-making. But before American readers get too smug, take a look at this essay by Chris Edwards, director of tax policy at the CATO Institute (and hence a big player in the new Republican-led House of Representatives on budgetary matters). Writing in March 2007 for National Review online, Edwards asks whether Dublin's boomtown atmosphere was due to "the luck of the Irish." Not at all, he answers himself: "It resulted from a series of hard-headed decisions that shifted Ireland from big government stagnation to free market growth. After years of high inflation, double-digit unemployment rates, and soaring government debt that topped 100 percent of GDP, Irish policymakers began to cut spending in the late 1980s in a desperate bid to recover financial stability." Again the whole piece is worth reading—especially if you want to know what kind of shit Congressional Republicans are still smoking.
Now we know that the whole shining green edifice of Irish prosperity was built on a housing and banking bubble even less substantial than the towers of Oz—only here the men behind the curtain weren't benevolent wizards but greedy and incompetent bankers who thought they were too clever to be governed by the laws of economic gravity. The best brief explanation of what happened can be found in the Financial Times, where columnist Martin Wolf explains that unlike Greece, where the government really had been spending money it didn't have for years, and counting on endless growth (and rising tax receipts) to defer the day of reckoning, the Irish government had if anything been excessively frugal. Irish public debt in 2007 was just 12 percent of GDP (compared to 50 percent in Germany and 80 percent in Greece). As Wolf points out, "It was not the public but the private sector that went haywire in Ireland and in Spain"—a triumph of the free market which allowed Irish banks to rack up massive loan books in a Celtic version of our own subprime mortgage crisis. Here, too, the myth of infinitely sustainable growth covered a multitude of corrupt practices—all cruelly exposed to view once the US crisis yanked the cloth off the table.
In recent months Ireland has again been held up as a model—this time of a country stoically taking its medicine administered by a government determined to enforce austerity. But if, as Wolf argues, the Irish crisis wasn't caused by government spending, then austerity is the wrong medicine. Wolf suggests letting the bondholders take the pain rather than the Irish public—an eminently moderate proposal.
To understand why such moderation is unlikely to be pursued, consider the headline from a chart in this morning's Guardian: "Financial markets are wealthier than governments." Sadly, the chart itself is not available on the web, but it shows a set of concentric circles, with the smallest being the Portuguese economy ($223 billion), surrounded by the assets of single bond fund (PIMCO, $1 trillion), which is only slightly smaller than the entire Spanish economy ($1.6 trillion), which in turn is dwarfed by the assets under management by Blackrock ($3.3 trillion). The Irish economy, which according to those nice folks at the CIA World Factbook had a GDP of $172 billion in 2009, would have been too small to see on the page.
Given the balance of forces it is no wonder that the banks (and the IMF) call the tune—as was made abundantly clear this week, when the European Commissioner Olli Rehn told the Irish they couldn't get rid of their government until they had passed a budget.
Any departure from the austerity script would require a level of political mobilization so far completely lacking in Ireland—or for that matter in Britain, where George Osborne remains determined to follow the Irish example on the theory that only by starving the state will the private sector be freed to generate prosperity. For a comprehensive explanation of why the Irish strategy has been a colossal failure, I recommend the Australian economist Bill Mitchell, who saw it coming and whose reader-friendly radicalism offers at least the beginnings of a way out. But in the short term the Irish are going to have to decide to make their own history—or let the bankers make it for them. As my modest contribution to the Irish struggle, I offer a slogan, suitable for placards (should the occasion for placards arise): "Give Ireland Back to the Irish."
It's not about the oil. After all, if President Obama really thought that protecting the American shoreline was so important, he wouldn’t have opened up vast new tracts of the Gulf of Mexico and the Atlantic coast to offshore drilling in the month before Deepwater Horizon blew. Even after the leak, when the President announced a (temporary) moratorium on new offshore drilling, the Minerals Management Service kept approving waivers.
It’s not even about the money. Yes, the costs of cleaning up the Gulf are going to be huge. And the fact that BP won’t put a figure on the company’s possible liability makes the markets nervous—as of course does President Obama’s public quest for “whose ass to kick.” But as the Financial Times helpfully points out, BP’s current total cleanup costs of $1.25 billion is only a fraction of the company’s $10.5 billion dividend pot; even if the cleanup and damages ends up costing the company $20 billion, that would still be less than the $25 billion in profits BP made in 2008.
So why has an environmental disaster become a transatlantic political football, in which the US President stokes populist anger while British politicians accuse their American counterparts of “anti-British rhetoric”? Could it be because attacking the hapless Tony Hayward is a lot easier than admitting America’s addiction to oil makes this kind of disaster inevitable? Or that as long was we accept a system in which energy company profits remain in private hands while their losses are socialized, there is very little incentive for BP or any energy company to spend the money to make such accidents less likely? And as Christopher Hayes points out, the American criminal justice system is the most punitive of any industrialized nation—except when it comes to corporate malfeasance.
As for the British money manager who complained that Obama “had his boot on the throat of British pensioners,” surely a better target would have been his fellow fund managers who chose to invest in BP without paying sufficient attention to the company's spotty safety record. Here, too, though, it might be worth pointing out that while British pensioners might indeed suffer if the collapse in BP’s share price continues, none of them ever got a penny from the company’s billions in profit. Once again only the losses are socialized.
But there is one more factor to consider in gauging the temperature of this transatlantic face-off. Though many Americans will be elsewhere tomorrow afternoon, here in England, where it will be evening, millions of people will be glued to the television watching the World Cup. Even in our leafy and liberal corner of North London the red and white cross of St. George can be seen flying from houses, car antennas and in in pub windows. And just who stands between England and glory in the first match? Team USA of course. So for the next 24 hours, beating up on Americans is a popular move for any politician here. After that, if England (who are favored) win, you can expect the rhetorical temperature to cool off. Of course if England lose, there may be calls for BP to open up a few more wells…
Though the polls closed here in Britain more than 12 hours ago we still don’t know who won. There are still seats where the results haven’t come in, but the latest results point to a hung parliament, with no party commanding an absolute majority in the new house of commons. I don’t know what the no-smoking equivalent of a smoke-filled room is, but that’s what the next few days promise, as all three parties jostle not just for a share of power, but for a political position that won’t blow up in their faces as whoever occupies Number 10 Downing Street imposes the austerity measures that all three party leaders deliberately avoided discussing during the campaign.
While we wait for those negotiations to emerge, it is at least possible to specify who lost last night:
1. David Cameron. For most of the past year the Conservative Party hovered at around 40 per cent in the opinion polls, promising an easy walk to a commanding majority in government. Instead the Tories are heading for about 36 per cent—a five per cent swing from Labour since the last election, but not enough to be entitled to govern. Under Britain’s first-past-the-post system, winning a plurality may give you a “moral right to govern”—as Rupert Murdoch’s Sun claimed this morning. But in Britain a moral right and 20 pence will buy you a copy of the Sun. The Tories campaigned as the only major party in favor of keeping the current system, and under that system the sitting Prime Minister has the right to try and form a majority first. Only when he resigns and can’t form a majority does power potentially pass to the opposition.
2. Gordon Brown. Though he has the legal and political right to try to cling on to power, Gordon Brown’s party were the biggest losers last night, with their share of the votes declining by over 6 per cent—two thirds of which went to the Tories—while losing at least 87 seats in Westminster, more than a quarter of their 2005 total. Labour’s deathbed conversion to electoral reform would provide a plausible rationale for a coalition with the Liberal Democrats if Labour’s own poor performance didn’t tarnish, perhaps fatally, the legitimacy of any such deal. Which brings us to…
3. Nick Clegg. When the polls closed last night and the exit poll results indicated the Liberal Democrats actually winning fewer seats than in 2005, your correspondent was inclined to doubt the poll. But the grey light of dawn has indeed revealed a net loss of Lib Dem seats (though a very slight increase in the share of the vote). Explanations for why Cleggmania, though a media earthquake, turned out to be little more than a political hiccup, will have to wait. Especially since the Lib Dems—aided by a shambolic polling process that saw hundreds of voters turned away from polls across the country—do seem to have actually won the argument about the need for a fairer electoral system. But it is worth saying that not the least perverse aspect of the current system is that although he and his party did far worse than they either hoped or expected, Nick Clegg still woke up this morning holding the balance of British politics in his hand. How will he use it? This morning he reiterated his view that the party with the most votes and the most seats “has the first right to seek to govern, either on its own or by reaching out to other parties.” But to seek is not to find, and though Clegg may feel he holds a poisoned chalice, he hasn’t got rid of it quite yet.
What did Tony Blair know, and when did he know it?
When I first went down to the Chilcot Inquiry investigating Britain's involvement in the Iraq War on Wednesday morning most press attention was elsewhere--perhaps on Gordon Brown's ill-fated Afghanistan summit, where the big news was a plan to buy off the Taliban by offering fighters money and jobs, or (though this seems unlikely), on the even less promising Conference on Yemen and terrorism, which by one of those coincidences in which the gods of irony make their influence manifest, is also taking place here this week. As a result I was able to sit about 10 feet behind the former Attorney General, Peter Goldsmith, as he tried to explain what exactly had shifted him from the firm view, expressed as late as January 2003, that going to war solely on the basis of UN Resolution 1441 would be a violation of international law, to the view in February and March 2003, that the war was completely legal.
Lord Goldsmith attributed his conversion to three factors: a chat with Sir Jeremy Greenstock, London's man at the UN, discussions with the then-Foreign Secretary, Jack Straw, and, intriguingly, his conversations in Washington in February 2003 with William Howard Taft IV, the State Department's chief legal advisor. This was one of the many moments when one wished that the make-up of the Inquiry had somehow stretched to include a lawyer--or even a half competent journalist. Anyone, really, capable of asking a few follow-up questions.
It was a wish that returned in force this morning, as former Prime Minister Tony Blair faced the first really sustained public questioning of his decision to take Britain to war in Iraq. I'll file a more considered report on Blair's testimony later on, but although Blair seemed palpably nervous at the start of his seven hours of questioning--there were reports of his hands shaking as the hearing began--it soon became clear how little Blair had to fear from the panel. He described his own thinking as having undergone a sea change after the attacks on September 11, 2001, which he claimed owed very little to any perceived need to cultivate or curry favor with the new administration of President George W. Bush. Blair likewise denied reports that he'd made any secret promise to President Bush to support a military confrontation with Iraq long before he publicly committed Britain to an invasion.
Since Gordon Brown's government--or as Sir Roderic Lyne, a veteran diplomat and the only member of the panel who even comes close to cross-examining witnesses, put it, "the government that was elected under your leadership"--yesterday refused to declassify Blair's correspondence with Bush, there was no evidence available to challenge Blair's account. But there were a few areas where more aggressive questioning might have paid off:
1. Timing. Lyne came close, asking Blair: "Why Iraq? Why Now?" but never succeeded in getting an answer to the second question. Blair's response that although Iran and North Korea both arguably posed greater threats to world peace, the combination of Saddam Hussein's history of flouting UN resolutions, and his record of using chemical weapons against his own people rendered him a better target was plausible enough. But Blair's further claim that UN weapons inspector Hans Blix's reports--and the later evidence of the Iraq Survey Group --that Iraq retained both a commitment to developing WMD and the intellectual capability to do so also in effect concedes that in 2003 Iraq posed no immediate threat. So why the rush to invade? Blair denied any Pentagon pressure. The closest he came to an answer was to say that if the Iraqis had been given more months to comply with the UN, and had continued to evade full compliance "by then we would have lost our nerve." But he was never asked whether the risk of lost British nerve was really sufficient to justify hundreds of British deaths, let alone hundreds of thousands of Iraqi deaths.
2. What did he know, and when did he know it? Blair's letters to Bush may someday tell us a great deal. But in the meantime the Inquiry could have asked to see his correspondence with the late Robin Cook, Straw's predecessor as Foreign Secretary, who resigned from the cabinet on March 17, 2003, just as the invasion began. As Foreign Secretary Cook until June 2001 had been involved in both the joint British-US action in Kosovo and in Operation Desert Fox; presumably he knew as much as anyone about the state of Saddam Hussein's WMD program. Did he tell Blair his purported justification for war was based on sexed-up intelligence?
3. Regrets. Offered several chances to state any regrets, Blair declined, though his remark that what he felt was "responsibility, but not regret" prompted some in the otherwise impeccably behaved audience to jeer. Instead time and again Blair changed the subject, blaming the chaos in Iraq not on the US or Britain or their joint failure to plan for after the invasion, but on the unforeseen and malign intervention of Al Queda and Iran. He repeatedly, almost compulsively, returned to the themes of Iranian treachery and Iranian provocation and the many parallels between the threat posed by Saddam Hussein and by the current regime in Iran.
Blair's obvious fixation with Teheran was what made his testimony more than just warmed-over rationalizations. There are certainly lessons to be drawn, both for Washington and London, from Blair's evident eagerness to treat Iran as a "do-over" of Iraq. But they probably aren't the ones he tried to deliver today.