[Discussion] Brexit means Brexit

Discuss the political fallout and other issues around Britain's exit, Brexit for short, from the EU.

For the sake of clarity, I'm including the full text of Article 50.

Article 50 wrote:

1. Any Member State may decide to withdraw from the Union in accordance with its own constitutional requirements.

2. A Member State which decides to withdraw shall notify the European Council of its intention. In the light of the guidelines provided by the European Council, the Union shall negotiate and conclude an agreement with that State, setting out the arrangements for its withdrawal, taking account of the framework for its future relationship with the Union. That agreement shall be negotiated in accordance with Article 218(3) of the Treaty on the Functioning of the European Union. It shall be concluded on behalf of the Union by the Council, acting by a qualified majority, after obtaining the consent of the European Parliament.

3. The Treaties shall cease to apply to the State in question from the date of entry into force of the withdrawal agreement or, failing that, two years after the notification referred to in paragraph 2, unless the European Council, in agreement with the Member State concerned, unanimously decides to extend this period.

4. For the purposes of paragraphs 2 and 3, the member of the European Council or of the Council representing the withdrawing Member State shall not participate in the discussions of the European Council or Council or in decisions concerning it.

A qualified majority shall be defined in accordance with Article 238(3)(b) of the Treaty on the Functioning of the European Union.

5. If a State which has withdrawn from the Union asks to rejoin, its request shall be subject to the procedure referred to in Article 49.

farley3k wrote:

IMAGE(http://i.imgur.com/0xtEeAy.gif)

Oh my god, love it.

It's convenient how the government is purposely forgetting that the vote was advisory only. It was never painted as anything but advisory until it won, and then suddenly they're trying to treat it like it's legally binding.

And this court case is obvious. Of course May can't just unilaterally take Britain out of the EU. She has to have authorization from the legislature, which she doesn't have. Otherwise, any random person in the UK executive arm could just write out "We quit, arkle fifty!" on a napkin, and voila, Britain is out 2 years later.

Without that legislative backing, May is no different than any other schmoe in the government in that regard.

Further, May says her red line is controlling immigration; Corbyn (the leader of the Labour party) is saying he requires access to the free market. They can't have both things at the same time.

It seems to me that there needs to be a vote on a new government, however that's triggered. Then, if it seems like Britons really do want out, it needs to pass the legislature and be enacted by the PM.

And Scotland leaving the UK seems quite likely, if the government's really going to go through with it. They want to stay in the EU very, very much. (sensibly.)

Cameron screwed over the UK but good with those political games. Jesus, what a mess he's made.

Back from a weekend in Yorkshire (it's grim up North but that's where the in-laws are) and it's strange checking in with those people I know who voted Leave. No real regret about the vote but a little bit of anger about how it's being interpreted. All those I know who voted leave did so for Sovereignty reasons and a general suspicion of a European superstate[1]. Most of them think the aim should be to return to the EEC style economic/trade union of the early-mid 1990s. My father in law (enthusiastic leave voter) can't understand why the Mail especially felt the need to go so hard after the members of the High court for a ruling which is pretty much exactly the law as he understood it.

I'm not sure that a general election is going to help much here. Regardless of whether Brexit happens or not the Labour party is not done imploding. I can't see anything other than a return of a Conservative majority happening in an election. How many seats would the Lib Dems need to take back to over rule the referendum vote? If the UKIP vote from last election gets converted into seats, what would that mean? People don't vote single issues in a general election and there are a lot more pressing things for most people than a fairly abstract relationship with the global economy.

[1] Since I'm Irish, they are too polite to complain about "Foreigners coming over here taking our jobs and women" to my face. ^_^

Quality rant. Spoilered for extreme sweariness.

Spoiler:
DoveBrown wrote:

Back from a weekend in Yorkshire (it's grim up North but that's where the in-laws are) and it's strange checking in with those people I know who voted Leave. No real regret about the vote but a little bit of anger about how it's being interpreted. All those I know who voted leave did so for Sovereignty reasons and a general suspicion of a European superstate[1]. Most of them think the aim should be to return to the EEC style economic/trade union of the early-mid 1990s. My father in law (enthusiastic leave voter) can't understand why the Mail especially felt the need to go so hard after the members of the High court for a ruling which is pretty much exactly the law as he understood it.

I'm not sure that a general election is going to help much here. Regardless of whether Brexit happens or not the Labour party is not done imploding. I can't see anything other than a return of a Conservative majority happening in an election. How many seats would the Lib Dems need to take back to over rule the referendum vote? If the UKIP vote from last election gets converted into seats, what would that mean? People don't vote single issues in a general election and there are a lot more pressing things for most people than a fairly abstract relationship with the global economy.

[1] Since I'm Irish, they are too polite to complain about "Foreigners coming over here taking our jobs and women" to my face. ^_^

Right now a general election is going to achieve nothing, other than maybe at least attempt to provide a little clarification. The conservative party's problem, in a nutshell is that if the go into an election on a 'soft Brexit' manifesto then they will lose all their 'hard brexit' supporters to UKIP. If it's hard brexit we'll god knows what will happen frankly, I suspect a lot of people just won't vote. They aren't going to go to Labour while Corbyn is in charge, and the Lib Dems are a spent force. Therefore they'll probably have to go in on some sort of hard brexit promise so they don't lose seats to UKIP.

It's massively depressing. And of the leavers I know, most are just as concerned about immigration as they are loss of sovereignty.

I'd love a second referendum, but put "Hard Remain" on the ballot. Get rid of the pound and switch to the Euro. Add French as an official language. Bilingual signs. It would really annoy the Brexiters.

What's all this shouting? We'll have no trouble here. This is a local brexit for local people.

British government departments overwhelmed by the scale of the task. Really fills you with confidence that they know what they are doing, doesn't it?

Right now I could seriously do with some advice on how not to be angry.

The problem is it's not productive anger.

It's I can't even face the prospect of talking with the majority of people in the country anger.

Sadly, I can relate.

strangederby wrote:

It's I can't even face the prospect of talking with the majority of people in the country anger.

It's not really "people's" fault.

What you're seeing in Brexit (and the rise of Trump) is people's quasi-rational reaction to the evident but usually poorly understood failures of globalisation and neo-liberal economic doctrine.

If you wish to blame any one and direct your anger productively I would say that the left wing and centre-left parties of the UK, the EU and US political establishment are the correct sources of your anger. Without the fundamental embrace of neo-liberalism by the establishment left we almost certainly would not be have seen either a Brexit or Trump victory today.

DanB wrote:

If you wish to blame any one and direct your anger productively I would say that the left wing and centre-left parties of the UK, the EU and US political establishment are the correct sources of your anger. Without the fundamental embrace of neo-liberalism by the establishment left we almost certainly would not be have seen either a Brexit or Trump victory today.

Possibly worth mentioning Charlie Stross's beige dictatorship predictions, which he's updated to be even more pessimistic. The geist of the argument is that incentives for political parties to stay in power meant that the range of choices for voters narrowed, burying discontent until it erupted. He's now speculating about a deliberate global push, though I'm inclined to think that the larger social forces didn't need much of a push.

I would agree with the take on represntative democracy restricting the set of acceptable political choice and it is commonly articulated by the radical and anarcho-socialist left. You'll find it in the works of chomsky and it is old as De Tocquiville.

I'd say the only thing he gets wrong is the notion underlying assumption that western democracy was previously different and has recently become "stuck" in this beige state.

That sounds scarily plausible, buuuuut kinda conspiracy theory-ish....I always wonder if people give Russia too much credit for being Machiavellian geniuses. They always seem as surprised as anyone that their bullsh*t works half the time.

In fact, Putin has survived largely on being able to point to America as the source of pretty much ALL Russia and the World's problems (generally via the mouthpiece of Russia Today). He'd have been in a better position with Hilary in office.

Vladimir Putin’s big problem: America is no longer the enemy

There is another problem. Putin has always enjoyed being a part of the global neoconservative trend that was born from dissatisfaction with the world order that emerged in the beginning of the 21st century. Putin’s Russia loves to lambast the west for excessive interest in the rights of minorities, for refugee policy and other liberal issues. Now that the west is turning on itself in these matters, with victories for Brexit and Trump, the Kremlin doesn’t quite know where to turn.

The Kremlin needed Trump, but as a loser, not a winner. They wanted to be able to continue to oppose the international mainstream, not be a part of it. Now Putin’s main foreign policy objective must be to fall out with Trump, because without that, the Kremlin will have no one to blame for Russia’s problems but Russia.

Then again, maybe I just read the Guardian too much.

pyxistyx wrote:

That sounds scarily plausible, buuuuut kinda conspiracy theory-ish....I always wonder if people give Russia too much credit for being Machiavellian geniuses. They always seem as surprised as anyone that their bullsh*t works half the time.

That part I'm also a bit skeptical of, but the whole thing also works if the driving force is merely something like Thomas Piketty's theory that capital returns have been outgrowing economic growth. With enough shared interests, people will act in similar ways without needing active coordination. (And it makes it easier to just nudge things.)

DanB wrote:

I would agree with the take on represntative democracy restricting the set of acceptable political choice and it is commonly articulated by the radical and anarcho-socialist left. You'll find it in the works of chomsky and it is old as De Tocquiville.

I'd say the only thing he gets wrong is the notion underlying assumption that western democracy was previously different and has recently become "stuck" in this beige state.

I'd also take issue with his focus on first past the post systems. His descriptions don't fit with Irish and continental European parties. There is a far greater diversity of opinion in these Parliaments than painted by his post. It will remain to be seen how successful Le Pen and all her other European fellow travellers are over the coming years but it's not as if those voice or their counterparts on the left don't occupy seats in our institutions.

I will concede, as somebody who supported the German led austerity of the past decade that now is the time for the EU to become far more fiscally active. The member states themselves can avoid the borrowing and the EU could use the ESFS fund to create a large cash pile and embark on a continent stimulus. Unfortunately it's not likely to happen until after the German Federal Elections and by then it could be too late.

Gremlin wrote:
pyxistyx wrote:

That sounds scarily plausible, buuuuut kinda conspiracy theory-ish....I always wonder if people give Russia too much credit for being Machiavellian geniuses. They always seem as surprised as anyone that their bullsh*t works half the time.

That part I'm also a bit skeptical of, but the whole thing also works if the driving force is merely something like Thomas Piketty's theory that capital returns have been outgrowing economic growth. With enough shared interests, people will act in similar ways without needing active coordination. (And it makes it easier to just nudge things.)

I'd recommend you watch this. Long and by no means completely accurate but explains Russian influence. I've no doubt it's there. Very much suspected I was fighting it in a couple of referendums here.

Axon wrote:

I will concede, as somebody who supported the German led austerity of the past decade that now is the time for the EU to become far more fiscally active.

EU Austerity was always wrong. All that happens is aggregate demand falls and the economy stalls.

And when it's real bad you get massive unemployment (running up to 20% in Spain, Italy, Greece, Ireland) which causes migration to better functioning economies (Britain, France, Germany). Which in turn leads to resentment in the local local population. You can draw a straight line between complete fiscal mismanagement of the Euro and the success of the Brexit vote.

In you want to read some shockingly prophetic check out this piece from 1992:

http://www.lrb.co.uk/v14/n19/wynne-g...

The government rejects memo that suggests they have no idea what they are doing and that it is causing problems within the Tory party.

Also in the same article - Labour confirm they aren't quite intent on suicide as some would suggest by saying they won't block Article 50 - thank god since it's the Labour heartlands that voted for leave. Still don't think Corbyn has a chance on account he has all the personality of a brick.

DanB wrote:
Axon wrote:

I will concede, as somebody who supported the German led austerity of the past decade that now is the time for the EU to become far more fiscally active.

EU Austerity was always wrong. All that happens is aggregate demand falls and the economy stalls.

And when it's real bad you get massive unemployment (running up to 20% in Spain, Italy, Greece, Ireland) which causes migration to better functioning economies (Britain, France, Germany). Which in turn leads to resentment in the local local population. You can draw a straight line between complete fiscal mismanagement of the Euro and the success of the Brexit vote.

In you want to read some shockingly prophetic check out this piece from 1992:

http://www.lrb.co.uk/v14/n19/wynne-g...

I've decided to drag the majority of my response over to another thread that is more relevant. Trying to keep this Brexit focused. Hope you don't mind.

The above link, while interesting, has a flaw for me. Countries all over the world have had financial crises and they never gotten out of them without serious pain. You can claim that there is an easier path but seeing as I also lived through the 80s' in Ireland where it tried to solve it's problems using those alternatives I'm not a believer.

Besides, the entire point of the Euro is to prevent devaluing and "beggar-thy-neighbour" policies of the past. Pointing it out in 1992 wasn't exactly all that clever. It still remains, however, that the Euro was not constructed properly as it was assumed that it would eventually come with time. It remains to be seen if the reforms in the last 5-6 years will be sufficient for the next crisis. Didn't think it would be so soon.

(I'm not sure if this still belong in the Brexit discussion or the European one but I think it's more relevant to here. Open to correction)

Axon wrote:

Besides, the entire point of the Euro is to prevent devaluing and "beggar-thy-neighbour" policies of the past. Pointing it out in 1992 wasn't exactly all that clever.

It was moderately clever given that many countries seem delighted to enter the Eurozone irrespective of the challenges is causes.

Axon wrote:

It still remains, however, that the Euro was not constructed properly as it was assumed that it would eventually come with time. It remains to be seen if the reforms in the last 5-6 years will be sufficient for the next crisis.

As formulated any changes to the economic structure of the Eurozone are going to prove insufficient to ward off the next crisis. And as long as such crises loom it will generate plenty of ammunition for nationalist, far-right elements of the assorted EU nations.

EU Austerity was always wrong. All that happens is aggregate demand falls and the economy stalls.

This is fine. Low or even negative economic growth is important, sometimes. This is how the economy learns what's not working.

At any given time, there will be a whole mix of individual ideas on how to run businesses and personal finance. Some are good, some are bad, some are absolutely foundational and can't be dispensed with. If the economy is always in growth mode, especially if it's always in *boom* mode, then bad ideas can take root and spread. If enough of them get into the economy, it can become dependent on that hypergrowth just to function. This ultimately leads to systemic failure.

Booms are important sometimes, but so are the busts. They matter. They teach everyone what the good ideas actually are. All the Germans are doing is insisting on living within their means. This is exactly the correct behavior. Countries shouldn't be running up debt to prop up the economy except in dire emergency.

Malor wrote:

This is fine. Low or even negative economic growth is important, sometimes. This is how the economy learns what's not working.

Within constrained portions of your economy it is totally fine when things fail or minor bubbles burst. If any bubble bursting adds multiple percentage points on to the national unemployment figure then the economy is being wildly mismanaged.

Malor wrote:

At any given time, there will be a whole mix of individual ideas on how to run businesses and personal finance. Some are good, some are bad, some are absolutely foundational and can't be dispensed with.

Sure, there should always be innovation and turnover of businesses in the economy.

Malor wrote:

If the economy is always in growth mode, especially if it's always in *boom* mode, then bad ideas can take root and spread. If enough of them get into the economy, it can become dependent on that hypergrowth just to function. This ultimately leads to systemic failure.

This very much depends on what growth we're talking about, capacity growth, diversification, innovation etc.... Real growth, say the expansion of the capacity to feed an increasing population, is likely never a bad thing and definitely terrible if it collapses and leaves hungry mouths to feed. Speculative growth should be managed to avert economy damaging scale bubbles from occurring (c.f. sub-prime mortgage market collapse)

Malor wrote:

Booms are important sometimes, but so are the busts. They matter.

There is no real way to approach this that applies to all market segments.

Malor wrote:

All the Germans are doing is insisting on living within their means. This is exactly the correct behavior. Countries shouldn't be running up debt to prop up the economy except in dire emergency.

well... this is an attitude that utterly ignores how trade in the EU functions. Germany is a net exporter and Greece is a net importer. Greece was borrowing money from German banks to buy German exports. German firms make money by ensuring the system works that way. Forcing Greece to "live within its means" has the knock on effect of reducing demand for German exports. If the EU were serious about forcing all countries to live within their means the German economy would tank, something which they have no appetite for.

I would agree that more precisely that countries should not borrow (or create money) that outpaces their projected rate of growth but government borrowing is not in itself bad as long as it can be cleared in a timely manner.

Forcing Greece to "live within its means" has the knock on effect of reducing demand for German exports.

Greece, after they first stabilized, should have defaulted on every loan taken before the first crisis. They're in debt slavery there, and that's one of the best examples I can think of for why deficit spending can be so incredibly dangerous. They were foolish to go along with that program.

Germany is equally foolish to be lending them money to buy their stuff. That's just deficit spending from a different angle, artificially jacking up demand. If they can't afford it, they can't afford it, and forcing them to pay interest on top of all the other things they have to pay for is just unconscionable.

If they wanted to give them the stuff, that would be fine, but they're not doing that.

but government borrowing is not in itself bad as long as it can be cleared in a timely manner.

It really depends on what it's being used for. If it's genuine investment (like, say, a hydroelectric plant), then failing to borrow can be the bad idea. If you're borrowing for a project that will actively pay for itself, that's very often a good idea.

But if they're borrowing to fund basic services, like healthcare or welfare or whatever, that's very, very foolish.

If the EU were serious about forcing all countries to live within their means the German economy would tank, something which they have no appetite for.

In other words: they're living beyond their means. This is a bad idea. That debt has to be paid. Failing to do so will have catastrophic consequences. Not living within your means, as a country, can be kept up for quite a long time, but it will directly reduce the standard of living in later years, and if it's kept up too long, can effectively destroy the country's economy. See: Greece.

Malor wrote:
EU Austerity was always wrong. All that happens is aggregate demand falls and the economy stalls.

This is fine. Low or even negative economic growth is important, sometimes. This is how the economy learns what's not working.

Fair enough. But purpose of government spending in a recession is not to bring the economy into any kind of a boom. It is to make the recession a little less damaging. It is to prevent losing a generation of young people to unemployment. Or electing Trumps. Arguably as much as investment as a hydroelectric plant might be.

I think we are all generally in agreement. Can any future responses should go to the other thread. With the EU changing it's (or at least trying to) fiscal policy, I think it's more apt there. Sorry, I'll stop backseat modding now.

In Brexit news, Labour leadership is all for Brexit. Apparently you are on the side of the "corporate elites" if you don't support it.

There must be serious talk about another party.

Corbyn's backing of Brexit is a matter of deep sorrow to me, given how important EU money is to the more deprived areas of the UK. I never thought I'd get to this point, but I'm a single issue Bremain voter right now, and I'd be willing to compromise other policy areas to try and stop Brexit happening.

Thankfully my constituency (and Dan's as well I guess) is effectively Tory vs Lib Dem, so I've always voted Lib Dem here.

I guess I'll have to gear up with a long argument with my parents about this (they live up north and are lifetime Labour party members).

Sorry a bit of a confused wall of text as I'm on a train of I've compressed my responses in to one post:

Malor wrote:

But if they're borrowing to fund basic services, like healthcare or welfare or whatever, that's very, very foolish.

I almost completely agree with everything you've said apart perhaps this statement. As long as borrowing for these kinds of services causes growth (or a taxable increase in the amount of economic activity) then it won't be a drag on the economy, nor will it increase the national debt. For instance borrowing for healthcare ought to increase the total number of productive man hours available in the economy (and that extra activity can be taxed). Borrowing for welfare payments needn't be bad either as you can be pretty sure any money given out will be used to stimulate demand (i.e. poorer people principally spend on goods as they must eat, clothe and house themselves).

The important thing is whether the borrowing has a positive or fiscal multiplier or not. Any gov't borrowing without a positive fiscal multiplier shouldn't happen because that will just add to the total debt. Borrowing with an adequate multiplier is fine as the debt will be cleared in short order. The Greek issue is a total lack of any handle on what (if any) productivity impact their borrowing was having.

Axon wrote:

ICan any future responses should go to the other thread.

I appreciate this request but I don't think it's possible to separate out the economic future of the EU and the possible future/fallout of Brexit in this way. Understanding what EU is doing economically profoundly affects what you think the outcome of Brexit might be.

DudleySmith wrote:

Corbyn's backing of Brexit is a matter of deep sorrow to me, given how important EU money is to the more deprived areas of the UK. I never thought I'd get to this point, but I'm a single issue Bremain voter right now, and I'd be willing to compromise other policy areas to try and stop Brexit happening.

I'm not happy that Brexit might happen under the auspices of a Tory government, I think that's a recipe for utter economic disaster in the UK. More generally I think the Euro is poison to the EU and I don't think the EU has a future if it can't fix the Euro. Under that point of view Brexit is probably not the worst thing that might happen.

Of course I'd much rather we stayed in the EU and worked to fix the Euro, out of the EU we will have no ability to influence affairs.

DanB wrote:
Axon wrote:

ICan any future responses should go to the other thread.

I appreciate this request but I don't think it's possible to separate out the economic future of the EU and the possible future/fallout of Brexit in this way. Understanding what EU is doing economically profoundly affects what you think the outcome of Brexit might be.

Grand. Just asking everyone to keep there eye on the ball

DanB wrote:
DudleySmith wrote:

Corbyn's backing of Brexit is a matter of deep sorrow to me, given how important EU money is to the more deprived areas of the UK. I never thought I'd get to this point, but I'm a single issue Bremain voter right now, and I'd be willing to compromise other policy areas to try and stop Brexit happening.

I'm not happy that Brexit might happen under the auspices of a Tory government, I think that's a recipe for utter economic disaster in the UK. More generally I think the Euro is poison to the EU and I don't think the EU has a future if it can't fix the Euro. Under that point of view Brexit is probably not the worst thing that might happen.

Of course I'd much rather we stayed in the EU and worked to fix the Euro, out of the EU we will have no ability to influence affairs.

There has been a lot of work in reforming the Euro. Here is a good list. In fact one of the reasons many on the continent were not all that sad to see the UK leave is that the UK was precieved to be, rightly or wrongly, the biggest break on the reforms. Even I really doubted the UK had the will to see through the reforms required.

Have those reforms been enough? That remains to be seen but it's at least going in the right direction. I'd expect that over the coming years that the pressure to join the Euro if you want to be a "full" member of the EU will become to great. It's patently heading in that direction also.

The important thing is whether the borrowing has a positive or fiscal multiplier or not.

The problem is that that can be gamed. And if you start borrowing for basic consumption, like Britain is already doing so heavily, you end up in this mode where you can't stop borrowing, even though the returns have gone negative. (or even started negative.) The UK is in really, really deep sh*t with its debt levels; it's bleeding the wealth out of the country, and into the pockets of the lenders. They've been living beyond their means for a long, long time.

It seems to me that Brexit would be absolutely catastrophic for a country in that much debt. They just can't afford economic disruption right now, and in fact, may need a bailout from countries with actual fiscal discipline. They're a lot less likely to get it, should they not be in the EU.

The U.K. is living way beyond its means at the moment, and its standard of living needs to drop dramatically, very much like Greece. And, of course, they'll try to load all that pain onto poor people, the ones that had no idea that all that debt was so amazingly toxic.

(edit to add: Debt-to-GDP levels are another very toxic idea, because GDP is another figure that's very heavily gamed. There are powerful political forces that want that GDP number to go up, so the people figuring those numbers come up with ways to do so, whether or not it's connected in any way to the underlying economic reality. Debt is a hard value, but GDP is artificially defined, and can be redefined at government whim. )

Government borrowing is one of the few ways in which parents are allowed to put their children, and grandchildren, in debt. It needs to be treated very, very carefully.