Friday, 16 September 2016

I expected a "despite Brexit fears" bonanza but was disappointed

From the BBC:

Bank admits economy is looking better

In one sentence the Bank has revealed it is ready to upgrade its growth forecasts for the UK economy.

"The Committee now expects less of a slowing in UK GDP growth in the second half of 2016," it said, referring to the Monetary Policy Committee of Bank economists and external experts that sets UK interest rates.

The key point - the Bank's internal judgement is that growth in Q3 (that's July to September) will now be between 0.2% and 0.3%, a pretty chunky upgrade on its August forecast of 0.1%.


A most interesting headline from the BBC. Even they appear to realise that Project Fear was overcooked and are trying to distance themselves from it.

22 comments:

Bayard said...

"A most interesting headline from the BBC. Even they appear to realise that Project Fear was overcooked and are trying to distance themselves from it."

I expect they've been given permission to do so as the government itself is trying to move away from PF and blame it all on the politically departed Cameron and Osborne.

I came across a good neologism today: Brexcuse - blaming something that has gone wrong on the Brexit vote.

DBC Reed said...

Of course blaming all our woes on foreign workers from the Euro Free Trade Zone wasn't Project Fear, even when backed with threats and street violence.

Bayard said...

DBCR, well, no it wasn't, because they were already here. "Project Fear" was threats about the future.

Anyway, didn't your mother tell you that two wrongs don't make a right?

DBC Reed said...

@B They were already here but nobody saw them as an issue because there was a quid pro quo giving us access to as much free trade as we could deal with.Once they were declared an enemy to British unskilled workers, thy became an extant threat and an implied remedy (of deportation)was provided.People on here approved of that in response to direct questions
As regards two wrongs: what wrong are Euro workers doing over here, that they can be abused, threatened and in one case killed?
Some consideration must be given to our reputation in any Brexit negotiations: nobody in Europe is going to make it easy for street yobbos stirred up by UKIP yobbos.

Mark Wadsworth said...

B, i'd say the current govt is refreshingly free of blaming anybody, they are just muddling along as best they can and resisting the temptation to be as spiteful about Juncker, Tusk etc as they are about us.

DBC: "an implied remedy (of deportation)was provided.People on here approved of that in response to direct questions"

I should remind you that telling outright lies and attacking other bloggers/commenters is a clear breach of the guidelines on civilised discussion and comments of this ilk will be deleted in future.

Not only that, it is totally off topic and does not help explain the BBC's sudden change in tone.

Of course a lot of the stuff the Leavers came out with was lies and nonsense, as B says, two wrongs do not make a right and further, it is possible to do the right thing for the wrong reasons or vice versa.

If I could persuade people they should vote for LVT/CI on the basis that it will reduce the chances of them getting cancer, I'd happily do so.

Lola said...

DBCR The EU is not a 'Euro free trade zone' at all. At the very best it is a customs union hiding behind common tariffs. But what it actually is, is a bureaucrats rule making wet dream that panders to vested interests. It is all about excluding competition and making bureaucrats rich.

Mark Wadsworth said...

L, that's a philospohical point, and you may well be correct.

Let's assume within geographic area A, there are no bars to sale of goods and services across borders, like within the UK, for example. But within that area there are all sorts of restrictions on who may produce and sell what i.e. barriers to entry, unduly high standards, unnecessary regulations* etc, then that is inherently not "free trade" is it?

* There are plenty of sensible restrictions as well of course, like banning leaded petrol, lead paint on toys for kids, CFCs, blue asbestos etc, speed limits and health and safety up to a point etc. I'm not talking about those.

So regardless of how large or small the area without explicit trade barriers between regions is, be that the UK, the whole of Europe, the whole of the world, it is not free trade.

There was a great article somewhere saying although that HK is splendidly free trade from an international point of view, within the zone it is completely rigged by ruling rent seekers. There is no competition between supermarkets or landowners because they are all cartels.

George Carty said...

The main reason why the predicted dire consequences of Brexit haven't happened is because we haven't invoked Article 50 yet! I suspect the business community is still hoping that Britain will come to its senses.

As I see it hard (ie non-EFTA) Brexit would be economically suicidal for the UK, as leaving the single market would clobber our trade surplus in services (due to all the non-tariff barriers that would come into force, along with the City of London's loss of passporting rights), while giving us very little ability to combat our frightening trade deficit in goods (as we'd still be bound by the WTO's rules).

And the EFTA option may well not be possible, due to a near-certain veto by one or more existing EFTA members, who wouldn't want a new member joining with more than four times the combined population of all current EFTA members.

I'm a bit puzzled why Mark is still pro-Brexit -- has he not noticed that two of the most rabidly pro-Brexit newspapers (the Daily Mail and the Express of course) are also infamous for pushing Home-Owner-Ism? Or is his hope that economic collapse resulting from Brexit actually going ahead will both discredit these newspapers and radicalize enough people to the point that they can be mobilized to destroy Home-Owner-Ism once and for all?

Mark Wadsworth said...

GC, you make some good points.

On EFTA, you might be right. On the other hand, at the moment, EFTA countries can be bulled around by the EU because of the relative size, politely referred to as "single market access fee" but more accurately described as "ransom payment". If EFTA were of similar size to the EU, then EFTA countries in turn would be able to demand higher "market access fees" from the EU and would have to pay lower ones. With a bit of luck, common sense would prevail and these would be cancelled on both sides. Worst case, things will still be a bit better than now.

Passporting - I can see why UK banks want these, but given their track record in f---ing things up for everybody and ongoing rampant fraud and rent seeking, from the point of view of Europeans, I can see why they might not be welcome.

Daily Mailexpressgraph - they are rampant Homeys, for sure, and many of their reasons for supporting Brexit was the old nationalist racist shite. But as mentioned, people can be right for the wrong reasons. But I see no reason to assume there will be economic collapse (Iceland, Norway,Switzerland etc) and do not wish it to happen. Je ne Bregrette rein!

And we will never destroy Home-Owner-Ism because everybody dreams of getting something for nothing, there is a pendulum between Georgism (everybody benefits a bit) and Home-Owner-Ism (a small number benefit at everybody else's expense) it is a question of pushing it as far towards Georgism as possible - even if that's only the Georgism lite that we had in the UK for most of the 20th century.

Mark Wadsworth said...

"rien" obviously. Bloody spell check.

If you want to know what I mean by Georgism-lite, see second half of this post.

Bayard said...

"They were already here but nobody saw them as an issue"

Oh come on, I'm not a Daily Mail reader. You're not seriously trying to pretend that all those unpleasant racist types who have been beating up Poles and chanting hate slogans at other immigrants were somehow all created by the leave campaign in the referendum, are you? It's bleedin' obvious that they have been here all along (especially to someone who majors in the nastiness of pre-war Mosleyite fascism) and, if the Leave campaign's anti-immigrant crap lured a few of them out from whatever shithole they were living in, it did a lot less embolding of this scum than the Remain campaign's "Leave voter = xenophobic racist" lie that convinced them they were in the majority.

"I'm a bit puzzled why Mark is still pro-Brexit"

I'm not. I expect, like me, he knows that ideas are not responsible for the people that believe in them.

Mark Wadsworth said...

B: "I'm a bit puzzled why Mark is still pro-Brexit"

I'm not. I expect, like me, he knows that ideas are not responsible for the people that believe in them..


Ta and exactly. To be quite honest, the UK might end up a tad worse off overall, but it will teach the EUrocrats a lesson and they will be a bit nicer to the smaller/weaker EU countries in future, so overall we have done the citizens of Europe a favour.

And if the UK ends up better off, that will also force the EUrocrats to be nicer to the smaller/weaker countries to keep them onside, so win-win.

Lola said...

MW / B.Possibly. The issue with the EU is the EU. 'Europe' is fine. I am fine with Europe, but I am and remain an unrepentant outer. Why?

The EU itself is designed to have limited if any real democratic accountability. It's a 'technocratic' system in that it assumes that there is a caste of bureaucrats naturally gifted and trained to have superior wisdom than everyone else. A 'super-quango' if you like. In my view it is entirely unacceptable that bunch of bureaucrats with Hayekian Pretence of Knowledge and with no real democratic, legal or financial accountability and no skin in the game can have arbitrary power and control over supposedly free citizens.

This system has, over 40 + years been exported to the UK where we now have a similar bureaucratic state. Just look at the serial failures of the financial regulatory bureaucrats and the detached arrogance of the Bank of England.

So getting out is a first step in undoing all this crap. We can begin to unstitch all the Roman Code additions to our Common Law tradition.

But I agree there may be an economic price. It's too early to nay say that. IMHO however, liberty and responsibility, the rule of law and strong property rights have always and continue to lead to, more wealth creation than the other thing.

This also applies to progressing (!) towards a more Georgist settlement in respect of tax. The EU will never, but never, countenance it. If for no other reason than it would massively upset international banking (on which they are so dependent).

I do not think that Brexit will help smaller EU nations at all. Quite the reverse I fully expect to see a massive increase in the centralisation of power to the EU centre at the expense of the independence of smaller sovereign nations. Realistically the EU bureaucrats can do nothing else if they want to retain their power and entitlements. Once such a bureaucracy admits that it needs to hand power back, the people to whom it is handing power back will want all of it. That would de facto doom the EU.

In any event, as far as I can find out, their is no society in history, ever, that has endured such a quantity of arbitrary bureaucratic interventions and bad money (and they ALWAYS go together) and survived. Not one.

Lastly I found an analysis of the UK's contingent liabilities to the EU banking system as arranged via all the various banking rules and compacts. £92Bn was the number. But what this is is actually a back door mechanism for bailing out the Euro. And in my experience such estimates are out by a factor of three.

So whatever the near term cost, financially, democratically, and legally out is right.

Lola said...

MW / B Janet Daley puts it more eruditely than me..
http://www.telegraph.co.uk/news/2016/09/17/the-eu-still-hasnt-understood-that-it-is-a-totalitarian-institut/

George Carty said...

Mark, given that the enlarged EFTA would be 79 million people while the EU27 is 444 million, the balance of power still seems firmly in the EU's favour.

If all the other non-€ EU members followed suit (which I seem to recall is your hope) then it would be 183 million versus 340 million, which may be more favourable. Good luck with that though, as most of the more populous non-€ EU members in mainland Europe are in the East, and will be very angry with the anti-immigrant sentiment in England, that was exposed by the referendum campaign.

Brexit makes no sense for Britain if you assume that the EU27 will remain intact – for one thing it would go against the centuries-old British dictum of not allowing the Continent to unite against us. Of course most Brexiteers believe that Brexit will cause the EU to unravel (or that the EU is doomed to collapse irrespective of what the UK does).

And aren't the current EFTA states mostly successful for reasons which cannot be duplicated in Britain? Switzerland and Liechtenstein are tax havens, and while Greater London could conceivably be a tax haven (its population is comparable to Switzerland's) the UK is a whole is far too populous for that.

Norway and Iceland have fabulous energy resources: the former had as much North Sea Oil as the UK for less than 10% of the UK's population, as well as enough hydroelectric resources to provide almost all of its needs for electrical power (as well as a great opportunity to profit by backing up the unreliable output of Denmark's wind turbines). And Iceland has excellent geothermal energy capability -- don't they use a lot of this to cheaply convert bauxite to aluminium? And Switzerland too has a reasonable amount of hydroelectric power!

George Carty said...

Bayard, didn't the official Vote Leave campaign start off by rejecting the immigrant-bashing of Farage and Leave.eu (because their goal was EFTA rather than hard Brexit) only to change course because they came to the conclusion that immigrant-bashing was the way to win the vote?

Incidentally, what would be the best way to gauge how much racism contributed to the Leave vote? When I suggested to a Remainer on FB that perhaps he'd overestimated the racism of Leavers, he said "haven't you seen how much racism there is on Get Britain Out or any of the other pro-Brexit FB groups?", I pointed to an ICM poll for British Futures which suggests that three-quarters of Leave voters are happy for existing EU migrants to stay in the UK. It is obvious that many racists who wanted EU migrants deported may not be willing to divulge that fact to pollsters, but it is also obvious that FB groups such as Get Britain Out are probably not representative of the median Leave voter. Is there an objective way to determine the truth?

Lola, if the EU is an inherently Home-Owner-Ist institution (as you suggest with your "The EU will never, but never, countenance it. If for no other reason than it would massively upset international banking (on which they are so dependent)", then why do they tolerate Georgism-lite in Germany?

Bayard said...

GC, I think you have to make the distinction between the campaigns and the voters. Yes, the Leave campaign was anti-immigrant, probably for the reasons you suggest. However the actual campaigners form a tiny minority of the voters and they were more appealing to the racists for their support than much claiming that they were speaking on their behalf. It was the Remain campaign that put forward the claim that the Leave campaign was speaking on the voters' behalf. So when the racists found that one side's activists were agreeing with them and the other side's activists were saying that not only were they (the Leave campaigners) agreeing with them, but that they were speaking for half the country as well, then their perception of their popular support is likely to change.

How much racism contributed to the Leave vote is an interesting subject, but not, really the question at issue here. AFAICS, despite the claims of many Remainers, it has no effect on the validity of the referendum, because the referendum set out to find out what the country wanted to do, not why they wanted to do it. The "will of the people" is the what the people want to do, regardless of their motives for wanting to do it. Doing what the people want to do only if they are wanting to do it for the right reasons is not democracy, it's dictatorship in one form or another. The slightly O/T question at issue is the one that DBCR brought up is how much the racism of the Leave campaign contributed to the rise in racist incidents.

DBC Reed said...

The posting that brought out the worst in a lot of people was that dealing with the murder/ assassination of Jo Cox which was written by The Stigler on Friday 17th June, a week before the Referendum.
I would defend my comments in those exchanges against accusations of outright lies and would suggest that any fair-minded person would struggle to accord the tortured defence of anti-immigrant feeling in much of that debate with the exalted title of "civilised discussion". Just re-read it.
The Stigler begins" Reading people then blaming it"-the murder- " on the culture that's been around though, well that had me in a fit of rage".And to his credit, the argument on the Stigler's side, is summarised by this remark.
I sought to refute that with an argument that violent prejudice was in "the culture that's been around" and had been worked up by elements in the Leave campaign.
Mark replied to me "People refuse to understand the more subtle points, so the leavers go for the lowest common denominator, fair enough say I".

Mark Wadsworth said...

GC, more fair points re Switzerland and Norway, they have their advantages, but the UK has plenty of others. Unlike Switzerland it has a coastline, the weather is nicer than Norway and we have as much oil as they do, we have much larger populations than either etc. I remain optimistic.

Lola said...

GC. The EU is not home-owner-ist at all. It is crony corporatist. Banker-ist. Bad-money-ist. Bureaucratic Technocratist.

I would guess that the reason that it is very easy to justify VAT (to the uninformed) and very easy to scrape a little bit off the top for the EU bureaucracy to enjoy. OTH if Europe is LVT'd then the EU would find it bloody difficult to collect tax and especially to increase it.

OTH(2) LVT'ing the EU zone might actually help the EU centralise more and introduce stuff like an EU armed forces.

Whatever. LVT has a microscopial chance of becoming EU policy.

Bayard said...

"I sought to refute that with an argument that violent prejudice was in "the culture that's been around" and had been worked up by elements in the Leave campaign."

To which I would have contributed, if I had realised it at the time, my argument that the Remain campaign also did a lot of emboldening by exaggerating the number of racists around.

Bayard said...
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