Brexit

[Slobodan Blagojevic]

... Here's UK per capita GDP minus the average of France, Italy and Germany since the late 50's:

Nice going, Manoli! 

You re-post a chart I already posted in the reply #773 (page 39), but without the crucial counterpoint from the same article:

But, because it is so difficult to distinguish a causal link from a mere correlation, the UK’s post-1973 rebound does not itself definitively establish that EU membership has made the country more productive — the fundamental issue at stake. Ruth Lea, economic adviser to Arbuthnot Securities, a private bank, says the leading cause of its reversal in fortunes was in fact “a certain lady from Finchley” — the late Margaret Thatcher, who privatised state-owned companies, took on the unions and deregulated the City of London.

[Slobodan Blagojevic]

...I think we should let Slobodan clarify his point...

Only necessary if you didn't read the whole paragraph I wrote, in particular this part:

It is the illegal immigration (or legal, in the EU case) that provides a labor force willing to undermine the equilibrium wage.

[stamper]

I suppose that part of the problem is that no politician wants to confess that, in the end, there's safety in mumbers. Most seem to want to pretend that their country can do everything by itself. Not so, I'm afraid.

Every country can be a niche player, if it's small enough, but Britain is not. The same holds in business: I never wanted to become an employer of photographers or of anyone else. As consequence, I sort of turned myself, much by design and hope, but also just as much by circumstance, into a unique kind of player: I ended up doing pretty much what I wanted to do and very little else. The other studios in my area could not go there: they had to have continuity of work just to pay staff, where I did not. It was an intention, at first, but also became a sort of trap. But I did outlast several of the big setups. However, for a country, I see it as too risky a ploy. And especially now, in the face of a shrinking world ever more global in its concepts.

Rob

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[Slobodan Blagojevic]

There may be little incentive to work if you can live on welfare programs...

Open borders and welfare programs are parts of the same political doctrine.

[Rob C]

?

Translation: glaucoma; dyslexia of the fingers. A deadly combination.

You should see the unedited orginals. No wonder I post so little. The work...

Rob C

[Alan Klein]

As an economist, I can tell you that's an economic nonsense. There are no such jobs that Brits (or Americans) won't do. There are jobs that they won't do at the offered wage, which is a different matter. A simple economic solution is to increase the wage until supply meets demand. It is the illegal immigration (or legal, in the EU case) that provides a labor force willing to undermine the equilibrium wage. And the lowering tide lowers all boats, hence the decline of the middle class.

Slobodan.  It's the bolder sentence that I don't understand.  Could you clarify what you meant?

[Slobodan Blagojevic]

Slobodan.  It's the bolder sentence that I don't understand.  Could you clarify what you meant?

You said it yourself, even acknowledged I stated it as well:

Then employers have to raise wages.  Citizens will then take the higher paying jobs in that case as you did state.

There is no disagreement between you and me that the unchecked immigration (illegal in the US, and legal in EU) is the cause of low wages.

[Alan Klein]

OK I won't belabor the point, but it's not clear.  On a separate issue, wages are also low because the economy stinks.  We wouldn't be talking about these things if the economy was booming.  Everyone would be finding good jobs for the most part and people wouldn't care what's happening with immigrants or anyone else.  Wages would be higher for "minimum" wage people as well.  The problem is our government are screwing up the economy with inflation (printing), high taxes and regulation. 

[Slobodan Blagojevic]

... On a separate issue, wages are also low because the economy stinks...

It is a chicken and egg problem. There are many causes for low wages and why the economy might stink, but to stick to the subject (which is the impact of unchecked immigration on wages and economy): wages are not just a cost for employers, they are also a source of income for consumers. When wages go down, consumers spend less, which is one of the reasons economy "stinks." In other words, by keeping the wages low, employers are cutting the very branch they are sitting on, i.e., demand for their products.

Another impact of unchecked immigration: in contrast to citizens, whose wages, even when low, are spent in the same economy, a significant amount of (unchecked) immigrant wages are syphoned out of the country (as remittances to families back home). No wonder emigrant remittances are the single biggest source of revenue for Mexico.

[Manoli]

The UK’s Supreme Court said on Tuesday it has received the government’s appeal against last week’s Article 50 ruling and the case will be heard in early December.

The Supreme Court has now confirmed the appeal will be heard over four days starting December 5 although the exact number of hearing days will depend on further submissions received from the parties and the legal arguments to be considered.

As expected, all 11 Supreme Court justices will sit to decide the case – this reflects the constitutional importance of the case as previously the largest Supreme Court panel to hear a case has consisted of nine justices. The court proceedings are set to be streamed via live video link.

The ruling is expected to be reserved at the end of the hearing and will be given at a later date – probably in the New Year.

[Manoli]

Slobodan - I hadn't seen your post nor the attachment, but anyway my counterpoint isn't related to EU, non-EU benefits but market related economics.

There used to be a long standing joke in the UK ;
how many people does it take to change a light bulb?
Answer: 5,
one to hold the bulb, another to unscrew the old one, a third to operate the mains switch ...etc

'equilibrium v market economics'.

One other point: Ruth Lea's comments though true, don't paint the whole picture. In the early 80's Thatcher was facing declining popularity and heading for electoral defeat. Then the Falklands occurred. The rest as they say is history.

At the time, the most fundamental reason for UK resurgence, wasn't Thatcher but that the Americans ' threw ' the mighty $US$, as it approached parity with sterling. Look at a chart of GDP output, UK v France, Thatcher v Mitterand, right wing v left, and you'll see France consistently outpace the UK throught the period.

It was the economic benefit of the US actions that gave Thatcher the economic strength to force through her structural reforms. I make no comment on the social cost.
.

[drmike]

I'm 64 years old and I have never heard that joke told by the British about the British. We might tell it using other nations but not the British. I am happy to be corrected and we did have our problems but not as I recall that joke.

[Manoli]

drmike - I did say IN the UK, not only about the UK. Though in the early Maggie years I heard it more than on the odd-occasion, in a period when our heavy industry was in decline, automotive engineering and ship building in the North-East being two early victims of an 'entrenched' mindset, not to mention some of the others.

And if there's one characteristic British humour is famous for, it's self-deprecation - though this was much more a lament than a 'joke' - at least in the context I heard it.

[drmike]

I'm sorry I misunderstood 'There used to be a long standing joke in the UK ; ' I incorrectly assumed it was being applied to British workers.

[Rob C]

I'm sorry I misunderstood 'There used to be a long standing joke in the UK ; ' I incorrectly assumed it was being applied to British workers.

If you ever employed one to do something in your house, you'd have noted on the invoice (if you were old-fashioned enough to work that way), the added hit for assistant, apprentice, or whatever the gofer was called.

Happens here in Mallorca too. He usually stands around in a deep dream, coming to life to pick his teeth or to wander back and forth from the van with bits of pipe or tools... I wonder if he ever gets to do anything about plumbing or electricity, or whether the job to which he appears vaguely related isn't, and he is expected to be a gofer forever?

I guess the joke applies universally, and would be funny if it were not being so expensive as one laughs.

Rob

[pegelli]

I do remember that when British Rail went from steam engines (needing a driver and a fireman) to diesel engines (only needing a driver) that the unions were successful for some time to force British Rail to have two people man the diesel cab, in order to "protect" jobs. So maybe that joke had some truth for UK workers as well.

[Zorki5]

http://www.euronews.com/2016/11/09/what-does-a-trump-presidency-mean-for-europe

The election of Trump, who backed Brexit, could play into the hands of the UK. The billionaire’s trade advisor was quoted last month as saying ‘Britain would be offered a free trade deal before the rest of the European Union’.

[stamper]

Too early to believe promises? The election promises were all hot air.

[Zorki5]

Too early to believe promises? The election promises were all hot air.

Sure. Just stating the obvious: everything is not B&W. No-one knows what the future holds.

[Alan Klein]

The election of Trump, who backed Brexit, could play into the hands of the UK. The billionaire’s trade advisor was quoted last month as saying ‘Britain would be offered a free trade deal before the rest of the European Union’.

Why would Trump set up a trade deal with another country that will add huge excise taxes (import duties) on American goods when America won't do the same to British exports to America?  He's against unfair trade deals that punishes American exports. That's what he's campaigned on.   Would Britain change their ways and eliminate import taxes so we can have bi-lateral fairness?