Wednesday, 25 May 2016

Simon Jenkins: Why Brexit economic forecasts are specious

I have a good deal of time for the IFS and yes, I know how much EU funding they get. I'm not accusing them of corrupt practice or of distorting evidence. The fact is, one can find economic evidence that supports just about whatever hypothesis one can dream of. Sun-spots and the price of oranges? Done. Tie-width and hysteresis-driven efficiencies in the financial markets? Done. All IFS have done is take the Remainian assumptions from loads of other studies and apply them to a hypothetical scenario that probably only considers about 4% of the correlative factors it should do. Still, don't take my word for it - Simon Jenkins has it nailed in the Standard.
The Treasury has, for the duration of the referendum campaign, switched from being a respected economic institution to being a lobbyist for Project Fear. Its notorious apocalypse algorithm looked like a schoolboy spoof, with its subscripts and squiggles “proving” Brexit would cost every household £4,300. (Didn’t the Treasury once prove that EU regulation cost households virtually the same?) 

The Treasury thesis appears to be that the shock of Brexit would make Londoners poorer, interest rates higher and deter immigrants and rich foreigners from buying or renting houses in the capital. Prices would therefore fall. That is certainly plausible. Whether this would be a “shock” scenario for most Londoners is surely moot.

We are now entering a world in which economists simply seek predictions to support prejudices. The Treasury assumes that Brexit would lead to a fall in the pound. But surely that would make houses cheaper for foreigners to buy and push at least some prices back up? Why does Osborne not warn of a Brexit “soaring house price shock”?
In particular, he dismisses Osborne's claim that London house prices would fall by 20%
These imponderables are clearly too great for any sensible person — but not apparently today’s highly politicised Treasury. The wisest remark perhaps comes from Johnny Morris of the estate agent Countrywide, who says simply: “Brexit would be an unprecedented turn of events, with a wide range of possible outcomes.” That is economist-speak for “no one has a clue”. 
So, everyone from blokes in the saloon bar to social commentators have worked out that these economic forecasts are Drek. Let's admit we simply don't know what Brexit would bring - but we can cope with it. In any case, the argument for Brexit is not economic but moral; it is cowardly, unpatriotic and immoral to allow British sovereignty to be stolen by a cohort of profoundly anti-democratic and unelected EU officials. This is about Freedom, not geld.

12 comments:

mikebravo said...

The cameron, osborne machine is just churning out shite - like a muckspreader. They know that some of it will stick.

They have done their surveys of what concerns and scares people most and are just going through the list and making up matching horror stories stories.

1. Mortgage rate rises - Brexit = rate rises.
2. Loss of job - Brexit will loose millions of jobs.
3. War - Brexit brings WW3.

What I want to know is when does the purdah rule kick in. When do they have to stop the endless propaganda and lies?

Poisonedchalice said...

I have always said that this is about us and them; us being the man in the street and them being the political gobshites who want to remove all vestiges of our democracy.

Coney Island

Poisonedchalice said...

By the way, they should be called "Remainiacs" rather than "Remainians".

Coney Island

Apparently said...

Actually we have a pretty good idea what Brexit will do...

There are around 170 countries that aren't in the EU, and only the ones with similar dictatorships to the EU are doing badly. North Korea, Cuba, Zimbabwe etc..

...the rest are doing just fine...

The very best have very small government and low taxes.

Perhaps we should find a good place for the Westminster politicians after the brexit...

What about a very secure, soundproofed cabinet?

Dioclese said...

Why don't we all just admit that economically nobody knows twat would happen if we leave - or if we stay for that matter.

It's about democracy, migration and making our own laws as far as I'm concerned

Sackerson said...

Those whose principles are rooted in considerations of "geld" should, perhaps, be called "geldings": has that Anglo-Saxon twang, doesn't it?

Gordon the Fence Post Tortoise said...

A perusal of the Treasury's antics in the crash of 2008 where they did a complete 180 - the web site was almost entirely re-jigged to reflect sage prescience about the events whereas before it was house prices will go up for another 10 years boom, boom, blah, blah, blah.

Even Broon joined in removing his "no more boom and bust" speech from the Chancellors speech recordings.

The Sages of Threadneedle St. ? phew....

DeeDee99 said...

I keep writing in the comment pages of the newspapers that this is about Sovereignty and Democracy - not trade.

However, all the hysterical doom-laden predictions by the Remain campaign are treated like the Word of God by the BBC and other broadcasters.

James Higham said...

Also, Google is heavily Remain.

Weekend Yachtsman said...

"In any case, the argument for Brexit is not economic but moral; it is cowardly, unpatriotic and immoral to allow British sovereignty to be stolen by a cohort of profoundly anti-democratic and unelected EU officials"

Hear! Hear!

Sackerson said...

What Weekend Yachtsman said.

RandomAnonymousCrank said...

Agree with your article, and ............

"I'm not accusing them of corrupt practice or of distorting evidence. The fact is, one can find economic evidence that supports just about whatever hypothesis one can dream of. Sun-spots and the price of oranges? Done. Tie-width and hysteresis-driven efficiencies in the financial markets? Done. All IFS have done is take the Remainian assumptions from loads of other studies and apply them to a hypothetical scenario "

Does this sort of tactic remind you of anything? The first thing that popped up in my mind was the sort of scaremongering and manipulation that the global warming crowd uses to push their agenda.