Brexit Fear-Mongers Lied

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/