Brexit Doomsayers Could Not Have Been More Wrong, So Why Believe Them Now?

Authored by Daniel Lacalle via DLacalle.com,

If there is anything that we have learned from the development of the British economy since the Brexit referendum is that doomsayers were wrong.

Since the Brexit vote, the UK has created 450 thousand jobs.

Unemployment stands at a 4% rate, the lowest since 1975. Labor Participation Rate is at 75%. This compares to an EU unemployment of 8.7% and 58% labor participation rate in the 28 member states.

Productivity is growing at the fastest rate in 6 years, while UK factory orders at 4-year high.

At the same time, wage growth has accelerated to two-year highs.

Inflation is above expectations, but that has nothing to do with Brexit and all to do with the Bank of England’s extremely loose monetary policy.

Additionally, GDP growth is expected to range between at 1.5% and 1.9% for 2018 and 2019, very far away from the expectations of plunging straight into recession just from a Brexit vote.

Remember this before you say “Brexit hasn’t happened yet”. Doomsayers expected the UK to collapse into recession and a net destruction of jobs simply from a “Yes” vote.

Should the UK economy grow below 2%? No. But the expected figures fail to show the economy has been growing well above the EU and the G7 economies for seventeen years.  The UK annual GDP growth has almost doubled the European Union one for years.

So, the economy is doing well despite the undoubted challenges brought by Brexit and the doomsayers have been atrociously wrong.

Suddenly, a political crisis erupts. Boris Johnson, David Davis, and Steve Baker have resigned after Theresa May imposed a “my way or the highway” solution. May’s plan was clearly the “softest possible Brexit” including the UK maintaining EU’s customs border and collecting EU tariffs for the bloc, while May would accept restrictions on access to the single market for services, according to CNBC.

In a nutshell, May’s Brexit is the worst solution for Leavers and Remainers. It tries to please Remainers, who are obviously not satisfied as they want a full reversal of the EU exit.

In essence, the plan is the worst of both worlds. Leaves the UK with all the perceived negatives that led to a “Yes” vote in the referendum and none of the alleged benefits of staying in the European Union.

Furthermore, the proposal does not shield the UK from the risks that are rising in Italy and the immigration crisis. In fact, it leaves many loopholes that effectively mean that the entire agreement is subject to interpretation. Lack of clarity is dangerous in any agreement, but being deliberately vague is simply devastating when the time is passing and the deadline is obvious.

May’s way is not the only way. The UK should deliver a strong Brexit proposal that creates certainty, that eliminates the excessive costs and regulations. There is a reason why the EU has a “Canadian” or “Norwegian” solution because they were created ad-hoc for those countries. May fails to recognize the strengths of the UK to achieve a specific “British solution” that is good for both parties. She seems to accept at face value that the EU rules, those that the EU itself bends at will, are untouchable.

This political crisis adds uncertainty to business, gross capital formation, and job creation, but also diminishes the UK government’s influence on crucial international matters. Instead of delivering a message of strength, May has delivered a message of uncertainty.

I would have preferred the UK to stay in the EU and be a driving force for change and renovation, for freedom. But Brexit happened. And now the government is putting the economy at risk by creating an unnecessary political crisis that may affect many important sectors, while ignoring the results of the vote.

Brexit should have been a serious warning to the increasingly interventionist European Union to change its ways and should have been negotiated swiftly from the position of strength that the UK had as the second largest net contributor to the EU.

It should have been a fantastic opportunity for both the EU and the UK to thrive. Instead, May has done the job for Brussels showing the European Union is an unchangeable entity, like the Hotel California where “you can check out anytime you like, but you can never leave”.

May’s “my way or the highway” plan has strengthened the EU’s stubborn resistance to change.

Comments

brushhog BennyBoy Wed, 07/11/2018 - 08:25 Permalink

They're never going to give you BREXIT. Never were. The vote was rigged and it was supposed to be for remain but such an overwhelming majority of British turned out, in spite of 24/7 propaganda, that it swung the vote for BREXIT. Now they dont know what to do. They certainly will never allow a BREXIT so get that out of your head. Maybe "redefine" what "BREXIT" means and give you some bullshit token version. OR they may just simply deny you your vote and tell you it's too bad. What are you gonna do about it? Nothing. You're all disarmed. You think if you had a strong, armed population of 'take no shit' brits that they would dare slap you around like this? You should all hang your heads in shame.

In reply to by BennyBoy

Endgame Napoleon beemasters Wed, 07/11/2018 - 08:31 Permalink

Good for Brexit, especially if wages are going up for British citizens. There might be some complications, however.

Listening to PM’s Question Time on C-SPAN a few months ago, after another politician boasted about employment numbers, I heard one politician admit that a huge percentage of the British live on welfare and the equivalent of the refundable child tax credit, which, in the USA, is set at $6,431 for maximum womb productivity.

The refundable child tax credit for prolific womb producers is roughly equivalent to 3 to 4 months of full-time wages for millions of non-welfare-eligible US citizens, living in multiple states where per-capita income is $20k or below.

The refundable child tax credit is not a standalone freebie, albeit the parents can spend the tax credit on whatever they want, whereas other welfare has restrictions.

It goes to citizens and noncitizens, living in single-earner households with US-born kids, and many of them additionally qualify for free rent, free groceries, free electricity, free monthly cash assistance and subsidized daycare so that the moms can work part time, which keeps them under the income limits for welfare programs.

This system of socialism-for-some provides employers with a labor market that needs to maintain a low flow of earned income to stay eligible for the 100%-free, non-contributory welfare programs, thereby undercutting all of the citizens competing for those jobs who are not paid by government for sex & reproduction. As one employee put it: “The women we have working here have somethin’ comin’ in.”

Another way that moms in their “voted best for moms” jobs get this unearned income from big government is by working a few months per year in higher paying, seasonal jobs, like tax preparation. They forfeit the monthly welfare during those months, going back on it for the other months, in addition to getting their up to $6,431 pay booster from the refundable child tax credit.

Meanwhile, non-womb-productive, single citizens and single parents with kids over 18 face rent that soaks up more than half of their full-time, earned-only income. They get zero point zero zero in monthly welfare and near zero in wage hoisters from the progressive tax code.

In the USA, legal / illegal immigrants likewise use this pay-per-birth system to enhance their income, qualifying for the monthly welfare and refundable child tax credits in households with sole, male breadwinners.

In multi-family households, there are often several womb-productive females, contributing layers of welfare to the household till. They bring in proof that they have instant-citizen US-born kids and the paycheck stubs of their children’s fathers, strategically keeping the household’s [traceable] income under the income limits for the programs.

If wages are rising [significantly]—in conjunction with full-time, nonseasonal work hours that prevent womb-productive citizens & noncitizens from meeting the income limits for the pay-per-birth programs—then Brexit is TRULY working.

The fact that the labor participation rate is high suggests that Brexit is more significant than Amexit, but then, our Congress prioritized raising non-refundable child tax credits, not the value of hard work. 

 

In reply to by beemasters

waspwench Endgame Napoleon Wed, 07/11/2018 - 16:27 Permalink

It would cost a great deal less if we did not give it to foreigners.   The people who are (ab)using this system to their advantage are the muslims who are invading in huge numbers and who have numerous wives, each with several children.   In a sane world anyone who had never paid taxes for a number of years, or was not second generation British, would not be eligible for government assistance.

In reply to by Endgame Napoleon

UndroppedClanger Wed, 07/11/2018 - 05:13 Permalink

Why is anybody surprised that May is the helmsman of a shambolic, ineffectual Brexit?  She was one of the three leaders of the Remain campaign.  It seems to me very likely that this has been her Prime Ministerial remit from day one: be weak, win no arguments, water down the UK's position incrementally until the Brexit that is agreed upon is a leaving in name only.  Later, when the UK is taking it on the chin due to its hamstrung position, the EU can point to the UK and say, 'Look how poorly they're doing; if the UK can't make it on their own then you certainly can't, you little tier-two country, you.'

666D Chess Wed, 07/11/2018 - 05:14 Permalink

Brexit will never happen, the UK's main source of income comes from the financial sector and out of the EU that's gone. The pound would collapse if the UK left Europe. Brexit was used as a escape valve to keep people calm just as Trump is another escape valve but in the end, the rich will get much richer and the poor much poorer. Remember, it's a big club and you ain't in it!!!

666D Chess EddieLomax Wed, 07/11/2018 - 05:39 Permalink

It's what it is. The UK depends on the financial sector to survive. No Europe, no financial sector. It's that simple. Hence brexit will never happen. Since the day of the vote, I said, I believe it the day the UK is actually out of the EU. So far, I've been right and I will end up been right. You don't have to be Einstein to figure this out, it's fucking easy to predict. Get ready to start using the euro a few years down the line. Don't get me wrong, not that I'm expressing my wishes, I'm just telling what I think will happen. 

In reply to by EddieLomax

hound dog vigilante 666D Chess Wed, 07/11/2018 - 12:09 Permalink

 

London will ALWAYS be a global financial center... if not THE global financial center - EU or not.  London/UK's status/leadership in banking & finance is NOT dependent on europe - London was London before the EU & London will be London after the EU.

Factually, the EU doesn't really have an equivalent to London/New York/Zurich.  The EU needs London/UK as much (if not more) than than London/UK needs the EU... the past two years have proven this fact in spades. You, Mr. Chess, are blind.

In reply to by 666D Chess

Goodsport 1945 Wed, 07/11/2018 - 05:30 Permalink

It goes to show how thoroughly the globalists have infiltrated the various governing bodies of the world.  Just as we must rid our congress of those whose objectives or policies are not our best interests, the British people must do the same in Parliament. 

The problem is, if you repeat a lie often enough, people will believe it.  That is why the takeover of the media has been so important to the globalists. 

As economies around the world continue to crack, the globalists will become more desperate, so it is essential that vehicles like ZH continue to ferret out the real news and educate people everywhere on what has and is actually happening.

FreedomWriter Goodsport 1945 Wed, 07/11/2018 - 06:53 Permalink

As more countries break out of the life-sucking economic matrix proposed by globalists, more will follow. Globalism will soon join the long list of failed economic planning schemes that have so fucked-over once wealthy and thriving economies.

Just trust the plan. Trust people to recognize what is in their best interests. No one really wants to live in a world where their only choice of destiny is either as a welfare recipient/bureaucratic parasite or a wage/tax slave. Globalist policies leave them with no other options. 

In reply to by Goodsport 1945

Nunyadambizness FreedomWriter Wed, 07/11/2018 - 07:35 Permalink

You're not wrong, but I would say that there are millions of "sheeple" out there that don't pay attention.  They only hear what they want to hear and/or they simply do not listen when someone comes along and points out that something isn't right in what they've been hearing.  Simple "man on the street" type interviews show the vast lack of knowledge or understanding of a large swath of our population, and it is those that will follow without question until they encounter pain--physical or financial, that will break them out of their sleepwalk--and that will take some time. 

In reply to by FreedomWriter

Dr. Bonzo Wed, 07/11/2018 - 05:36 Permalink

It wasn't about the reality of the vote. It was about scaring the population into continued support for the EU kleptocracy. Why is this hard to grasp?

Jack4952 Wed, 07/11/2018 - 06:28 Permalink

The issue is SOVEREIGNTY: the power of the British PEOPLE to determine their own destiny based on what they believe is best for them. Right or wrong, BREXIT won the majority vote in Britain. Any British politician who does NOT implement a COMPLETE BREAK with the EU is a TRAITOR to the British people.

MPs exist to carry out the will of the people; NOT to force something down the throats of the people to which the British people are opposed.