Rule, Britannia

Nelson Fraser, editor of the Spectator, had a nice op-ed in the Wall Street Journal yesterday. He points out that none of the calamities forecast from Brexit have come to pass. Quite the opposite, employment is up, consumer spending and confidence is up, GDP is up. The political elite had determined that Brexit was a bad thing and therefore it would have terrific consequences.

Fraser doesn't let them off the hook: "How could so many great minds get it so wrong? It is a case study of unconscious bias in forecasts. Too many economists assumed that the public would react to a Brexit vote in the same way that they themselves would: Run for the hills and wait for the sky to fall. So they made guesses—about consumer spending, investment, productivity—and entered them into computer models that came up with nonsense figures."

In particular, the resilience of London as a financial center has confuted the prophets of doom. Fraser has some good zingers. "What’s the point of earning more money in Frankfurt if you have to spend it in Frankfurt? London’s advantages—the time zone, the language, its fintech pre-eminence, the financial ecosystem—are still very much in place. Its biggest rivals are Hong Kong, New York and Singapore, all of which manage just fine outside the EU." London was a great financial center long before the EU and will be one long after.

It's just another reminder how thoughtless and shallow most political rhetoric is. The media are at fault, too, but they are only taking their cue from the sources who by now know how to manipulate them for their own agenda.