Exciting economic growth figures: 2% growth in 2016, 0.6% in the last quarter.

In social media there is a lot of pro-Brexit sentiment over these figures. In other words:

“Our economy is working pretty well, let’s completely change it” – brexiters


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This popped up in my feed. It’s an amazing piece of hyperbolic nonsense from a very angry winner who thinks that the supreme court has “blocked” article 50. If you are ever unsure about how we voted to leave, the simultaneous barrage of anger and oblivious misunderstanding proudly displayed on the below link might give some insight.


Even better, in another post she accuses America of having let the lunatics take over the asylum because they elected Trump. But they say it’s Americans who have no sense of irony…

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These are my principles, and if you don’t like them, I have others

During the labour leadership campaign Owen Smith was derided for being insincere and opportunist while Jeremy Corbyn was praised for his principles. Months later Smith hasn’t budged, whereas Corbyn oscillates back and forwards every time the wind changes and is yet to settle on a clear and well defined brexit position.


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Not so fast, brexiters.

The media analysis of the brexit speech today has been disappointingly superficial. Even on social media, we’re basically just seeing remainers feeling disheartened and leavers naively lapping everything up without a second thought – but that’s just been the whole thing in general. Here’s my take, which is a bit deeper than anything I’ve seen written so far. Of course, I may be wrong to look at it so closely, it may be that Theresa May is simply aiming for a hard brexit. But it would be a bit embarrassing if it took her six months to decide that she’s just going to aim for the unmitigated worst case scenario and not try for anything better, wouldn’t it?

She hasn’t laid it out exactly, but we now know Theresa May’s negotiation strategy:

1. Suggest that we’ll become a tax haven if things don’t go our way
2. Say “Well we can’t be in the single market because it means immigration, the other EU leaders said so, hint hint”
3. Wait

She is now throwing the ball into the EU’s court and hoping they’ll see that she’s serious and soften on freedom of movement. It’s not an accident that the tax haven idle chatter, which has come out of nowhere, was first made in an interview with a German newspaper: it’s a threat levelled at Mrs Merkel.

This implies that Theresa May doesn’t think the tax haven idea is strong enough to be plan A.

She made the explicit assertion that immigration has put a downward pressure on wages. This is probably not true, and is easy to rebut by pointing out that London has the highest amount of immigration in the country, and also has the highest wages.

She also seems confused on globalisation. She is all for it with all her talk of a global Britain, as are most ultra-Tories, but most ordinary people resent globalisation; that’s why they voted for brexit. Becoming a tax haven is temporarily kicking the resentment of globalisation down the road. When we can’t blame immigrants for low wages and insecure employment, we’ll blame the foreign tax dodging multinational corporations. We already do, just not as much as we blame immigrants.

And the correct way to limit the political power of a multinational is to harmonise law and regulations within similar economic areas, like some kind of union of European countries. A European union, if you will.

The corporation tax cuts are also supposed to keep multinationals in the UK. Theresa May is betting that tax cuts will offset the lost competitiveness that will come in the form of increased bureaucracy and tariffs needed to maintain trade with the EU. However, in the UK we have never put much emphasis on making multinationals pay their tax, meaning that they pretty much decide themselves what they’ll pay. Google, for example, is thought to pay 3%. As a proportion of their revenue, any gains a multinational makes due to lower nominal tax rates are likely to be lower than the impact of additional tariffs and bureaucracy. Prepare for productivity to plummet under a plethora of previously purposeless paperwork.

If we go with the tax haven route, our plan is:

1. Leave the EU
2. ????
3. PROFIT!!!

It would be unfair to describe leaving the single market as risky, because the word risk suggests that there is some identifiable benefit to be realised, and no prominent leaver has yet managed to put that into words. Dangerous would be a better word; reckless would be another. However, there’s nobody at home preventing Theresa May from being dangerous or reckless. She has a parliamentary majority and an extremely weak opposition. She could announce a policy of eating babies and she’d still poll around 35%. Monopolies promote incompetence and Theresa May has a monopoly. It is therefore to be hoped that the EU will soften on freedom of movement, but British people don’t react well to being threatened and I suspect Europeans aren’t all that much different.

Prediction: We actually go down the tax haven route and it turns out to be an expensive way of keeping everything much the same, but a bit worse. People who were angry about the EU are still angry and people who weren’t angry about the EU are resentful. Eventually, in about 10-15 years, the majority of under 45 year olds are struggling financially due to being the victim of two consecutive periods of economic mismanagement, and as a voting bloc they become large enough for things to start to swing the other way.

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Reality check

The most interesting thing here is that the government is happy to ally itself with the hard brexiteers, citing the referendum as a mandate to do so, while only 39% of the public want a hard brexit!

When Margaret Thatcher described referenda as tools for dictators, she wasn’t joking.

The hard brexiteers are getting excited today over Trump’s optimistic comments of an easy trade deal with the USA. Unfortunately what they are apparently not aware of is that the USA accounts for less than 10% of our trade, while the EU around 50%. Annoying the EU and running off to the USA is very much a loser’s strategy.

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Clean, hard brexit

If the rumours are correct that Theresa May is preparing to side with the hard brexiteers then we are in the interesting and possibly unprecedented case that both main parties’ leaderships have veered sharply over to their extremes and will not command the loyalty of their party in general. The lunatics have taken over the asylum.

If our political system is not completely broken then a new party will emerge in the centre. However, it is clear that our political system is broken thanks to FPTP, so this will be a test of just how regressive it is.

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The market can stay irrational longer than you can stay solvent

Today we are getting lots of news reports saying the economy is doing very well post brexit with everyone patting themselves on the back for ignoring the experts.

On 24th June I woke in an alternate universe. I now learn that not only is it an alternate universe, it is one where time is not linear.

The worst case scenario for brexiteers is that we’re currently seeing a rapid uplifting effect due to the rapid currency devaluation, which will plateau in the coming months. This would mean that the gains of brexit will be realised before it occurs, leaving the losses visible during and afterwards. That’s an undesirable political position to be in command of.

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