Is austerity dead?

“The problem is that many who voted leave thought this was all about immigration and EU rules, whereas in reality it was mostly about austerity. The Poles, the Czechs and the Hungarians came to the UK to work; they have higher employment rates than those born in the UK and pay far more into the system than they take out. It is clear that the rising number of immigrants has put pressure on public services but this was mostly because Osborne under-invested in services in order to shrink the state. They paid their taxes, but Slasher didn’t invest that money in new schools, houses and hospitals.”

This analysis is interesting.

Of course, this is not good news.
The Brexit vote will kill austerity | David Blanchflower

"The pound has collapsed to a 30-year low and the share prices of banks, estate agents and homebuilders are down sharply amid recession fears since the Brexit vote … The UK’s holdings in RBS alone are down by a third in a week; 9.1bn shares have dropped in value by about 80p a share, so that is a loss of more than £7bn. Add to that a drop of 17p in the value of the 15bn shares in Lloyds Bank the country owns, and, as a starter, Michael Gove, Boris Johnson and the leavers have already cost the country more than £10bn in losses.
“The leave campaign said this wouldn’t happen, despite warnings from hundreds of economists who were dismissed as worthless experts. It was clear the Brexiters had no plan and, among other things, lied about £350m a week being available to fund the NHS. Those who voted for Brexit disproportionately, it turns out, will lose from it: EU funding for places such as Cornwall and Wales that voted to leave will inevitably dry up.”

Japan’s businesses are already feeling the Brexit pinch as the surging yen weighs on profit outlook Bloomberg - Are you a robot? via @markets

GPIF’s stock-heavy portfolio takes hit from Brexit turmoil - Nikkei Asian Review GPIF's stock-heavy portfolio takes hit from Brexit turmoil - Nikkei Asia

In the above article, GPIF stands for “Government Pension Investment Fund”.

Japan’s Delayed Tax Increase Shows ‘Abenomics’ Is Sputtering - WSJ

What Shinzo Abe calls “Abenomics” is dead. I am a little worrying about my pension.

“In London’s ultra-prime market, some agents were almost jubilant, saying that the pound’s steep fall against the dollar would bring international buyers to London”
Homebuyers wobble in wake of Brexit vote

If I were super-rich, I would buy a second house in London. I would buy a house near Freud Museum in Hampsted and talk with Dr Freud’s ghost about how he felt about Alfred Adler’s individual psychology, which is very popular now in Japan.

I find all those economists or pro-EU “elites” (I’m not talking about all the people who voted Remain) a bit pathetic. It seems the only thing they’re waiting for is the UK to collapse to tell everyone they were right. The same kind of people seemed to want to see Greece, Spain and Portugal go bankrupt with their apocalyptic theories.

The UK won’t die because it went out (well, it hasn’t yet) of the EU. There might be some damage at the beginning but in the long run I don’t think it’ll have a lot of consequences. Even if the other EU-members want to play tough now, a deal similar to the ones with Switzerland or Norway will eventually be done. What will make the UK’s economy successful or not are the decisions of its own politicians. Being in the EU doesn’t guarantee your economy will thrive. Italy, France and Germany are 3 big founding members of the EU, yet the first two aren’t in good shape. Would it be worse for any of them if they left? Tomorrow certainly, but within 20, 50 years who knows? They may adopt different strategies, start doing things differently, … we don’t know. Especially those economists who are full of theories but who failed to see the 2007 crisis.

To me, it’s all about “do you want to be part of the EU, do you feel European in the sense of being a member of the EU”. Even if some Brits do, we also know that others don’t and have never felt so. The economy thing is secondary and is more of an argument to scare people. At least I think that being in the EU should be more than a debate about economy. The UK has always seen the EU as a market before seeing it as a project. Well, maybe that’s why it’s time they leave.

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Forcasting is not easy. In some cases, you would see self-defeating prophecies.

I think that “Economics 101” is important not only for pro-EU supporters but also for Brexit supporters.
Priority should be put on reducing the damage caused by the referendum and political turmoil. “Austerity is dead.”

“In the long run we are all dead.” John Maynard Keynes
Read more at:

"Only a fool would try to predict today what Brexit will actually look like, or how the EU itself will function, in five or ten years’ time. "
"The most visible, and probably the most important, immediate economic casualty of Brexit, however, has been the value of sterling. "
“Foreign holidays have suddenly become more expensive. The price of booze and fuel – we import far more than we export of both – will go up. Remittances to families abroad will be worth considerably less.”
The short-term consequences of Brexit are severe – but financial disaster is not inevitable

Problem is, nobody - neither the pro-Brexit side nor the pro-EU side and the EU itself - seem to have thought that mayyyyybe, the Leave vote might win.

I’m not sure austerity is dead. As always our governments, even the IMF itself, are saying “we were wrong but this time we got the message, we have to change”… and then nothing happens. All the comments made by Hollande, Merkel or the EU lately on the Brexit and how it must be taken into account really remind me of the comments they’ve been making in France for a decade now after every election where the far-right gets high scores. It’s always “okay this time we must take it into account, we will do things differently, we have understand the people and its anger, blablabla…”. And the far-right keeps rising.

So my guess is austerity isn’t dead and euroscepticism isn’t either.

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