Miscellaneous And Off Topic Subjects

[hack]

Agreed -- a free-trade bloc is doable and was done. They got more ambitious, and, for whatever reason, moved into territory in which there were going to be lots of unforseen consequences. As with anything else though, whatever approach you choose will have strengths and weaknesses, and a full cost-benefit analysis is appropriate. What's not appropriate is focusing on one flaw and ignoring others. If you applied that approach to everything then nothing would be good.

The best anti-remain piece I saw was what talent posted a few weeks back, but it still doesn't match up to the hard numbers. The hard numbers tell a clear story, which is that, warts and all, Britain wold be better off within the EU. We'll see what happens from here. The negotiated exit followed up by the question of how to handle trade will be interesting. The EU's relentless need to compromise could lead to it giving Britain favorable enough terms to reengage without formal membership, and remake the economic assumptions. But that's just an on-paper potential outcome.

You can blame the EU idea for Greece, but you cannot blame the current body. Blame Germany for that. Germany's failure to perform a cost-benefit analysis, and insistence on focusing on one factor, may be remembered as a catalyst for moving the accepted norms on what to do with a sovereign with a balance-sheet crisis. The IMF won't likely be there in the future to fight on behalf of the Washington Consensus. Merkel won the battle but it's Yannis Varoufakis who may end up winning this war, so to speak.

[iam416]

If others follow the UK, then the EU will have no choice but to engage in free trade.

The EU might, however, try to stick it to the UK to prevent others from leaving.

[hack]

The EU engages in plenty of free trade. That's about tarrifs primarily, and only secondarily about product standards. If they weren't made by Brussels they'd be made by the governments of 28 individual states. So ultimately you're talking about a theoretical marginal difference in regulatory burden. And everybody benefits from common standards. When you can produce for a harmonized market of 300m+, the cost of compliance falls as do the cost of goods. Realities like that have to be balanced against the theory-based opposition to additional layers of government with the potential for overreach. Again, cost-benefit analysis.

All of which is a cover for the real story, which is freedom of movement. If European leaders had to do it over again they probably shouldn't have pushed for the EU passport. Remove people's ability to vote on racism but pretend they are voting on other concerns, and you lose a whole ton of momentum for the whole thing. The common currency was a market disaster, and the freedom of movement was a social one.

[Jeff Buchanan]

Hack, your link takes me to the front page of FT and ask's me to sign up for it. Once that's overcome, I'm on the front page. You can click on a link to the BREXIT Hub ....... What's the name of the article you want to link us to. I can find it that way.

[Wild Hoss]

Hoss is exactly right.

I want to change my opinion! :-D

[hack]

Jeff, here's the text:





Brexit: what is in store for the UK economy?
Emily Cadman

In the run-up to Britain’s historic vote on whether to leave the EU, the consensus among economists was clear: Brexit will hurt growth. Even many committed supporters acknowledged the prospect of a short-term economic hit.
But now that the country appears to have decided to leave, many big questions remain. Will the British economy struggle and stagnate outside the single market? Or will it quickly recover from the initial impact and become more dynamic?
What practically all of the assessments conclude is that by 2030 the nation will be poorer outside the EU than it otherwise would be. Now the question is whether reality will follow such predictions.
Forecasts for the path of UK GDP post-Brexit
Here is the FT’s analysis of the range of estimates by leading authorities and the assumptions and arguments behind them:

A gain for the UK: Patrick Minford
The prediction: Professor Minford’s bullish scenario is at odds with the consensus. It foresees gross domestic product increasing by a cumulative 4 per cent by 2020 due to Brexit.
The reasoning: Trade would be boosted by unilaterally scrapping all import tariffs and relying on World Trade Organisation rules. Dumping regulations in areas such as working hours, gender equality and climate change would boost business.
Criticism: The highly theoretical model assumes Britain only imports from EU countries because the bloc’s common customs tariff artificially protects goods from world competition. Prof Minford himself has said that the UK’s manufacturing industry would be mostly eliminated when exposed to the full force of global price competition.
Limited impact only: Open Europe
The prediction: Leaving will not affect GDP more than 1 per cent either way. A protectionist stance on issues such as immigration would hit the economy. But under more liberal policies the country would prosper marginally more out of the EU than in.
The reasoning: The think-tank suggests that foreign direct investment crowds out domestic investment rather than adding to it. That means productivity would not be particularly badly hit by a fall in FDI.
Criticism: The paper assumes questionably large potential savings from a bonfire of regulation — including scrapping some workplace rights.
Costly in most scenarios: Oxford Economics
The prediction: An exit will harm Britain’s economy in eight out of nine scenarios, with the impact ranging from 0.1 per cent to 3.9 per cent of GDP by 2030. This is mainly due to the cost of trade rising.
The reasoning: The only favourable scenario is one in which migration continues as normal, Britain gets rid of regulations on workers and stays in an EU customs union.
Criticism: The optimistic scenario, in which Britain negotiates a settlement that preserves many of its rights in the EU, is not necessarily credible.
Big hit to wages: National Institute of Economic and Social Research
The prediction: GDP, real wages and household consumption will all fall markedly after leaving the EU. While some of the short-term shock dissipates, the transition continues to weigh in the longer term, resulting in a loss to GDP of 1.9-7.8 per cent by 2030.
The reasoning: Any future trading arrangement with Europe will be less beneficial for the UK than is the current single market arrangement. There will be lower demand for UK exports, a depreciation of the pound and a rise in the cost of imports. This hits both wages and consumption.
Criticism It does not attempt to model the impact of changing migration policies.
Growth dented, but some mitigation possible: CBI/PwC
The prediction: Leaving will drag down Britain’s economy over the next five years, but if the UK struck free-trade deals with the EU and the US, some damage could be repaired.
The hit would range from a loss of 1.2-3.5 per cent of GDP by 2030.
The reasoning: Brexit will stoke uncertainty, increasing the cost of corporate debt and subsequently hitting investment and consumption.
There will be some savings from looser regulation and the UK population will no longer rise so fast due to greater controls on unskilled EU immigration. The service sector will face some increase in non-tariff barriers.
Criticism: Crude quantification of the impact of uncertainty. Most of the assumptions suggest leaving will little change Britain’s relations with other countries.
Costly in all scenarios: The Treasury
The prediction: The UK is worse off outside the EU in any of the three main outcomes, bringing GDP between 3.4 per cent and 9.5 per cent lower by 2030.
The reasoning: Breaking with the EU will cause trade and FDI to fall. Productivity will grow more slowly, as would the economy as a whole.
You tell us: voters chose to leave the EU. Now what?
A campaigner wearing a Vote Leave t-shirt and holding a British Union Flag, also known as a Union Jack, stands on a Westminster Bridge near the Houses of Parliament in London, U.K., Wednesday, June 15, 2016. The Brexit battle took to London's River Thames as boats supporting the "Leave" and "Remain" campaigns jostled for space, while Irish rock star Bob Geldof harangued U.K. Independence Party leader Nigel Farage using a sound system. Photographer: Luke MacGregor/Bloomberg
What was your initial feeling after you heard the results? What questions do you have now? Share your thoughts with the FT community here.
Criticism: The precise figures are open to doubt and the paper does not take into account the impact of a reduction in migration.
Equivalent to a permanent tax on income: OECD
The prediction: There will be long-term damage of between 2.7 and 7.7 per cent of GDP by 2030, and the organisation’s head has likened the impact over the next four years to “missing out on one month’s income”.
The reasoning: A drop in confidence will hit the economy in the short term. Longer term, reduced trade means lower foreign direct investment, hitting the UK’s productivity growth. Benefits from less regulation will be limited; the UK is already sixth in the World Bank’s list of the easiest places to do business.
Criticism: The comprehensive model may magnify the impact of factors such as uncertainty.
Very costly in all scenarios: Centre for Economic Performance
The prediction: A hit to trade in all likely scenarios will bring GDP 6.3-9.5 per cent lower by 2030 than if the UK had stayed in.
The reasoning: Even if the UK strikes a free-trade agreement with the EU, non-tariff barriers — such as rules of origin regulations — will hamper growth. The worst estimates assume the economy will become less efficient over the long term due to less competition from EU nations.
Criticism: Does not assume any impact due to change in migration or a reduction in regulations.

[Ghengis Jon]

They don't call it Battle Creek for nuthin!

http://www.detroitnews.com/story/news/local/michigan/2016/06/24/fans-guns-ballgame-battle-creek/86327670/

[entropy]

Man... How pissed must India be right now? All they had to do was vote to get England to leave.


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[entropy]

https://www.washingtonpost.com/news/the-switch/wp/2016/06/24/the-british-are-frantically-googling-what-the-eu-is-hours-after-voting-to-leave-it/

You've got to be kidding..


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[Wild Hoss]

https://www.washingtonpost.com/news/...g-to-leave-it/

You've got to be kidding..


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This is why we can't have nice things.

[Dr. Strangelove]

Sinn Fein calls for Irish reunification referendum...though even the PM of Ireland says, "we have bigger things to worry about right now"

http://www.reuters.com/article/us-britain-eu-ireland-idUSKCN0ZA0NX

[hack]

This is why we can't have nice things.

I knew America didn't have a monopoly on stupidity, but I also didn't know it had very serious competition. At least people in poor countries have the excuse that they could not get a proper education.

[entropy]

One of the problems with democracy..

[Dr. Strangelove]

Cornwall votes heavily for Brexit. Then pleads with London to make sure the county gets the same amount of money from London that it was getting in EU subsidies. How much can we bet that other depressed areas of England are saying the same thing?

John Pollard, the leader of Cornwall council said: “Now that we know the UK will be leaving the EU we will be taking urgent steps to ensure that the UK Government protects Cornwall’s position in any negotiations.

“We will be insisting that Cornwall receives investment equal to that provided by the EU programme which has averaged ?60m per year over the last ten years.”

http://www.independent.co.uk/news/uk/home-news/brexit-cornwall-issues-plea-for-funding-protection-after-county-overwhelmingly-votes-in-favour-of-a7101311.html

[Jeff Buchanan]

https://www.washingtonpost.com/news/...g-to-leave-it/

You've got to be kidding.

I am reading that pundits are predicting that the 2 year long exit strategy will involve renegotiating various aspects of any foregone benefits of EU membership, the government will then present a second referendum to voters and say, "this is it, are you sure?"

I don't think there is anyway of predicting outcomes at this early point. Nearly every entity that believed they might be negatively affected by an up vote on BREXIT, were reportedly well prepared for it.

I'm also not convinced that the British voters were as uninformed about the reasons they casted votes the way they did as they are being made out to be.

Thanks, Hack, read the text ...... good info and insight.