The EU
Scam is exposed.
Brexit
Fears Weren't Overblown -- They Were Flat-Out Wrong, 8/22/16, IBD
Sovereignty: It's hard to remember,
but in the run-up and immediate aftermath of Britain's Brexit vote on June 23,
the prophets of doom were everywhere. They predicted everything from an end to
London as a financial capital to the meltdown of the British economy to a disaster
for the U.S. Sorry, didn't happen.
Yes, here in the U.S. the stock market sold off immediately
after Brexit, just as the doom-and-gloomers predicted. But then something funny
happened: The markets snapped smartly back, with the benchmark S&P 500 Index
up almost 3% since the day of the vote.
As for Britain, the predicted disaster never occurred. As Britain's Express wrote in a Wednesday
headline:
"Remainers were WRONG! Wages up and unemployment down as Brexit Britain
booms".
That's no exaggeration. One of the great fears was that not only
would Brexit be bad for the economy after the vote, but would materially weaken
it even before the vote was held by undermining investor and consumer
confidence.
Didn't happen. The online Express, citing new government data,
reports that unemployment plunged 52,000 between April and June, leaving the
unemployment rate at 4.9% -- the lowest level since 2005. The total employment
rate now stands at 74.5% of the population -- the highest ever.
Meanwhile, the number of unemployment claims dropped 8,600 in
July -- the month after the Brexit vote -- to 768,600, the first decline since
February.
Oh yes, and workers' average earnings jumped 2.4% in the first
six months of the year, showing that if businesses were worried about Brexit,
it sure wasn't showing in how much they were paying workers.
No question, fears were exaggerated. So many people had so much
emotion tied up in the idea of the European Union not only staying together,
but expanding beyond its current 28 nations, that they couldn't imagine that
one of its linchpins -- Britain -- might actually leave.
Moreover, they completely misunderstood the benefits of
belonging to the EU. Sure, free trade is great, but Britain can have all the
free trade it wants with any country now -- unhindered by a gazillion
regulations and rules imposed on it by bureaucrats in Brussels and Luxembourg.
The truth is, this was never about economics. Once it leaves in
2018 or 2019, Britain's economy won't disappear and, in fact, will likely
thrive, despite leaving the EU. This was always about one thing, really:
Sovereignty.
"The EU has acquired, one by one, the attributes and
trappings of nationhood: a president and a foreign minister, citizenship and a
passport, treaty-making powers, a criminal justice system, a written
constitution, a flag and a national anthem," wrote Daniel Hannan, a British member of
the EU parliament and leading Euroskeptic, earlier this summer. "It is these
things that Leavers object to, not the commerce and cooperation that we would
continue to enjoy, as every neighboring country does."
Could something bad happen between now and the time that Britain
decides to leave? You bet. That includes here in the U.S.
For instance, in remarks this summer, Fed Chairman Janet Yellen
and other central bank officials made it abundantly clear that she is concerned
about the impact that Brexit would have on the global economy and on financial
markets, and that it would be part of her calculus in deciding whether to raise
rates or not.
So, like it or not, Brexit can have an economic impact on us.
But by and large, that impact is far more likely to be favorable, not
unfavorable.
As for the EU itself, it will come under increasing pressure to
either reform itself, or face further membership defections like Britain's.
After threatening Britain with trade and other sanctions for leaving, on
Wednesday the EU said it plans to offer Britain "special status" when
it leaves. So much for punishment.
Clearly, the Eurocrats in charge of the EU are running scared.
"Given the complex history of Europe's nation states, it seems likely than
an EU that acts as a competition-stifling cartel will grow increasingly
unpopular, and more countries will leave it," wrote former Chairman of the
President's Council of Economic Advisers R. Glenn Hubbard and American
Enterprise Institute economist Kevin Hassett in a July commentary.
Countries in the EU have lived with a demographic death spiral,
out of control spending and debt, absurd regulations that enrich no one and a
regional economy that, as hard as it may be to believe, grows even more slowly
than ours. From 2008, the peak year of the financial crisis, through 2015, EU
GDP grew 2%, according to U.S. government data. No, that's not 2% a year -- 2% total. It's been an utter
disaster, and the EU's clueless bureaucrats seem helpless to do anything about
it other than blaming their own citizens.
Britain saved itself from decades of stagnation and decline by
Brexiting the EU. As such, Britain may have given the other troubled members of
the EU the greatest gift of all -- a way to leave the dysfunctional EU and
rediscover their lost sovereignty and growth.
http://www.investors.com/politics/editorials/no-brexit-fears-werent-overblown-they-were-flat-out-wrong/
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