Opinion – The Macroeconomics of Brexit: Motivated Reasoning? – Paul Krugman – The New York Times

Nobel Prize winning economist, Paul Krugman, in his NYT op-ed blog accuses the economics profession of over sexing fears of post Brexit referendum  short-term consequences. He argues that sloppy thinking is always a vice.

Source: The Macroeconomics of Brexit: Motivated Reasoning? – The New York Times

To be absolutely clear, Krugman confirmed that the long run economic consequences of Brexit are massively damaging. Because of the loss of trade, he expects an output loss of 2-3% in perpetuity. This is a truly staggering loss of UK wealth (see earlier blog).

However, Krugman argues strongly that the short/medium term consequences have been seriously overstated by the economics profession and are not based upon sound economic theory. This is significant because politicians, like former UK Chancellor, George Osborne, hyped up the consequences of Brexit.

Regular readers of this blog will know that I campaigned passionately for Remain. But I’m a realist. I’m beginning to adjust to a post-Brexit world.

But it’s not just about the trade and immigration deal that the UK strikes with the EU and other countries.

It’s very much about other radical policy changes in post-Brexit Britain. The UK must pay for the permanent loss of output amounting to 2-3% in perpetuity. How this is achieved deserves some serious analysis and debate. Here are a few straw-man suggestions:

  • Radical change to public services at both the national and local level
  • Higher national productivity
  • Far greater innovation
  • Increased exports
  • Massive increase in skills
  • Reduced energy consumption
  • Reduced waste
  • Reduced population, e.g. export people/ lower immigration
  • Reintroduction of national service




Opinion – Study finds NHS ‘MOT’ health checks to reveal signs of illness have few benefits | Health News | Lifestyle | The Independent – John Gelmini

NHS Job Shop: "Working for Health" i...

NHS Job Shop: “Working for Health” in Kentish Town. Closed. (Photo credit: Wikipedia)

English: East Midlands Ambulance Service NHS Trust

English: East Midlands Ambulance Service NHS Trust (Photo credit: Wikipedia)

Dr Alf, in this piece from the Independent, gives us an interesting take on the NHS which I agree with him, needs to be replaced with something that is fit for purpose.

The Daily Express tries to argue that remaining in the EU followed by TTIP will cause the NHS to be privatised.

I think that both the Independent and the Daily Express are incorrect on this matter; the NHS is already £20 billion GBP in the red, as Stuart Steven its Chief Executive knew last year when he went cap in hand to Cameron and Osborne asking for £16 billion GBP. They sent him packing but did agree £8 billion GBP whilst telling him to find the rest from efficiency savings. As usual they “rolled over” when they were faced with Steven’s special pleading rather than telling him to start reforming.

The Junior doctors saw this and have been emboldened to intensify their strike action to include emergency cover – this is an act which is against the Hippocratic oath and represents industrial misconduct in my view. Jeremy Hunt needs to conscript former military doctors and fire the junior doctors en mass as Ronald Reagan did with the air traffic controllers in America and then he and the Transport Minister needs to take on the public sector trades unions with de-recognition, a switch to automated tube trains and a law to outlaw strikes in essential public services (transport, teaching, nursing, medicine, radiology, surgery as initial examples).

At this stage in the political process the gains made by Margaret Thatcher’s Trades Union reforms need to be built on, not thrown away.

Whether we remain in the EU or leave it NHS reform is essential as is welfare reform, especially of Personal Independence Benefit rules, which are riddled with fraud, plus the need to merge costly Adult Social Care into the NHS.

None of this is a “Bridge too far” but it is clear that in his last days David Cameron wants to ease his way into his new job with as little trouble as possible so that his protege and fellow Bilderberger, George Osborne can similarly ease himself into the Prime Ministership.

Closer to 2020, this sort of action will be impossible, but now, it is not only possible but vitally essential for the good of the country.

John Gelmini