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In autumn 2002 Ed Vulliamy, a correspondent for Britain’s Sunday Observer newspaper, stumbled on a terrible truth that many of us already suspected.

In a world-exclusive, he persuaded Mel Goodman, a former senior Central Intelligence Agency official who still had security clearance, to go on record that the CIA knew there were no WMD in Iraq. Everything the US and British governments were telling us to justify the coming attack on Iraq were lies.

Then something even more extraordinary happened. The Observer failed to print the story.

In his book Flat Earth News, Nick Davies recounts that Vulliamy, one of the Observer’s most trusted reporters, submitted the piece another six times in different guises over the next half year. Each time the Observer spiked the story.

Vulliamy never went public with this monumental crime against real journalism (should there not be a section for media war crimes at the Hague?). The supposedly liberal-left Observer was never held accountable for the grave betrayal of its readership and the world community.

But at the weekend maybe the tables turned a little. The Observer gave Vulliamy a platform in its comment pages to take issue with an editorial the previous week savaging Jeremy Corbyn’s election as Labour Party leader.

In understandably cautious mode, Vulliamy called the paper’s stance towards Corbyn “churlish”, warning that it had lost the chance to stand apart from the rest of the British media. All had taken vehemently against the new Labour leader from the very beginning of his candidacy.

“we conjoined the chorus with our own – admittedly more progressive – version of this obsession with electoral strategy with little regard to what Corbyn says about the principles of justice, peace and equality (or less inequality).”

What do these two confrontations between Vulliamy and the Observer –13 years apart; one public, one not – indicate about the changing status of the liberal-left media?

To understand what’s going on, we also need to consider the coverage of Corbyn in the Guardian, the better-known daily sister paper of the Observer.

All the Guardian’s inner circle of commentators, from Jonathan Freedland to Polly Toynbee, made public that they were dead against Corbyn from the moment he looked likely to win. When he served simply to justify claims that the Labour Party was a broad and tolerant church, these commentators were in favour of his standing. But as soon as he began to surge ahead, these same liberal-left pundits poured more scorn on him than they had reserved for any other party leader in living memory.

In a few months Corbyn has endured more contempt from the fearless watchdogs of the left than the current Conservative prime minister, David Cameron, has suffered over many years.

The Guardian’s news coverage, meanwhile, followed exactly the same antagonistic formula as that of the rightwing press: ignore the policy issues raised by Corbyn, concentrate on trivial or perceived personality flaws, and frame stories about him in establishment-friendly ways.

We have endured in the Guardian the same patently ridiculous, manufactured reports about Corbyn, portraying him as sexist, anti-semitic, unpatriotic, and much more.

We could expect the rightwing media to exploit every opportunity to try to discredit Corbyn, but looking at the talkbacks it was clear Guardian readers expected much more from their paper than simple-minded character assassination.

Red neoliberals

The reality is that Corbyn poses a very serious challenge to supposedly liberal-left media like the Guardian and the Observer, which is why they hoped to ensure his candidacy was still-born and why, now he is leader, they are caught in a terrible dilemma.

While the Guardian and Observer market themselves as committed to justice and equality, but do nothing to bring them about apart from promoting tinkering with the present, hugely unjust, global neoliberal order, Corbyn’s rhetoric suggests that the apple cart needs upending.

If it achieves nothing else, Corbyn’s campaign has highlighted a truth about the existing British political system: that, at least since the time of Tony Blair, the country’s two major parliamentary parties have been equally committed to upholding neoliberalism. The Blue Neoliberal Party (the Conservatives) and the Red Neoliberal Party (Labour) mark the short horizon of current British politics. You can have either hardcore neoliberalism or slightly more softcore neoliberalism.

Corbyn shows that there should be more to politics than this false choice, which is why hundreds of thousands of leftists flocked back to Labour in the hope of getting him elected. In doing so, they overwhelmed the parliamentary Labour party (PLP), which vigorously opposed him becoming leader.

But where does this leave the Guardian and Observer, both of which have consistently backed “moderate” elements in the PLP? If Corbyn is exposing the PLP as the Red Neoliberal Party, what does that mean for the Guardian, the parliamentary party’s house paper?

Corbyn is not just threatening to expose the sham of the PLP as a real alternative to the Conservatives, but the sham of Britain’s liberal-left media as a real alternative to the press barons. Which is why the Freedlands and Toynbees – keepers of the Guardian flame, of its undeserved reputation as the left’s moral compass – demonstrated such instant antipathy to his sudden rise to prominence.

They and the paper followed the rightwing media in keeping the focus resolutely on Corbyn rather than recognising the obvious truth: this was about much more than one individual. The sudden outpouring of support for Corbyn reflected both an embrace of his authenticity and principles and a much more general anger at the injustices, inequalities and debasement of public life brought about by neoliberalism.

Corbyn captured a mood, one that demands real, not illusory change. He is riding a wave, and to discredit Corbyn is to discredit that wave.

Character assassination

The Guardian and the Observer, complicit for so long with the Red Neoliberals led by Tony Blair, Gordon Brown and Ed Miliband, thought they could kill off Corbyn’s campaign by joining in the general media bullying. They thought they could continue to police the boundaries of the political left – of what counts as credible on the left – and place Corbyn firmly outside those borders.

But he won even so – and with an enormous lead over his rivals. In truth, the Guardian’s character assassination of Corbyn, rather than discrediting him, served only to discredit the paper with its own readers.

Corbyn’s victory represented a huge failure not just for the political class in all its narrow neoliberal variations, but also for the media class in all its narrow neoliberal variations. It was a sign that the Guardian’s credibility with its own readers is steadily waning.

The talkback sections in the Guardian show its kneejerk belittling of Corbyn has inserted a dangerous seed of doubt in the minds of a proportion of its formerly loyal readers. Many of those hundreds of thousands of leftists who joined the Labour party either to get Corbyn elected or to demonstrate their support afterwards are Guardian readers or potential readers. And the Guardian and Observer ridiculed them and their choice.

Belatedly the two papers are starting to sense their core readership feels betrayed. Vulliamy’s commentary should be seen in that light. It is not a magnanimous gesture by the Observer, or even an indication of its commitment to pluralism. It is one of the early indications of a desperate damage limitation operation.

We are likely to see more such “reappraisals” in the coming weeks, as the liberal-left media tries to salvage its image with its core readers.

This may not prove a fatal blow to the Guardian or the Observer but it is a sign of an accelerating trend for the old media generally and the liberal-left media more specifically.

Papers like the Guardian and the Observer no longer understand their readerships both because they no longer have exclusive control of their readers’ perceptions of what is true and because the reality – not least, polarising inequality and climate degradation – is becoming ever more difficult to soft-soap.

Media like the Guardian are tied by a commercial and ideological umbilical cord to a neoliberal order a large swath of their readers are growing restless with or feel downright appalled by.

In 2003 the Observer knowingly suppressed the truth about Iraq and WMD to advance the case for an illegal, “preventive” war, one defined in international law as the supreme war crime.

At that time – digitally the equivalent of the Dark Ages compared to now – the paper just about managed to get away with its complicity in a crime against humanity. The Observer never felt the need to make real amends with Vulliamy or the readers it betrayed.

But in the age of a burgeoning new media, the Observer and Guardian are discovering that the rules are shifting dangerously under their feet. Corbyn is a loud messenger of that change.