Brexit

Brexit Continues to Reverberate Around the Globe

Things are looking up.

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It has been close to two weeks since the British people voted to leave the European Union, and the consequences of Brexit continue to reverberate in Europe and beyond. The libertarian camp, like Britain, was split between those, like myself, who favored Brexit, and those who opposed it. Many of my thoughtful friends and colleagues who wished for Britain to remain in the E.U. have pointed out that an independent Britain does not necessarily mean a free Britain. Very true. Should the British electorate choose the Corbynistas, a far-left wing of the Labour Party determined to re-nationalize the commanding heights of the economy, the cause of human freedom would suffer a serious blow. But my argument in favor of Brexit did not focus on the future of Britain, although there is ground for optimism there. It focused on the future of Europe, and my conviction that Brexit was necessary if European elites were to recognize the seriousness of Europe's political and social problems. With that background in mind, how are things shaping up?

First, let's look at Britain. The Labour Party is in utter disarray. Its leader, Jeremy Corbyn, is a leftist throwback to the 1970s. He used to oppose the E.U. before changing his mind, only to be blamed for having his Damascene conversion too late to prevent the outcome of the referendum. Corbyn is likely to face a leadership challenge from a more centrist candidate. He has refused to go and is relying on the grassroots, which are to the left of the Labour Party leadership, to stay in power. May that stand-off long continue. The Conservative Party leadership contest triggered by the resignation of the sitting prime minister, David Cameron, has seen some extraordinary reversals and machinations that make House of Cards look tame in comparison. That said, all remaining candidates to succeed Cameron have committed to accept the outcome of the referendum and withdraw from the E.U. by invoking Article 50 of the Lisbon Treaty. They also agreed not to call for a new election before 2020. That means that the separation agreement between the E.U. and Great Britain will be negotiated by the Tories over the next two years. The Tories will also be responsible for setting up the policy framework for an independent Britain. 

What might that policy framework look like? 

To start with, everyone is keeping an eye on the markets, which rose rather than collapsed. In fact, the London stock exchange ended last week higher than at any point over the last 13 months. The pound has dropped by 8 percent, which is bad news for the British travelers but great news for British exporters, who have been revising their future earnings predictions upwards. Far from shunning Britain, countries throughout the world have been lining up to conclude bilateral trade deals with the world's fifth largest economy. The United States has walked back Barack Obama's counterproductive threat to put Great Britain in the "back of the queue." Eleven countries, including Iceland, India, New Zealand, Australia, Ghana, Canada, Mexico, Switzerland, and South Korea, are already knocking on Britain's door. Such is the interest in trade deals with Britain that London worries about not having enough trade negotiators. That problem too shall be overcome, as New Zealand and Australia have offered to lend Britain their own trade negotiators.

To make matters even more promising, George Osborne, the Chancellor of the Exchequer, has announced that he is considering cutting Britain's corporate tax from 20 percent to 15 percent. That would make British corporate tax rate the second lowest in OECD countries and close to Ireland's 12.5 percent rate. A consensus seems to be emerging that Britain will be, at least initially, a low-tax and free-trade haven on the E.U.'s doorstep, a nightmare for Eurocrats if there ever were one. 

And that brings us back to the European Union. Judging by the responses of different players on the continent, a fascinating split has already emerged between the E.U. bureaucracy on the one hand and national governments on the other. The former, best exemplified by Jean Claude Juncker, the president of the E.U. Commission, have reacted to the result of the British referendum with predictable hauteur and veiled threats. The national governments want none of that. In a true realpolitik fashion, they have to look out after their own interests. And so the Poles, who rely on Britain and America to keep Russia at bay, have called for a mutually beneficial separation agreement between the E.U. and Great Britain. They also called on Juncker to resign. It was Juncker's intransigence, they believe, which prevented Cameron from getting concessions from Brussels that would have helped him win the British referendum. The Poles have been joined by the Czechs and, what surely augurs poorly for the president of the E.U. Commission, the Germans

As was predicted by the proponents of Brexit, the last thing Germany wants is an acrimonious divorce with Britain, which soaks up much of Germany's manufacturing production. Even the French are sounding reasonable, with the French finance minister saying that "freedom of movement may no longer be prerequisite for [British] access to [the European] single market." 

Finally, the Germans appear to be coming around to a belated realization that Europe's problems cannot be solved by "more Europe." The europhiles, like Juncker and the E.U. Parliament President Martin Schultz, are becoming increasingly isolated in their drive for increased centralization of power in Brussels. Against them stands a majority of the European heads of state, who are beginning to realize that reform of the E.U. institutions must be on the menu. Should Brussels lose some of its power and should some of the E.U. competences be repatriated back to the nation-states, then Brexit will have served its purpose.

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  1. Eleven countries, including Iceland, India, New Zealand, Australia, Ghana, Canada, Mexico, Switzerland and South Korea, are already knocking on Britain’s door. Such is the interest in trade deals with Britain that London worries about not having enough trade negotiators. That problem too shall be overcome, as New Zealand and Australia have offered to lend Britain their own trade negotiators.

    Autonegotiato.

    1. Waiting for the first robo-signing dispute to happen.

  2. The libertarian camp, like Britain, was split between those, like myself, who favored Brexit, and those who opposed it.

    THOSE IN THE REMAIN CAMP ARE NOT LIBERTARIANS THEY ARE ONE-WORLDERS. DO NOT BE FOOLED.

  3. Brexiters are all racists. Everybody knows that.

    1. I’ve pretty much accepted that everyone will be called ‘racists’ these days.

      1. I see it as a badge of honor. Disagreeing with the left on anything at all means you are a racist, which means you are right about whatever that issue is.

        So yeah, I am the most racisty racist ever.

        1. Well, except for Irish. I forgot about him.

      2. If there’s any good news these days, it’s that the power of the vermin in the JournoList to intimidate with the “racist” label is getting smaller all the time. It’s becoming the political equivalent of crying wolf.

        1. Don’t worry, “male-chauvenist”, “xenophobe”, and “anti-otherkin” is waiting in the wings for when “racist” has finally lost all meaning to the masses.

        2. There’s two kinds of racism. There’s the mild kind where one just disassociates from others of an unfavored race as much as possible. Then there’s the awful kind where one tries to harm someone of an unfavored race as much as possible.

          In regards to the former kind, there are lots of worse things. For example, socialism.

          In fact, socialism inevitably justifies the latter kind of racism – and it is in a socialist’s best interests to blur the lines between racial disassociation and racial hatred. Any socialist simply must level charges of racism in order to display his socialist bona fides.

          1. Racism does not have to have negative effects. If you treat someone differently (whether good or bad) because of their race, that’s racism. If you even *expect* someone to believe or behave in some way because of their race, that’s racism. If you alter your own behavior or thinking about someone because of their race, that’s racism. This is human nature. We are all racist.

            Racism can have a benefit or a cost to someone. However, most people hold a narrower view that if racism costs or burdens *them* (or some favored group) in some way, it’s racist. If an action benefits *them*, it is not racist. This narrower definition of racism ends up depending on pure naked self-interest.

  4. Looks like the U.S is in the back of the queue for a trade deal with the U.K.

  5. The Poles have been joined by the Czechs and, what surely augurs poorly for the president of the E.U. Commission, the Germans.

    You know who else joined the Germans, Czechs and Poles?

    1. Myron Florin?

    2. Josef Heiter?

    3. Dr. Mengele with his experiments on twins?

    4. Crazy Glue?

    5. Johnny Fuckerfaster!

  6. Wait, something’s wrong here- a substantive article about real issues and a delightful narrative collapse. Aren’t we supposed to fill our day with trans toilet outrage?

  7. The Knights Templar?

    1. Wrong thread,oh well

      1. Are we playing jeopardy?

  8. I’m still enjoying the delicious silence from the “STOCK MARKET IS FINISHED! BRITAIN, YOU’VE DOOMED US ALL!” people as the market returns to exactly where it was 2 weeks ago.

    1. meh, the EU is on the road to ruin but that ain’t Britain’s fault

      1. Yep. They were just the first rat off of the ship.

    2. Read the Economist. They haven’t stopped.

      1. I stopped reading The Economist about ten years ago. They should rename themselves The Keynesian.

        1. I always like to ask them when they plan on halting economic stimulus since that’s a key point of Keynesian theory that never seems to actually happen. I’ve stopped blaming the economic philosophy since they don’t even follow it.

          Not that I think Keyes was necessarily right or wrong (probably wrong, given the results), but it’s a moot point when they never scale back. I don’t know what economic philosophy they’re using as guidelines, but it’s nothing I can recognize from college economics classes.

          1. Good point — “timely, temporary, and targeted” I think were the key words.

            I too stopped reading the Economist because of their inconsistency. I had developed a pretty good bias adjustment with them, but somewhere along the line they stopped being pro-market and started bowing to the government side of things.

            They also started whining about gun control, and it struck me as odd for several reasons — none of their damned business from a country-of-origin point of view; none of their business from a pro-business economics magazine (scooz me, newspaper) point of view, and it had such a religious conversion air to it that it made no more sense than if they had come out in favor of floral hats.

          2. Not that I think Keyes was necessarily right or wrong (probably wrong, given the results)

            Keynes was in that third category, “not even wrong”.

          3. Yes. I think Keynes would be disgusted by most “Keynsians” today.

    3. At this point it’s all being run by a ginormous computer program, much like the world of TRON.

  9. Ghana

    We’re saved!

  10. I heard a podcast that used switzerland and hong kong as examples. When you are small and isolated from free trade partners locally, you have to be open to the rest of the world.

    If the EU refuses trade deals eith the UK, the rest of the world will make up the difference.

    1. If I’m the UK I go talk to Italy. Of the three largest economies on the continent, Italy is and always was the least hostile towards the UK.

      I’ve been reading Italy and Russia have been working on enhancing trade. I don’t know the mechanics of how this may or may not interfere with EU rules but it’s what I’ve been reading.

      1. So why not the UK? Italians love Anglo-American stuff.

      2. Huh, I had no idea Mussolini was pro-Britain ^_-

        Just kidding, I know what you meant!

        1. Even then, I don’t recall Mussolini being anti-Anglo like De Gaulle or Germans were.

          The population as a whole have no beef with the UK.

      3. I don’t know the mechanics of how this may or may not interfere with EU rules but it’s what I’ve been reading.

        The EU is a cartel: if you’re a member, your ability to negotiate trade deals is severely hampered. And a lot of EU trade deals have stalled because big European companies, labor unions, and farmers (mostly in France and Germany) are trying to restrict and manipulate trade for their own benefit, while f*cking over the rest of the population of the EU.

    2. That’s the main idea, I think. Remainers keep pointing out that the UK has been doing more trade with the continent since joining the EU, without realizing that this doesn’t mean the UK is indebted to the EU. It could mean that the EU has made the UK do less trade with the rest of the world. And the emerging markets are all outside the EU.

      1. The main thing the EU gave the UK is a massive trade imbalance, while taking large amounts of UK membership dues for the privilege.

        The EU should worry about being “sent to the back of the queue” by the UK, because the EU has a lot to lose here.

  11. This is exactly why the Left is so freaked out by Brexit: not the fear that something bad would happen, but the fear that nothing would happen and the world would keep turning without the divine assistance of The Glorious Collective.

    1. Precisely. Even more, they fear that Britain will benefit from casting off the chains of servitude to Brussels. They hate freedom.

    2. We don’t what will happen, but if I were to guess, I think nothing will happen. The fact the left are unhinged about it suggests this may be the case. Sorta like climate change. The time to act is always ‘Now!’ and yet nothing happens.

      They’re hysterical ans irrational idiots.

    3. See also sequester

      1. Which one? There have been more than a dozen of them…

  12. Bank of England governor Mark Carney seems to have a different perspective:

    “There is the prospect of a material slowing of the economy,” the Bank of England governor said at a press briefing in London on Tuesday, after the central bank published its semi-annual Financial Stability Report. “The number of vulnerable households could increase due to a tougher economic outlook.”

    http://www.bloomberg.com/news/…..-stability

    1. Yes, Anal, the BoE governor is an idiot who benefits from raising the alarm.

    2. Bank of England governor Mark Carney seems to have a different perspective:

      Good to have you and your banalities back Venal Analman! Never stop regurgitating drivel; how are the book reviews shaping up at Amazon?

    3. Of course he’s going to warn of Brexit consequences it gives him a free out. If bad things happen there are 4 possibilities, 1) it’s Carney’s fault and he gets blamed for it, 2) it’s not Carney’s fault and he gets blamed for it, 3) It’s Carney’s fault and he doesn’t get blamed for it and 4) It’s Carney’s fault and he gets blamed for it. His job is to ensure that either 2 or 3 happen. He can’t ensure that the bad things don’t happen because if they do it’s often not his fault. So he has to create as many reasonable sounding justifications for why things went badly that aren’t him. Brexit is a massive gift. If things well then people will assume that things went well because Carney handled it well, rather than because of Brexit. If it goes badly people will assume that it went badly because of Brexit and it’s not Carney’s fault. If it goes well in some ways but badly in others, if it’s a bit of a wash, then people will assume that it was less of a disaster than it could have been because of competent men like Carney.

  13. “George Osborne, the Chancellor of the Exchequer, has announced that he is considering cutting Britain’s corporate tax from 20 percent to 15 percent”

    Does the British Government really work this way? Can one man increase/decrease the corporate tax rate on a whim? Or is this merely a euphemism?

    I realize our own (USA) government is only a stone’s throw away from bureaucratic judge/jury/executioner but it was still surprising.

    1. What it means is that the Chancellor of the Exchequer will submit a bill to Parliament that cuts the tax rate. Given that the Tories have a pretty sound majority and that such a bill would get at least some LibDem support it should pass quite easily .

      1. It’s also worth noting that in the US it is frequently reported that President X is considering cutting/raising taxes when clearly it is meant that he is planning to ask Congress to do so.

        The main difference in the Westminster or Parliamentary system is that since a Cabinet Minister’s party actually control the majority it is much more certain that he or she will actually win a vote on any legislation proposed.

      2. Just because he proposed it doesn’t mean it’ll get presented to Parliament. Yes, the Tories are generally the “cut taxes” party but I doubt they could get majority support to cut corporate taxes by 25%, it’s just too big of a change with everything else that’s going on.

        1. To some extent true. More than likely this is a “trial balloon” (something the Westminster system has made a fine art of). OTOH, as I noted, BREXIT* notwithstanding, the Government still has a comfortable majority and party discipline is still strong on matters of domestic policy.

          That said, trial balloons need a scapegoat to fall on his sword if gets deflated too dramatically and given the senior status of the Chancellor of the Exchequer (he’s basically the No 2 man in the government) I’d have to say he’s pretty comfortable with it going ahead.

          *the Tories do have a leadership problem in that they are split over remain and leave and the current PM was a remainer. But Labour has the same problem.

  14. I still do not think Article 50 will be invoked, at least not anytime soon.

    I think Parliament will likely be paralyzed after the leadership contests are resolved as they were torn asunder by the Brexit referendum (it’s also unlikely there’s a majority in Parliament in support of leaving, respecting the result of the plebiscite be damned).

    The new Tory PM may be forced to call a new general election in an attempt just to get anything done. The general election will, of course, be another contest between the “Remain” and “Leave” camps but it will be nearly impossible to determine which side “won” after the election since both parties are not anywhere near uniform on the issue.

    UKIP is probably going to be in disarray and may lose its support back to the Tories. It only has one MP as it is and its leader has decided to abandon ship even though his “goal” is not anywhere near being reached (winning a non-binding referendum by less than 4% is not sufficient IMO, especially after he claimed a few months ago that a Remain victory by 4% would require another referendum).

    Fun times ahead.

  15. RE: Brexit Continues to Reverberate Around the Globe
    Things are looking up.

    England never should have left the EU.
    Doesn’t the average Brit know their hard earned tax dollars should go to such incompetent and/or corrupt regimes in Greece, Spain, Portugal et al. so the ruling elitist classes in these countries can continue the loot their treasuries with impunity?
    Don’t the Brits understand these thieves and fools in office in these countries have a Swiss bank account to fill up? Don’t these Brits realize they are responsible for making the ruling elites in these countries rich?
    Whatever happened to the word “responsibility?”

  16. Brexit Continues to Reverberate Around the Globe
    Things are looking up.

    1. My comment disappeared. Maybe Hillary is already taking control.

      What I said was that maybe it’s just Comy coronating Hillary as Empress of the First Galactic Empire – for a safe and secure future!

      But I have my doubts that Brexit will ever come to pass. I had hopes that night of the vote, but looking at the new here and abroad, our rulers in the “free” West are more and more inclined to tell the peasants to go fuck themselves.

      I wonder if there is a betting line for the Brits actually leaving the EU. I’d bet no – the totalitarians seem like the smart bet.

      1. Speaking of Hillary taking control, seems like every time I post a nasty gram to her twitter feed, twitter informs me that there was an attempted breach of my account, and I should change my password.

  17. “A consensus seems to be emerging that Britain will be, at least initially, a low-tax and free-trade haven on the E.U.’s doorstep, a nightmare for Eurocrats if there ever were one.”

    Ooooh, this would make me happy.

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