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Very informative. Does this imply that Brexit is the rational choice for the UK?

by billfruit 7y ago

SideburnsOfDoom 7y ago
Mostly likely, the quest for a rational justification for brexit will continue.
- vixen99 7y ago
  Quest over! If you're actually interested in understanding the reasons for Brexit and you should before making such comments, try this https://briefingsforbrexit.com https://briefingsforbrexit.com. Not recommended for those with a short attention span. "Briefings for Brexit is a small group of volunteers, mainly academics, who set up the website in 2017 in order to provide reasoned factual material to help to inform the national debate on Brexit. Most of its members did not previously know each other. The two co-editors are Graham Gudgin and Robert Tombs, both of Cambridge University. Its contributors come from a range of academic disciplines and universities, and cover the whole political spectrum: their names can be found on our website. The group has no links with any political party. Neither of the editors receives any payment, not do any of the contributors. The newsletter editor, a student, receives a small payment. Briefings for Brexit is entirely funded by well-wishers."
  - SideburnsOfDoom 7y ago
    > The two co-editors are Graham Gudgin and Robert Tombs, both of Cambridge University But you don't mention: > Graham Gudgin is chief economic adviser at Policy Exchange https://www.theguardian.com/profile/graham-gudgin https://www.theguardian.com/profile/graham-gudgin Policy Exchange is part of : https://en.wikipedia.org/wiki/Tufton_Street https://en.wikipedia.org/wiki/Tufton_Street https://www.independent.co.uk/news/uk/politics/eu-referendum-eurosceptics-climate-change-sceptics-55-tufton-street-westminster-a6866021.html https://www.independent.co.uk/news/uk/politics/eu-referendum... > entirely funded by well-wishers Cool, how would I go about donating £10 to them? Would you say that this kind of small donation makes up the majority of their funding? Who are the large backers? So this is totally above board, unaligned and not paid for! /s
  - pjc50 7y ago
    > entirely funded by well-wishers. I wouldn't describe Aaron Banks and whatever group of people are named in the "Russia Report" as well-wishers. https://www.theweek.co.uk/105289/what-is-in-the-russia-report-being-suppressed-by-no-10 https://www.theweek.co.uk/105289/what-is-in-the-russia-repor...
- usrusr 7y ago
  Brits never experienced the tangible benefits of EU membership because they actively excluded themselves from both Schengen and the Euro. It's not really surprising that many reject something that is only an abstract macroeconomic set of rules to them. Contrast this with public opinion in Germany back before the common currency: most German EU supporters were openly afraid that the Euro could seriously endanger their economy, but they considered it well worth the risk just for complementing the convenience of open borders with an end to the hassle of dealing with foreign currencies. To anyone with a bit of critical thinking ability, macroeconomic decisions are close to a coin toss: both sides have good arguments and nobody has convincing data to back up their claim (if there was there wouldn't be a decision to be made).
blablabla123 7y ago
Maybe there's a simpler explanation, in Germany businesses are run quite conservatively in comparison. Nice for stability but probably bad for innovation. By the way, Germany is one of the top 5 exporting countries since decades, so this has little to do with the Euro: https://wits.worldbank.org/CountryProfile/en/Country/WLD/Year/1990/TradeFlow/EXPIMP https://wits.worldbank.org/CountryProfile/en/Country/WLD/Yea... https://wits.worldbank.org/CountryProfile/en/Country/WLD/Year/2000/TradeFlow/EXPIMP/Partner/by-country https://wits.worldbank.org/CountryProfile/en/Country/WLD/Yea...
- slowmovintarget 7y ago
  In part, it has to do with the fact that many items made in Germany are of high quality. Most goods that are sold in U.S. for instance, are made in China. Often times these goods simply fall apart (dishwashers, washing machines), are defective, or have toxic odors (like full-color books). Not so for things made in the U.S. or Europe, and it just so happens that there are a great many things that Germany makes now, where they are the only high-quality source.
  - casefields 7y ago
    The reminds me of when people would ask how it was possible that Madoff was such a successful investor; he's just better than everyone else.
- stefano 7y ago
  Can't be so bad for innovation if they're ranking first in this classification: https://www.bloomberg.com/news/articles/2020-01-18/germany-breaks-korea-s-six-year-streak-as-most-innovative-nation https://www.bloomberg.com/news/articles/2020-01-18/germany-b...
- jhoechtl 7y ago
  As an Austrian sharing some history with Germany and always looking suspiciously what is going on there, I have been multiple times astonished by my fellow neighbors: Productivity: They work hard, a lot and deliver. Education: above average and leaning towards being curious Conservativism: depends on county but is a thing Innovation: despite conservtivism inmovation is high Collaboration and criticism: Even though you might be in strong disagree with someone arguments count and once you quickly talked out the differences, intense collaboration towards goal achievemt is obvious. I worked for 10+ years in continuing education and had students of all age and all infustrial sectors and these have been common shared characterstics. Favorable characterstics towards success I would say. (Edited formating)
folli 7y ago
Rational if they export below the average of other EU nations, not rational if they export above the average of other EU nations.
heisenbit 7y ago
Maybe, if it is rational to loose ones status as Europe‘s financial hub which was one of the key drivers in the past for the high pound exchange value.
- pretendscholar 7y ago
  There are winners and losers to having a strong currency. It isn't inherently a bad thing to make the currency less valuable.
  - grogenaut 7y ago
    What are the winners going to be? What industries does Britain Excel at besides finance? I am asking sincerely.
    - jariel 7y ago
      Medical research and equipment, drugs, industrial equipment, engines particularly aeroplane, defence, branded goods etc. Departure won't ruin London as a financial capital, but it will shift the types of financing. Brexit is far, far more than just an economic issue.
    - tonyedgecombe 7y ago
      Nobody else can excel because finance dominates and makes other industries less competitive. It's like Dutch disease with money instead of oil.
  - notahacker 7y ago
    The winners are normally exporters, who have other reasons to be concerned...
mandevil 7y ago
Britain already used its own currency, so they didn't have the same sort of 'Greece and Spain suffering to subsidize German exports' effect going on. So I don't think this particular issue will be different from before Brexit. ETA: It will matter if the City continues to dominate European financial transactions, because it is the tremendous amount of money that goes to the City which keeps the Pound priced above the levels that are good for manufacturing exports. If the multinationals all move to Hamburg or wherever, the Pound (probably) loses in value and British manufactured goods become more competitive on the global market. In theory. Possibly. Who knows?
- patrickmcnamara 7y ago
  Their goods would also be subject to EU tariffs depending on how trade talks go and the EU accounts for ~50% of UK trade iirc. So it's still very up in the air.
  - mandevil 7y ago
    Yes. I am not an economist, and even if I were, there are so many moving parts to Brexit I could not begin to calculate which ones are the most important. But I do believe that financial exports (which is what the US and UK have specialized in since the Reagan/Thatcher era) create Dutch Disease just like natural resource extraction does, making the currency too valuable for high employment sectors and concentrating profits in low-employment sectors.
- Zenst 7y ago
  Yes the whole QE of the EURO by the ECB has been most dramatic and artificially kept the EURO competitive for the export market over the import market. That's one ticking time-bomb that they keep resetting with new QE initiatives, that will have to end soon and suspect BREXIT will offer a wonderful scapegoat opportunity that may well be availed. [EDIT ADD} Nice article highlighting the QE situation: https://www.ft.com/content/e4964f08-f196-11e9-ad1e-4367d8281195 https://www.ft.com/content/e4964f08-f196-11e9-ad1e-4367d8281... Also worth noting that negative interest rates seem to be the new tool that will replace/augment QE. Which may just work, though once again, perpetuating a mindset that borrowing over saving mentality in a way that whole generations will become saving avert. More so if/when negative interest rates take traction.
deleted 7y ago
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deleted 7y ago
[deleted]

Very informative. Does this imply that Brexit is the rational choice for the UK?

SideburnsOfDoom 7y ago

Mostly likely, the quest for a rational justification for brexit will continue.

vixen99 7y ago
Quest over! If you're actually interested in understanding the reasons for Brexit and you should before making such comments, try this https://briefingsforbrexit.com https://briefingsforbrexit.com. Not recommended for those with a short attention span. "Briefings for Brexit is a small group of volunteers, mainly academics, who set up the website in 2017 in order to provide reasoned factual material to help to inform the national debate on Brexit. Most of its members did not previously know each other. The two co-editors are Graham Gudgin and Robert Tombs, both of Cambridge University. Its contributors come from a range of academic disciplines and universities, and cover the whole political spectrum: their names can be found on our website. The group has no links with any political party. Neither of the editors receives any payment, not do any of the contributors. The newsletter editor, a student, receives a small payment. Briefings for Brexit is entirely funded by well-wishers."
- SideburnsOfDoom 7y ago
  > The two co-editors are Graham Gudgin and Robert Tombs, both of Cambridge University But you don't mention: > Graham Gudgin is chief economic adviser at Policy Exchange https://www.theguardian.com/profile/graham-gudgin https://www.theguardian.com/profile/graham-gudgin Policy Exchange is part of : https://en.wikipedia.org/wiki/Tufton_Street https://en.wikipedia.org/wiki/Tufton_Street https://www.independent.co.uk/news/uk/politics/eu-referendum-eurosceptics-climate-change-sceptics-55-tufton-street-westminster-a6866021.html https://www.independent.co.uk/news/uk/politics/eu-referendum... > entirely funded by well-wishers Cool, how would I go about donating £10 to them? Would you say that this kind of small donation makes up the majority of their funding? Who are the large backers? So this is totally above board, unaligned and not paid for! /s
- pjc50 7y ago
  > entirely funded by well-wishers. I wouldn't describe Aaron Banks and whatever group of people are named in the "Russia Report" as well-wishers. https://www.theweek.co.uk/105289/what-is-in-the-russia-report-being-suppressed-by-no-10 https://www.theweek.co.uk/105289/what-is-in-the-russia-repor...
usrusr 7y ago
Brits never experienced the tangible benefits of EU membership because they actively excluded themselves from both Schengen and the Euro. It's not really surprising that many reject something that is only an abstract macroeconomic set of rules to them. Contrast this with public opinion in Germany back before the common currency: most German EU supporters were openly afraid that the Euro could seriously endanger their economy, but they considered it well worth the risk just for complementing the convenience of open borders with an end to the hassle of dealing with foreign currencies. To anyone with a bit of critical thinking ability, macroeconomic decisions are close to a coin toss: both sides have good arguments and nobody has convincing data to back up their claim (if there was there wouldn't be a decision to be made).

blablabla123 7y ago

Maybe there's a simpler explanation, in Germany businesses are run quite conservatively in comparison. Nice for stability but probably bad for innovation. By the way, Germany is one of the top 5 exporting countries since decades, so this has little to do with the Euro: https://wits.worldbank.org/CountryProfile/en/Country/WLD/Year/1990/TradeFlow/EXPIMP https://wits.worldbank.org/CountryProfile/en/Country/WLD/Yea... https://wits.worldbank.org/CountryProfile/en/Country/WLD/Year/2000/TradeFlow/EXPIMP/Partner/by-country https://wits.worldbank.org/CountryProfile/en/Country/WLD/Yea...

slowmovintarget 7y ago
In part, it has to do with the fact that many items made in Germany are of high quality. Most goods that are sold in U.S. for instance, are made in China. Often times these goods simply fall apart (dishwashers, washing machines), are defective, or have toxic odors (like full-color books). Not so for things made in the U.S. or Europe, and it just so happens that there are a great many things that Germany makes now, where they are the only high-quality source.
- casefields 7y ago
  The reminds me of when people would ask how it was possible that Madoff was such a successful investor; he's just better than everyone else.
stefano 7y ago
Can't be so bad for innovation if they're ranking first in this classification: https://www.bloomberg.com/news/articles/2020-01-18/germany-breaks-korea-s-six-year-streak-as-most-innovative-nation https://www.bloomberg.com/news/articles/2020-01-18/germany-b...
jhoechtl 7y ago
As an Austrian sharing some history with Germany and always looking suspiciously what is going on there, I have been multiple times astonished by my fellow neighbors: Productivity: They work hard, a lot and deliver. Education: above average and leaning towards being curious Conservativism: depends on county but is a thing Innovation: despite conservtivism inmovation is high Collaboration and criticism: Even though you might be in strong disagree with someone arguments count and once you quickly talked out the differences, intense collaboration towards goal achievemt is obvious. I worked for 10+ years in continuing education and had students of all age and all infustrial sectors and these have been common shared characterstics. Favorable characterstics towards success I would say. (Edited formating)

folli 7y ago

Rational if they export below the average of other EU nations, not rational if they export above the average of other EU nations.

heisenbit 7y ago

Maybe, if it is rational to loose ones status as Europe‘s financial hub which was one of the key drivers in the past for the high pound exchange value.

pretendscholar 7y ago
There are winners and losers to having a strong currency. It isn't inherently a bad thing to make the currency less valuable.
- grogenaut 7y ago
  What are the winners going to be? What industries does Britain Excel at besides finance? I am asking sincerely.
  - jariel 7y ago
    Medical research and equipment, drugs, industrial equipment, engines particularly aeroplane, defence, branded goods etc. Departure won't ruin London as a financial capital, but it will shift the types of financing. Brexit is far, far more than just an economic issue.
  - tonyedgecombe 7y ago
    Nobody else can excel because finance dominates and makes other industries less competitive. It's like Dutch disease with money instead of oil.
- notahacker 7y ago
  The winners are normally exporters, who have other reasons to be concerned...

mandevil 7y ago

Britain already used its own currency, so they didn't have the same sort of 'Greece and Spain suffering to subsidize German exports' effect going on. So I don't think this particular issue will be different from before Brexit. ETA: It will matter if the City continues to dominate European financial transactions, because it is the tremendous amount of money that goes to the City which keeps the Pound priced above the levels that are good for manufacturing exports. If the multinationals all move to Hamburg or wherever, the Pound (probably) loses in value and British manufactured goods become more competitive on the global market. In theory. Possibly. Who knows?

patrickmcnamara 7y ago
Their goods would also be subject to EU tariffs depending on how trade talks go and the EU accounts for ~50% of UK trade iirc. So it's still very up in the air.
- mandevil 7y ago
  Yes. I am not an economist, and even if I were, there are so many moving parts to Brexit I could not begin to calculate which ones are the most important. But I do believe that financial exports (which is what the US and UK have specialized in since the Reagan/Thatcher era) create Dutch Disease just like natural resource extraction does, making the currency too valuable for high employment sectors and concentrating profits in low-employment sectors.
Zenst 7y ago
Yes the whole QE of the EURO by the ECB has been most dramatic and artificially kept the EURO competitive for the export market over the import market. That's one ticking time-bomb that they keep resetting with new QE initiatives, that will have to end soon and suspect BREXIT will offer a wonderful scapegoat opportunity that may well be availed. [EDIT ADD} Nice article highlighting the QE situation: https://www.ft.com/content/e4964f08-f196-11e9-ad1e-4367d8281195 https://www.ft.com/content/e4964f08-f196-11e9-ad1e-4367d8281... Also worth noting that negative interest rates seem to be the new tool that will replace/augment QE. Which may just work, though once again, perpetuating a mindset that borrowing over saving mentality in a way that whole generations will become saving avert. More so if/when negative interest rates take traction.

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