The Death of British Business
May 9, 2017 11:49 AM Subscribe
....there have also been stark indications of a kind of damage that is readily quantifiable and severe: the damage that Brexit has and will continue to inflict on the UK economy—an economy that, after decades of mismanagement, is overwhelmingly dependent on foreign enterprise and foreign capital.
er... this article was published in October 2016 - a more recent analysis would seem to suggest not only is this failing to convince those most ardent of Tory-haters, the Scots, but that even Remoaners are accepting that the die is cast, and they will have to make the best of it. So what is the point of posting this article exactly?
posted by aeshnid at 12:09 PM on May 9, 2017 [3 favorites]
posted by aeshnid at 12:09 PM on May 9, 2017 [3 favorites]
This is horrifying to watch, and I imagine it's going to get worse. And it seems so obvious that I can't imagine what May and the others driving this forward are thinking -- it's like they're playing chicken with themselves.
posted by GenjiandProust at 12:13 PM on May 9, 2017 [5 favorites]
posted by GenjiandProust at 12:13 PM on May 9, 2017 [5 favorites]
I was thinking it was just a naked grab for power by May, and I certainly think that was behind the initial grab to become PM and her decision to back full on Brexit, despite the huge amount of debate about the panoply of options that might be investigated going into the vote. Latterly, I think May can see some advantages as well as the stupendous disadvantages. The Great Repeal Bill offers a massive opportunity (from the Tory perspective) to throw out many of the European protections for labour, the environment, limits on deregulation and markets, god else knows what (and so far Corbyn seems not to have mentioned this). The UK was a leading neoliberaliser of its economy amongst the EU Member States and Brexit offers the chance to go further with this, one of the reasons it was able to adopt the neoliberal agenda was that it was intuitionally 'freer', a simple majority in parliament and no need for consensus enabled it to make comparatively rapid institutional changes that marked it as at one end of the continuum of EU states in terms of the approach to markets. If anything it will now be even easier to enable change. We are already seeing a shift to skip around the need for primary legislation but a large Tory majority in the upcoming GE will make that moot anyway. May will be pretty much able to do what she likes and she will hold to ideology since she has little else to support her.
posted by biffa at 12:28 PM on May 9, 2017 [5 favorites]
posted by biffa at 12:28 PM on May 9, 2017 [5 favorites]
This article could have been posted last week.
It doesn't matter that both of the major parties are intent on pursuing Brexit, that does not at all alter the argument that the economy will suffer greatly and so will the British people.
posted by vacapinta at 1:12 PM on May 9, 2017 [15 favorites]
It doesn't matter that both of the major parties are intent on pursuing Brexit, that does not at all alter the argument that the economy will suffer greatly and so will the British people.
posted by vacapinta at 1:12 PM on May 9, 2017 [15 favorites]
I'm not in the least pro-Brexit having lived in England for 7 years as an immigrant with lots of immigrant friends, particularly EU immigrants, who have made England their home and started families who are now thrown into great uncertainty and have been made to feel unwelcome (well...I guess more unwelcome really) but the British financial sector was and is an abomination.
They were and are outrageously criminal and are a pretty much an above law international money laundering scheme that has had huge distorting effects on the British economy. Money laundering was the UK's oil in their version of the "Dutch Disease"
Unfortunately, in their xenophobic referendum result they have inadvertently dealt with the economic problems caused by the growth distorting cancer "The City" by amputating their entire body. Which will be a bloody mess.
My pragmatic personal fear is that the cancer that is "The City" will now spray all over the world as countries open their doors to these awful financial institutions. Hell, they'll probably try and start a bidding war to see what extra concessions, above what they got in London, they can extract from their future victims.
posted by srboisvert at 1:21 PM on May 9, 2017 [17 favorites]
They were and are outrageously criminal and are a pretty much an above law international money laundering scheme that has had huge distorting effects on the British economy. Money laundering was the UK's oil in their version of the "Dutch Disease"
Unfortunately, in their xenophobic referendum result they have inadvertently dealt with the economic problems caused by the growth distorting cancer "The City" by amputating their entire body. Which will be a bloody mess.
My pragmatic personal fear is that the cancer that is "The City" will now spray all over the world as countries open their doors to these awful financial institutions. Hell, they'll probably try and start a bidding war to see what extra concessions, above what they got in London, they can extract from their future victims.
posted by srboisvert at 1:21 PM on May 9, 2017 [17 favorites]
It is hard to exaggerate the scale of the disaster the British people have inflicted upon themselves
Yet the Bank of England, the IMF, the OECD and many others managed it easily by predicting that the referendum result alone would cause lower growth and probably outright recession. When subsequent events proved these predictions entirely wrong, the credibility of the pro-EU lobby was badly damaged and some people were encouraged to discount all future warnings.
Fostering that automatic scepticism was not a good thing to do. We should try not to go on crying 'Wolf', and rein in the apocalyptic language.
posted by Segundus at 1:36 PM on May 9, 2017 [2 favorites]
Yet the Bank of England, the IMF, the OECD and many others managed it easily by predicting that the referendum result alone would cause lower growth and probably outright recession. When subsequent events proved these predictions entirely wrong, the credibility of the pro-EU lobby was badly damaged and some people were encouraged to discount all future warnings.
Fostering that automatic scepticism was not a good thing to do. We should try not to go on crying 'Wolf', and rein in the apocalyptic language.
posted by Segundus at 1:36 PM on May 9, 2017 [2 favorites]
It seems to me the only solution is a hard reset of the EU, in a way that lets the UK stay in and shuffles some of the power. The only way that's going to happen, though, is if there's a Frexit or Gerxit. Then they could say the whole project needs a rethink and let's all sit down and design a new, slightly different Europe. But to get all the way to that point means a whole lot more disruption and economic pain first (like 30 years worth), for everyone.
posted by chavenet at 1:47 PM on May 9, 2017 [1 favorite]
posted by chavenet at 1:47 PM on May 9, 2017 [1 favorite]
For the whole of this year, I've felt like this is no longer my country. I was born here, have lived here my whole life. I have all the privilege of being white, male, financially stable, and all the rest of it. And yet...
I meet so many people now who say they'll vote conservative at the coming election, not because they agree with anything the Tories say or do, but because they don't feel there's any choice. Like a patient begging a doctor to cut off a painful leg, they just want to get this whole mess over and done with as soon as possible. There's no real thought to what life will be like with one leg, or whether amputation is even actually necessary. They feel that the Tories got us this far into Brexit, so we might as well let them get on with it. People in the UK are, on the whole, massively ignorant and/or apathetic about politics. and often feel that it's nothing to do with them, or that nothing they do can ever matter, because the same old shit happens anyway. And with the FPTP electoral system we have, that's often true.
There doesn't appear to be one single positive thing the country can realistically hope for by leaving the EU. Not one thing. And so many downsides. And yet we carry on down this path, because it's "the will of the people". It's probably the will of the people to have well-staffed hospitals, foreign investment, human rights, and a social safety net too, but fuck that, the people have spoken on this one question the Tories asked them in a moment of hubris, and lo, these same Tories, who had spoken so strongly for the EU, saw the light, and are now against it.
It's really hard right now to know what to do. The Conservatives have loaded the Overton Window onto the back of a van and are accelerating to the right as fast as they can. It feels like an awful lot of crap is going to have to go down before there's any chance of righting this boat and getting it back on course.
That the referendum result itself didn't cause an immediate recession is because clearer heads were well aware of the fact that there was no prospect of anything happening for two years. I think it'll be a different story in 2019, if there isn't a significant degree of backing down from the current levels of rhetoric. Although given the current government's penchant for climbing down on pretty much everything it's tried to achieve, there is a small nugget of hope.
posted by pipeski at 1:56 PM on May 9, 2017 [27 favorites]
I meet so many people now who say they'll vote conservative at the coming election, not because they agree with anything the Tories say or do, but because they don't feel there's any choice. Like a patient begging a doctor to cut off a painful leg, they just want to get this whole mess over and done with as soon as possible. There's no real thought to what life will be like with one leg, or whether amputation is even actually necessary. They feel that the Tories got us this far into Brexit, so we might as well let them get on with it. People in the UK are, on the whole, massively ignorant and/or apathetic about politics. and often feel that it's nothing to do with them, or that nothing they do can ever matter, because the same old shit happens anyway. And with the FPTP electoral system we have, that's often true.
There doesn't appear to be one single positive thing the country can realistically hope for by leaving the EU. Not one thing. And so many downsides. And yet we carry on down this path, because it's "the will of the people". It's probably the will of the people to have well-staffed hospitals, foreign investment, human rights, and a social safety net too, but fuck that, the people have spoken on this one question the Tories asked them in a moment of hubris, and lo, these same Tories, who had spoken so strongly for the EU, saw the light, and are now against it.
It's really hard right now to know what to do. The Conservatives have loaded the Overton Window onto the back of a van and are accelerating to the right as fast as they can. It feels like an awful lot of crap is going to have to go down before there's any chance of righting this boat and getting it back on course.
That the referendum result itself didn't cause an immediate recession is because clearer heads were well aware of the fact that there was no prospect of anything happening for two years. I think it'll be a different story in 2019, if there isn't a significant degree of backing down from the current levels of rhetoric. Although given the current government's penchant for climbing down on pretty much everything it's tried to achieve, there is a small nugget of hope.
posted by pipeski at 1:56 PM on May 9, 2017 [27 favorites]
Meanwhile, 'Brexit boom' gives Britain record 134 billionaires. Oops! What a wacky crazy coincidence that yet again economic misery for everyone else means that the wealthiest people are riding high.
Important note though—
With the recent thinly-veiled references to "globalists" during the French election we should perhaps be careful combining "rootless" with any version of "global-", lest we accidentally use someone else's dog whistle.
posted by XMLicious at 1:59 PM on May 9, 2017 [18 favorites]
Important note though—
rootless global elite
With the recent thinly-veiled references to "globalists" during the French election we should perhaps be careful combining "rootless" with any version of "global-", lest we accidentally use someone else's dog whistle.
posted by XMLicious at 1:59 PM on May 9, 2017 [18 favorites]
With the recent thinly-veiled references to "globalists" during the French election we should perhaps be careful combining "rootless" with any version of "global-", lest we accidentally use someone else's dog whistle.
I'm aware that, historically, this is coded speech for "Jews", and that isn't my intention here. That said, I do think "rootless globalists", used in a more ecumenical way, well describes the type of elite bloodsuckers that bring us candidates like Macron and Clinton. Who we are asked to slobberingly welcome because their brand of fire sale economic exploitation is better than being murdered by actual fascists.
posted by ryanshepard at 2:13 PM on May 9, 2017 [9 favorites]
I'm aware that, historically, this is coded speech for "Jews", and that isn't my intention here. That said, I do think "rootless globalists", used in a more ecumenical way, well describes the type of elite bloodsuckers that bring us candidates like Macron and Clinton. Who we are asked to slobberingly welcome because their brand of fire sale economic exploitation is better than being murdered by actual fascists.
posted by ryanshepard at 2:13 PM on May 9, 2017 [9 favorites]
Like I've said before, in ten years the UK is going to look like Britain in 420 AD.
The economy will be a shambles, the money will be useless, no one will know how to put up a house or fix the roads, the aqueducts will all be broken, Hadrian's Wall will be a ruin, and you won't be able to find a Roman soldier anywhere between Carlisle and Portsmouth.
posted by TheWhiteSkull at 2:29 PM on May 9, 2017 [19 favorites]
The economy will be a shambles, the money will be useless, no one will know how to put up a house or fix the roads, the aqueducts will all be broken, Hadrian's Wall will be a ruin, and you won't be able to find a Roman soldier anywhere between Carlisle and Portsmouth.
posted by TheWhiteSkull at 2:29 PM on May 9, 2017 [19 favorites]
Meanwhile, 'Brexit boom' gives Britain record 134 billionaires.
Yay us! When that trickles down, it's going to be so great, the British people will end up grumbling eeyorishly about winning too much.
Long live the Great Brexit Boom, and God Save our Great Leader Kim-Jong-May!
</🍔>
posted by acb at 2:31 PM on May 9, 2017 [1 favorite]
Yay us! When that trickles down, it's going to be so great, the British people will end up grumbling eeyorishly about winning too much.
Long live the Great Brexit Boom, and God Save our Great Leader Kim-Jong-May!
</🍔>
posted by acb at 2:31 PM on May 9, 2017 [1 favorite]
I've said before, in ten years the UK is going to look like Britain in 420 AD
Ripe for the Germans to invade again, declare themselves British, and drive the original inhabitants into Wales/the sea?
posted by Diablevert at 2:41 PM on May 9, 2017 [1 favorite]
Ripe for the Germans to invade again, declare themselves British, and drive the original inhabitants into Wales/the sea?
posted by Diablevert at 2:41 PM on May 9, 2017 [1 favorite]
Ripe for the Germans to invade again, declare themselves British, and drive the original inhabitants into Wales/the sea?
This time it's the Russians, and they're already in their mansions in Highgate and Surrey, drinking samovar tea in their hunting tweeds in settings positively redolent of the finest variety of English prestige.
posted by acb at 2:43 PM on May 9, 2017 [1 favorite]
This time it's the Russians, and they're already in their mansions in Highgate and Surrey, drinking samovar tea in their hunting tweeds in settings positively redolent of the finest variety of English prestige.
posted by acb at 2:43 PM on May 9, 2017 [1 favorite]
I'm aware that, historically, this is coded speech for "Jews", and that isn't my intention here. That said, I do think "rootless globalists", used in a more ecumenical way, well describes the type of elite bloodsuckers that bring us candidates like Macron and Clinton. Who we are asked to slobberingly welcome because their brand of fire sale economic exploitation is better than being murdered by actual fascists.
Maybe just a different term like "passport-collecting" or something like that? That's one of the ways I try to describe this, that collecting passports is a hobby for the wealthy now so that they can spread their wealth and property across multiple countries then ruin any place they live and jump off the sinking ship—like Peter Thiel in the U.S. supporting Trump and the anti-LGBT right wing all the while he's surreptitiously obtained New Zealand citizenship—and you can even see them in forums online discussing their hobby. I think I learned that here on MeFi, perhaps even from you.
The thing is, slurs and epithets against Jews normally have lots of staying power, normally on the scale of centuries or millenia rather than decades. It was only in the MeTa discussion of anti-semitism when maxsparber and many other buttoned that I realized that many things I associated with the 1930s go back much, much further.
posted by XMLicious at 2:59 PM on May 9, 2017 [5 favorites]
For the whole of this year, I've felt like this is no longer my country.…
I concur 100%. It's unbearable.
posted by ambrosen at 3:23 PM on May 9, 2017 [3 favorites]
I concur 100%. It's unbearable.
posted by ambrosen at 3:23 PM on May 9, 2017 [3 favorites]
Brexit is fundamentally destructive and clearly the Leave camp profited from and exploited the rising tide of cultural insecurity and xenophobia. None of these things are any good. But they result in part from the way in which the EU has sought to push its purview over the past decade-and-a-half or so -- with very mixed results. The Euro is a disaster. The Eastern enlargements of 2004 and 2007 created cultural and political friction that persists to this day. The Lisbon agreement was rammed through with blatant disregard for popular opinion in founding member states. The association treaty with Ukraine was catastrophically mismanaged. Then there's the negotiations with Turkey, the "rescue" of Greece, the politics of austerity, ...
The people of Europe are right to challenge inept and callous policies that serve only to prop up the interests of big business and some faintly imperialistic "prestige". But I wish they would do so by coming together, not falling apart.
posted by dmh at 3:31 PM on May 9, 2017 [7 favorites]
The people of Europe are right to challenge inept and callous policies that serve only to prop up the interests of big business and some faintly imperialistic "prestige". But I wish they would do so by coming together, not falling apart.
posted by dmh at 3:31 PM on May 9, 2017 [7 favorites]
Off-topic or topic-adjacent at best, but I managed only to suffer second/third-hand The Murdoch Times' Rich List crowing that Brexit hadn't made Brits (That Matter) poorer after all, since all their substantial personal non-Sterling investments had become worth so much more since the pound's value dropped post-vote. Gosh, how wonderful for the immigrant-hating man in the street! What marvellous wealth creation for the nation! Why the NHS is all but saved... from these very same people who intend to buy it, load it with their debt from its purchase and then gut both it and whoops! you and I in the process.
What a day, what a day if you can look it in the face and hold your vomit.
posted by comealongpole at 5:14 PM on May 9, 2017 [3 favorites]
What a day, what a day if you can look it in the face and hold your vomit.
posted by comealongpole at 5:14 PM on May 9, 2017 [3 favorites]
Brexit is fundamentally destructive and clearly the Leave camp profited from and exploited the rising tide of cultural insecurity and xenophobia. None of these things are any good. But they result in part from the way in which the EU has sought to push its purview over the past decade-and-a-half or so -- with very mixed results. The Euro is a disaster. The Eastern enlargements of 2004 and 2007 created cultural and political friction that persists to this day. The Lisbon agreement was rammed through with blatant disregard for popular opinion in founding member states. The association treaty with Ukraine was catastrophically mismanaged. Then there's the negotiations with Turkey, the "rescue" of Greece, the politics of austerity, ...
The people of Europe are right to challenge inept and callous policies that serve only to prop up the interests of big business and some faintly imperialistic "prestige". But I wish they would do so by coming together, not falling apart.
The thing is every student of history can tell you that everything is always a disaster. The question is whether it is the best or the worst disaster.
The EU was the best disaster Europe has ever produced. Brexit is probably going to down as one of Britain's greatest self-inflicted wounds.
posted by srboisvert at 5:20 PM on May 9, 2017 [19 favorites]
The people of Europe are right to challenge inept and callous policies that serve only to prop up the interests of big business and some faintly imperialistic "prestige". But I wish they would do so by coming together, not falling apart.
The thing is every student of history can tell you that everything is always a disaster. The question is whether it is the best or the worst disaster.
The EU was the best disaster Europe has ever produced. Brexit is probably going to down as one of Britain's greatest self-inflicted wounds.
posted by srboisvert at 5:20 PM on May 9, 2017 [19 favorites]
The article hit on a pretty important point: What does the U.K. produce that the rest of the world wants to buy, and is that enough to run an economy on?
On the one hand, that can be a smug, dismissive position to take. But, it also seems to be an economic reality.
posted by Pirate-Bartender-Zombie-Monkey at 7:22 PM on May 9, 2017 [4 favorites]
On the one hand, that can be a smug, dismissive position to take. But, it also seems to be an economic reality.
posted by Pirate-Bartender-Zombie-Monkey at 7:22 PM on May 9, 2017 [4 favorites]
If one looks at the British pound as a function of energy and EROI:
You have coal, the colonial importation of energy-as-goods, the slow decline of the pound once those 2 were not around up until the off-shore drilling of the last 1970's.
Now the off-shore energy placed into the market at a steep discount is going away. Where else is the economy gonna go but away also?
posted by rough ashlar at 7:38 PM on May 9, 2017 [1 favorite]
You have coal, the colonial importation of energy-as-goods, the slow decline of the pound once those 2 were not around up until the off-shore drilling of the last 1970's.
Now the off-shore energy placed into the market at a steep discount is going away. Where else is the economy gonna go but away also?
posted by rough ashlar at 7:38 PM on May 9, 2017 [1 favorite]
Without the bureaucracy of the EU the U.K. will be well positioned.
When the people of Greece, Italy, and Spain finally realize that the euro has been a conduit transferring wealth from them to German and American banks they will be very unhappy.
posted by NeoRothbardian at 8:43 PM on May 9, 2017
When the people of Greece, Italy, and Spain finally realize that the euro has been a conduit transferring wealth from them to German and American banks they will be very unhappy.
posted by NeoRothbardian at 8:43 PM on May 9, 2017
WhiteSkull-
The euro is a sure bet to join the ranks of many hundreds of defunct paper currencies. Not one currency in today’s world is backed by a commodity (like gold); they’re backed only by confidence (which can vanish like a pile of feathers in a hurricane). And, of course, the ability of governments to steal from the people. But the euro doesn’t even have that going for it. The European Union doesn’t have the power to tax. Right now, the Eurocrats in Brussels really only have the power to regulate. I’ve long said, “While the U.S. dollar is an ‘IOU nothing,’ the euro is a ‘who owes you nothing.’
The ECU is wonderful- free trade system approximating a Free Market. The euro is a fiat disaster.
posted by NeoRothbardian at 8:47 PM on May 9, 2017
The euro is a sure bet to join the ranks of many hundreds of defunct paper currencies. Not one currency in today’s world is backed by a commodity (like gold); they’re backed only by confidence (which can vanish like a pile of feathers in a hurricane). And, of course, the ability of governments to steal from the people. But the euro doesn’t even have that going for it. The European Union doesn’t have the power to tax. Right now, the Eurocrats in Brussels really only have the power to regulate. I’ve long said, “While the U.S. dollar is an ‘IOU nothing,’ the euro is a ‘who owes you nothing.’
The ECU is wonderful- free trade system approximating a Free Market. The euro is a fiat disaster.
posted by NeoRothbardian at 8:47 PM on May 9, 2017
When the people of Greece, Italy, and Spain finally realize that the euro has been a conduit transferring wealth from them to German and American banks they will be very unhappy.
We've known it for years, but we are still more pro-Europe than against. I would rather have Angela Merkel at the helm than Theresa May; at least Merkel, despite the authority measures, has a moral spine of her own and is doing the right thing with the Syrian refugees.
posted by sukeban at 10:26 PM on May 9, 2017 [7 favorites]
We've known it for years, but we are still more pro-Europe than against. I would rather have Angela Merkel at the helm than Theresa May; at least Merkel, despite the authority measures, has a moral spine of her own and is doing the right thing with the Syrian refugees.
posted by sukeban at 10:26 PM on May 9, 2017 [7 favorites]
The EU was the best disaster Europe has ever produced.
The EEC/EC yes. The EU perhaps not so much.
posted by dmh at 10:32 PM on May 9, 2017
The EEC/EC yes. The EU perhaps not so much.
posted by dmh at 10:32 PM on May 9, 2017
Without the bureaucracy of the EU the U.K. will be well positioned.
The EU has a bureaucracy, and it's far from perfect, but it's pretty small and efficient for what it does, and the effect it has, pretty much the whole point, is to reduce paperwork and red tape.
There's only about 30,000 staff. If they're micromanaging everything in Europe they must be amazing.
If UK businesses produce goods that don't meet EU specs they aren't going to sell them in Europe legally. Is the plan that the UK becomes a worldwide hub for shoddy products sold out of suitcases in backstreets all around the world?
I'm scared that Brexit has become the deliberate creation of an economic and social disaster so that opportunist fools (on both left and right) can try to take advantage of the disruption and plunder the ruins.
posted by BinaryApe at 11:26 PM on May 9, 2017 [7 favorites]
The EU has a bureaucracy, and it's far from perfect, but it's pretty small and efficient for what it does, and the effect it has, pretty much the whole point, is to reduce paperwork and red tape.
There's only about 30,000 staff. If they're micromanaging everything in Europe they must be amazing.
If UK businesses produce goods that don't meet EU specs they aren't going to sell them in Europe legally. Is the plan that the UK becomes a worldwide hub for shoddy products sold out of suitcases in backstreets all around the world?
I'm scared that Brexit has become the deliberate creation of an economic and social disaster so that opportunist fools (on both left and right) can try to take advantage of the disruption and plunder the ruins.
posted by BinaryApe at 11:26 PM on May 9, 2017 [7 favorites]
I guess if Brexit leads to the collapse of the British financial services industry, then eventually we might end up with a saner, more diverse economy that works well for more people.
But, you know, in 1845 Irish agriculture was overly dependent on the potato. Potato blight wasn’t a great way to address the problem.
posted by Bloxworth Snout at 1:20 AM on May 10, 2017 [6 favorites]
But, you know, in 1845 Irish agriculture was overly dependent on the potato. Potato blight wasn’t a great way to address the problem.
posted by Bloxworth Snout at 1:20 AM on May 10, 2017 [6 favorites]
Well, on the longterm (after the whole Brexit fiasco), the British economy might recover. Considering that they will probably start investing into their own country, the work-capacity will rise, they will start exporting new products on the market, etc...
posted by carrier1 at 1:24 AM on May 10, 2017
posted by carrier1 at 1:24 AM on May 10, 2017
There's an important distinction between two questions: whether the negative economic effects of leaving the EU will be severe, and whether they'll be sudden.
The studies I found scariest were things like this, reporting that without economic integration, per capita incomes would have been 12% lower. That's a severe impact. But it's not a sudden impact: these effects take decades to arise. The difference in annual growth rates is in fractions of a percent, which doesn't sound too scary to people who don't understand exponential maths.
A study I didn't find scary was this HM Treasury analysis: the immediate economic impact of leaving the EU. That looked at the immediate two years after the vote and gave terrifying predictions of a year-long recession, and unemployment skyrocketing by 500,000 to 800,000. That's both sudden and severe. The reason it wasn't scary was that it sounded like complete bullshit. This is over the two year negotiation period, before any actual economic changes have happened. There's nothing solid to even put into an economic model.
There was phrase going round after the referendum that Remain lost because their "complex truth was overcome by simple lies". But that was never entirely true. Tim Shipman's book All Out War points out that the official Remain campaign was largely the same Conservative Party team that had won two victories for David Cameron. (With some differences: Lynton Crosby was absent, a few Labour people were in peripheral positions). Official Remain were not naive technocrats haplessly brandishing cryptic spreadsheets: they were experienced political operators. It seems to me that they leaned on people who should have known better to make predictions of sudden impacts, which they thought would be scarier to more potential voters.
But after losing the referendum, this created a huge problem for anyone wanting to campaign for a soft Brexit,. With the right wing media gloating over short-term predictions that didn't happen, it undermined the credibility of anyone arguing that negative economic consequences will happen after the actual changes happen.
Another problem is that some soft Brexit campaigners still seem to be relying on the negative economic impact to be sudden. But if it impacts growth rates, it's quite possible for Brexit to cause enormous harm in the long term, without having any sudden impact. It might not be a case standing on a heap of rubble shouting "I told you so, you fools" in the next two years, it might be more a case of pointing at the slope of graphs in ten or twenty years.
That's not certain: if negotiations break down, or markets panic, then there might be a sudden impact. But an anti- or soft-Brexit strategy that relies on public opinion shifting after a sudden economic hit, is relying on something that might not happen even if Brexit is a long-term disaster.
posted by TheophileEscargot at 1:26 AM on May 10, 2017 [11 favorites]
The studies I found scariest were things like this, reporting that without economic integration, per capita incomes would have been 12% lower. That's a severe impact. But it's not a sudden impact: these effects take decades to arise. The difference in annual growth rates is in fractions of a percent, which doesn't sound too scary to people who don't understand exponential maths.
A study I didn't find scary was this HM Treasury analysis: the immediate economic impact of leaving the EU. That looked at the immediate two years after the vote and gave terrifying predictions of a year-long recession, and unemployment skyrocketing by 500,000 to 800,000. That's both sudden and severe. The reason it wasn't scary was that it sounded like complete bullshit. This is over the two year negotiation period, before any actual economic changes have happened. There's nothing solid to even put into an economic model.
There was phrase going round after the referendum that Remain lost because their "complex truth was overcome by simple lies". But that was never entirely true. Tim Shipman's book All Out War points out that the official Remain campaign was largely the same Conservative Party team that had won two victories for David Cameron. (With some differences: Lynton Crosby was absent, a few Labour people were in peripheral positions). Official Remain were not naive technocrats haplessly brandishing cryptic spreadsheets: they were experienced political operators. It seems to me that they leaned on people who should have known better to make predictions of sudden impacts, which they thought would be scarier to more potential voters.
But after losing the referendum, this created a huge problem for anyone wanting to campaign for a soft Brexit,. With the right wing media gloating over short-term predictions that didn't happen, it undermined the credibility of anyone arguing that negative economic consequences will happen after the actual changes happen.
Another problem is that some soft Brexit campaigners still seem to be relying on the negative economic impact to be sudden. But if it impacts growth rates, it's quite possible for Brexit to cause enormous harm in the long term, without having any sudden impact. It might not be a case standing on a heap of rubble shouting "I told you so, you fools" in the next two years, it might be more a case of pointing at the slope of graphs in ten or twenty years.
That's not certain: if negotiations break down, or markets panic, then there might be a sudden impact. But an anti- or soft-Brexit strategy that relies on public opinion shifting after a sudden economic hit, is relying on something that might not happen even if Brexit is a long-term disaster.
posted by TheophileEscargot at 1:26 AM on May 10, 2017 [11 favorites]
I thought at the time that the referendum asked people to vote on a pig in a poke, and to a great extent that's still the situation; we don't actually know what Brexit means. A rough personal score sheet from my uninformed position would go as follows: I invite you to disagree and/or educate me.
* Net contribution; the UK really ought to just make a simple saving. There's all the stuff about 100 billion euros, but it seems to be posturing.
*Fisheries: really ought to be a straight win for the UK: British fishermen get better quotas and we can manage our fish stocks better (surely).
*Agriculture: who knows? Even though this is huge, I don't know what the government's vision is - moving towards world market prices, or even more protection, say against imports from lower-welfare countries, or against cheap milk imports? Somewhere in the middle - enhanced and customised environmental measures but a cut overall? No clue. Could be a positive, could well be a disaster. I don't understand why farmers are not making more fuss about this.
*Trade in goods: depends on the deal. Could be a non-event. External tariffs would be bad, but not the disaster people suggest, unless we're nuts enough to start a trade war, which is not to be altogether ruled out going by current rhetoric.
*Trade in services: looking bad on the finance side, (though I'm not going to suddenly flip and start thinking the economy should be run for the benefit of the City). Almost certainly some business will transfer out, but the EU would look more credible as a new home for much of this business if it hadn't made clear its desire for witholding tax and all sorts of extra regulation.
*Immigration: we don't know what the policy is. On the optimistic side intelligent controls could encourage much-needed productivity improvements; but that would be painful in the short term, so don't count on it. Otherwise, stringent restrictions could cause rising costs and a significant hit to growth through lack of expertise and labour.
*Inward investment: no impact yet, but definitely something to worry about in the medium term. This is an area like several others where the fundamentals may not be as bad as people think, but people thinking they're bad is very negative in itself if it affects general sentiment.
*Irish border: the government seems to be sleep-walking towards a disaster. The problems are really serious and difficult, and they're not even being adddressed properly.
*Scottish independence; not looking likely now, especially if the corpse of Tory Scotland awakes in the form of several MPs in the next election, as is forecast.
*Imponderable anti-British feeling: not to be underestimated; may lead to a whole series of problems: Gibraltar, the Le Touquet treaty, co-operation in a range of non-EU european projects. Will enhanced co-operation within the anglosphere/Commonwealth compensate? Not holding my breath.
posted by Segundus at 2:15 AM on May 10, 2017 [1 favorite]
* Net contribution; the UK really ought to just make a simple saving. There's all the stuff about 100 billion euros, but it seems to be posturing.
*Fisheries: really ought to be a straight win for the UK: British fishermen get better quotas and we can manage our fish stocks better (surely).
*Agriculture: who knows? Even though this is huge, I don't know what the government's vision is - moving towards world market prices, or even more protection, say against imports from lower-welfare countries, or against cheap milk imports? Somewhere in the middle - enhanced and customised environmental measures but a cut overall? No clue. Could be a positive, could well be a disaster. I don't understand why farmers are not making more fuss about this.
*Trade in goods: depends on the deal. Could be a non-event. External tariffs would be bad, but not the disaster people suggest, unless we're nuts enough to start a trade war, which is not to be altogether ruled out going by current rhetoric.
*Trade in services: looking bad on the finance side, (though I'm not going to suddenly flip and start thinking the economy should be run for the benefit of the City). Almost certainly some business will transfer out, but the EU would look more credible as a new home for much of this business if it hadn't made clear its desire for witholding tax and all sorts of extra regulation.
*Immigration: we don't know what the policy is. On the optimistic side intelligent controls could encourage much-needed productivity improvements; but that would be painful in the short term, so don't count on it. Otherwise, stringent restrictions could cause rising costs and a significant hit to growth through lack of expertise and labour.
*Inward investment: no impact yet, but definitely something to worry about in the medium term. This is an area like several others where the fundamentals may not be as bad as people think, but people thinking they're bad is very negative in itself if it affects general sentiment.
*Irish border: the government seems to be sleep-walking towards a disaster. The problems are really serious and difficult, and they're not even being adddressed properly.
*Scottish independence; not looking likely now, especially if the corpse of Tory Scotland awakes in the form of several MPs in the next election, as is forecast.
*Imponderable anti-British feeling: not to be underestimated; may lead to a whole series of problems: Gibraltar, the Le Touquet treaty, co-operation in a range of non-EU european projects. Will enhanced co-operation within the anglosphere/Commonwealth compensate? Not holding my breath.
posted by Segundus at 2:15 AM on May 10, 2017 [1 favorite]
The combination of the total insanity that is Brexit, the destruction that it will wreak, the forthcoming one-party state, and a Tory one at that, *and* Theresa May's own very controlling instincts are truly bleak.
Add to this the inevitable reckoning that will come at some point, e.g. when the wheels really start to fall off the economy.
But what shape will that reckoning take? People suddenly realising they were stupid, or duped? Extremely unlikely. More likely, people will turn viciously on the EU, non-British passport holders, people with multiple nationality, non-white-skin, Scottish, and so on.
How long will it be before "Are you neighbours doing their bit for Brexit?"
And before anyone says "don't be so negative", I'll just pop this here. Do you know how long the Nissan plant can withstand a delay in its pipeline? Seven seconds - it's that tightly run. So, do you think they'll stick around and risk leaving the customs union? They simply can't.
posted by rolandroland at 3:56 AM on May 10, 2017 [2 favorites]
Add to this the inevitable reckoning that will come at some point, e.g. when the wheels really start to fall off the economy.
But what shape will that reckoning take? People suddenly realising they were stupid, or duped? Extremely unlikely. More likely, people will turn viciously on the EU, non-British passport holders, people with multiple nationality, non-white-skin, Scottish, and so on.
How long will it be before "Are you neighbours doing their bit for Brexit?"
And before anyone says "don't be so negative", I'll just pop this here. Do you know how long the Nissan plant can withstand a delay in its pipeline? Seven seconds - it's that tightly run. So, do you think they'll stick around and risk leaving the customs union? They simply can't.
posted by rolandroland at 3:56 AM on May 10, 2017 [2 favorites]
How long will it be before "Are you neighbours doing their bit for Brexit?"
My guess for what the Conservative Party's 2022 reelection slogan will be is “MAKE THE TRAITORS PAY”.
posted by acb at 5:52 AM on May 10, 2017 [3 favorites]
My guess for what the Conservative Party's 2022 reelection slogan will be is “MAKE THE TRAITORS PAY”.
posted by acb at 5:52 AM on May 10, 2017 [3 favorites]
I invite you to disagree and/or educate me....Trade in goods: depends on the deal. Could be a non-event. External tariffs would be bad, but not the disaster people suggest, unless we're nuts enough to start a trade war, which is not to be altogether ruled out going by current rhetoric.
I don't disagree with much of what you say but I think the complexity of what lies ahead is being grossly underestimated.
I don't think the payment to the EU is a bluff. The EU has stated that if the UK refuses to pay its bills, then they cannot begin a trade deal.
Without a trade deal, the UK will crash out of the EU on March 2019. I don't think that means that a few tariffs will go up. Even WTO deals need to be approved. Borders will shut down without an agreement or a customs union. I am thinking thousands of trucks stuck at the border and freight vessels forced to wait months before inspection. Airline travel to Europe shuts down too and a host of other bilateral agreements which are under the enormous umbrella called 'the EU'.
All that said, let me say that Brexit isn't impossible. But a responsible government would have realized this is a 10-year project at least and been honest with its voters about this. The aggressive, incompetent manner in which is is being done is so ludicrous that it sometimes makes us Remoaners wonder whether it is almost a deliberate act of sabotage.
posted by vacapinta at 7:26 AM on May 10, 2017 [7 favorites]
I don't disagree with much of what you say but I think the complexity of what lies ahead is being grossly underestimated.
I don't think the payment to the EU is a bluff. The EU has stated that if the UK refuses to pay its bills, then they cannot begin a trade deal.
Without a trade deal, the UK will crash out of the EU on March 2019. I don't think that means that a few tariffs will go up. Even WTO deals need to be approved. Borders will shut down without an agreement or a customs union. I am thinking thousands of trucks stuck at the border and freight vessels forced to wait months before inspection. Airline travel to Europe shuts down too and a host of other bilateral agreements which are under the enormous umbrella called 'the EU'.
All that said, let me say that Brexit isn't impossible. But a responsible government would have realized this is a 10-year project at least and been honest with its voters about this. The aggressive, incompetent manner in which is is being done is so ludicrous that it sometimes makes us Remoaners wonder whether it is almost a deliberate act of sabotage.
posted by vacapinta at 7:26 AM on May 10, 2017 [7 favorites]
Airline travel to Europe shuts down too and a host of other bilateral agreements which are under the enormous umbrella called 'the EU'.
The few people with the need and means to travel between the EU and UK will have to change planes in a third-party nation. Norway, Iceland and Turkey could do well out of this. Though perhaps they'll set up some exclave in the Channel Islands to capture some of this traffic as well.
It'll be a bit like the businesspeople needing to go between, say, Israel and Saudi Arabia, and doing so via Cyprus or somewhere neutral.
posted by acb at 7:56 AM on May 10, 2017
The few people with the need and means to travel between the EU and UK will have to change planes in a third-party nation. Norway, Iceland and Turkey could do well out of this. Though perhaps they'll set up some exclave in the Channel Islands to capture some of this traffic as well.
It'll be a bit like the businesspeople needing to go between, say, Israel and Saudi Arabia, and doing so via Cyprus or somewhere neutral.
posted by acb at 7:56 AM on May 10, 2017
I think the complexity of what lies ahead is being grossly underestimated
No doubt about that!
I don't think the payment to the EU is a bluff.
Well, so far as I know there's no reason other than bargaining posture why a trade deal can't be discussed in parallel, and the legal basis for the 100 bn appears shaky. I have read that the Commission itself has advised that the claim is not legally well founded.
I think you're mistaken about borders closing without a new trade deal. I don't believe a new WTO agreement is required, it's in place already.
whether it is almost a deliberate act of sabotage.
Well yes, but on whose part? The two-year limit (which I agree is daft) is in the Treaty; it's the EU side that refused informal talks before Article 50 was triggered (indeed, blustered impotently about how Article 50 must be triggered immediately after the referendum); it's the EU side that now refuses to discuss a trade deal of mutual advantage until its dubious demand for 60, no, 100 billion is agreed in full. Maybe it's the EU that wants to 'crash out' of the UK market, though the damage is to both sides? (Actually in terms of trade the impact would not be evenly distributed; some parts of the EU would barely notice, whereas Ireland is in for an extra big helping of undeserved grief given the quantity of trade it does with the UK)
I should like to make it clear that I am a Remain voter myself, though I don't identify as Remainer tribe.
posted by Segundus at 8:59 AM on May 10, 2017 [1 favorite]
No doubt about that!
I don't think the payment to the EU is a bluff.
Well, so far as I know there's no reason other than bargaining posture why a trade deal can't be discussed in parallel, and the legal basis for the 100 bn appears shaky. I have read that the Commission itself has advised that the claim is not legally well founded.
I think you're mistaken about borders closing without a new trade deal. I don't believe a new WTO agreement is required, it's in place already.
whether it is almost a deliberate act of sabotage.
Well yes, but on whose part? The two-year limit (which I agree is daft) is in the Treaty; it's the EU side that refused informal talks before Article 50 was triggered (indeed, blustered impotently about how Article 50 must be triggered immediately after the referendum); it's the EU side that now refuses to discuss a trade deal of mutual advantage until its dubious demand for 60, no, 100 billion is agreed in full. Maybe it's the EU that wants to 'crash out' of the UK market, though the damage is to both sides? (Actually in terms of trade the impact would not be evenly distributed; some parts of the EU would barely notice, whereas Ireland is in for an extra big helping of undeserved grief given the quantity of trade it does with the UK)
I should like to make it clear that I am a Remain voter myself, though I don't identify as Remainer tribe.
posted by Segundus at 8:59 AM on May 10, 2017 [1 favorite]
it's the EU side that now refuses to discuss a trade deal of mutual advantage
There's a perfectly fine trade deal already in place that unfortunately was less important than appeasing Tory backbenchers and selling tabloids on EU outrage.
posted by ersatz at 2:42 PM on May 10, 2017 [4 favorites]
There's a perfectly fine trade deal already in place that unfortunately was less important than appeasing Tory backbenchers and selling tabloids on EU outrage.
posted by ersatz at 2:42 PM on May 10, 2017 [4 favorites]
Fisheries: really ought to be a straight win for the UK: British fishermen get better quotas and we can manage our fish stocks better (surely).
Fishing quotas will be the subject of yet more negiotiation with the EU and possible legal challenges.
posted by penguinliz at 4:02 PM on May 10, 2017
Fishing quotas will be the subject of yet more negiotiation with the EU and possible legal challenges.
posted by penguinliz at 4:02 PM on May 10, 2017
I love this thinking along the lines of "if we have no deal, it'll be rough for a while, then we'll work things out and all will be fine. Might be a bit difficult, but with stiff upper lip, we'll pick ourselves up and get on with it".
Maybe true. But the UK, *we*, will have to do it without:
- Any globalised businesses, e.g. Nissan, they won't wait, they can't wait.
- Any banks - likewise. Can't wait.
- Any scientists with substantial EU grants - they'll be whisked up by EU Universities.
- Any bright, multi-lingual students - from anywhere - why would they come to a broken backwater?
So, in the end it might be fine. But that end might take 50 years of shit.
posted by rolandroland at 3:24 AM on May 11, 2017 [2 favorites]
Maybe true. But the UK, *we*, will have to do it without:
- Any globalised businesses, e.g. Nissan, they won't wait, they can't wait.
- Any banks - likewise. Can't wait.
- Any scientists with substantial EU grants - they'll be whisked up by EU Universities.
- Any bright, multi-lingual students - from anywhere - why would they come to a broken backwater?
So, in the end it might be fine. But that end might take 50 years of shit.
posted by rolandroland at 3:24 AM on May 11, 2017 [2 favorites]
The few people with the need and means to travel between the EU and UK will have to change planes in a third-party nation.
I think it's safe to say that direct EU-UK flights will continue with very little trouble. This is a solved problem. The biggest trouble comes for the UK based low cost airlines with aircraft based in the EU (mainly Easyjet and flybe), whose business models count on those economies of scale. And of course Ryanair will remove itself from UK domestic routes. Which is fine if you're in London and you can get everywhere in Britain by train, but if you want to go the 300 miles from Bristol to Newcastle*, yes, you're going to sacrifice a lot of comfort if you go by rail.
I can't really believe that people think it's OK for UK-EU flights to be restricted to 1950s levels, at least with the economy running at its current carbon intensity. It's not really possible to run an industrialised nation without a fair amount of international travel, and any changes should have their impact thoroughly considered.
*You only hear southern accents on this flight, for a perspective on economic inequality in England.
posted by ambrosen at 5:20 AM on May 11, 2017
I think it's safe to say that direct EU-UK flights will continue with very little trouble. This is a solved problem. The biggest trouble comes for the UK based low cost airlines with aircraft based in the EU (mainly Easyjet and flybe), whose business models count on those economies of scale. And of course Ryanair will remove itself from UK domestic routes. Which is fine if you're in London and you can get everywhere in Britain by train, but if you want to go the 300 miles from Bristol to Newcastle*, yes, you're going to sacrifice a lot of comfort if you go by rail.
I can't really believe that people think it's OK for UK-EU flights to be restricted to 1950s levels, at least with the economy running at its current carbon intensity. It's not really possible to run an industrialised nation without a fair amount of international travel, and any changes should have their impact thoroughly considered.
*You only hear southern accents on this flight, for a perspective on economic inequality in England.
posted by ambrosen at 5:20 AM on May 11, 2017
*You only hear southern accents on this flight, for a perspective on economic inequality in England.
Isn't the flight cheaper than the train?
posted by acb at 5:31 AM on May 11, 2017
Isn't the flight cheaper than the train?
posted by acb at 5:31 AM on May 11, 2017
The flight would almost certainly be multiple times cheaper than the train, as well as being faster.
Also, I think equating accent with income (however loosely) is generally misleading and divisive.
posted by threetwentytwo at 6:19 AM on May 11, 2017
Also, I think equating accent with income (however loosely) is generally misleading and divisive.
posted by threetwentytwo at 6:19 AM on May 11, 2017
Also, I think equating accent with income (however loosely) is generally misleading and divisive.
If its misleading its divisive, if its reasonably accurate then its the underlying macroeconomic circumstances that are divisive. Evidence either way would be interesting.
posted by biffa at 6:32 AM on May 11, 2017
If its misleading its divisive, if its reasonably accurate then its the underlying macroeconomic circumstances that are divisive. Evidence either way would be interesting.
posted by biffa at 6:32 AM on May 11, 2017
Steven Brakman, Harry Garretsen, Tristan Kohl 11 May 2017
Options for a ‘Global Britain’ after Brexit
New trade deals for the UK will be an important part of the Brexit negotiations, not only with the EU but also with the rest of the world. This column argues, however, that the UK has no trade-enhancing alternative to an agreement with the EU that essentially mimics its current situation as an EU member. A gravity model predicts that the negative impact of Brexit would be only marginally offset by a bilateral trade agreement with the US, and even in the case of trade agreements with all non-EU countries, the UK’s value-added exports would still fall by more than 6%.
posted by infini at 8:06 AM on May 11, 2017
Options for a ‘Global Britain’ after Brexit
New trade deals for the UK will be an important part of the Brexit negotiations, not only with the EU but also with the rest of the world. This column argues, however, that the UK has no trade-enhancing alternative to an agreement with the EU that essentially mimics its current situation as an EU member. A gravity model predicts that the negative impact of Brexit would be only marginally offset by a bilateral trade agreement with the US, and even in the case of trade agreements with all non-EU countries, the UK’s value-added exports would still fall by more than 6%.
posted by infini at 8:06 AM on May 11, 2017
I was equating accent of people travelling between Bristol and Newcastle with where they lived. And the fact that most people travelling (on a weekday) are based in the South West rather than Tyne and Wear implies that it's the South West economy that's generating the journeys. Between the South West and Central Scotland, it's about 50% Scottish/English.
posted by ambrosen at 10:36 AM on May 11, 2017
posted by ambrosen at 10:36 AM on May 11, 2017
European businesses turn their backs on British suppliers
posted by infini at 3:09 AM on May 15, 2017 [1 favorite]
posted by infini at 3:09 AM on May 15, 2017 [1 favorite]
“There’s not a bleep about food policy coming from ministers. There has been a stunning silence from Andrea Leadsom, the Defra minister, on this matter of national importance. Basically, if on March 31, 2019, migrant labour is not sorted the food system is fucked.” And then he says, “I hope those who voted Brexit and who still want to eat British are prepared to go to Lincolnshire in winter to pick vegetables.” Or as Wright puts it, “Food is at the heart of national security. If you can’t feed a country you haven’t got a country.”Brexit and the Coming Food Crisis
posted by Pirate-Bartender-Zombie-Monkey at 1:48 PM on May 21, 2017
So after the last few days, what are the odds that May called this election because she's gotten bored and wants to drop the entire Brexit negotiation mess in Corbyn's lap?
posted by effbot at 2:07 PM on May 22, 2017 [1 favorite]
posted by effbot at 2:07 PM on May 22, 2017 [1 favorite]
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This thread has been archived and is closed to new comments
Nationalism might be good for angrying up the marks, but no one on top takes it with any real seriousness these days.
posted by ryanshepard at 12:02 PM on May 9, 2017 [1 favorite]