Exit Brexit

by: Laurence Kotlikoff


The folly of Brexit is hard to overstate. Its enactment will produce long-term economic decline.

The Brexit vote was an opinion poll, not an act of Parliament.

More Brits now want to stay in the EU than leave.

Theresa May must exit Brexit.

Britain's non-binding resolution, to leave the EU (aka Brexit) is moving forward because one weak-willed and weak-minded politician, UK Prime Minister Theresa May, is treating the 2016 opinion poll as legally binding. It wasn't and isn't.

Anyone who has seriously studied economics knows that free trade is essential to economic welfare and growth. Nevertheless, May is now actively orchestrating the UK's long-term economic decline. Leaving the EU will leave the island nation facing tariffs from its largest trading partner (the non-UK EU) and at the economic mercy of the United States, whose leader treats the UK with utter disdain.

Churchill said, "Courage is what it takes to sit down and listen." Theresa May needs to sit down and listen - not to her political base, not to her political advisers, not to her PR consultants, but to the world's top economists as well as to the British public.

The Brexit June 23, 2016 Brexit poll is not the only poll to be considered. May should poll the world's Nobel Laureates in economics. I predict that each would advise remaining in the EU. May should also poll the economists in every top economics department around the world. Again, I predict overwhelming support for remaining in the EU. Let her also poll the top UK economists. They will repeat, what they said back in 2016, namely that Brexit is a terrible mistake. And let May consult the latest poll of the British public. It shows more Brits favoring staying in the EU than leaving.

People change their minds. Within a month of Brexit's vote, more Brits said they wanted to stay in the EU than leave. Prime Ministers can also change their minds. If May cared about her country as opposed to her career she would exit Brexit. At a minimum, she should put the final deal up for public vote and see if the Brexit that is, not the Brexit that might have been, truly meets public approval.

The folly of Brexit is hard to overstate. The UK is physically and economically smaller than California. Imagine California leaving the U.S. and taking its massive federal tax revenue with it. Short of invading the Golden State, the federal government would put up tariffs to make California pay for leaving the club while still enjoying most of the benefits of club membership, including the U.S. military's nuclear umbrella.

To enforce their tariffs, the Non-Golden States would need to close the border. People would have to choose to be Californian or Non-Golden citizens. California would, of course, need to worry about defending itself against the Non-Goldens and be forced to establish its own Navy, Army, Air Force and Space Brigade. It would have trouble striking trade deals with other countries who would fear the wrath of the Non-Goldens. The Non-Goldens might even limit air rights for flights emanating from California. They could also start to inspect cars, trains and buses at the boarder. And they would likely require the Goldens to get visas to travel to Non-Golden states. The Non-Goldens might even force people born in California to return to California. The reason? Those born in California are far too happy to be human.

Of course, many Californians would dearly love to free themselves of their countrymen. No more Texans with their strange hats, pointy shoes, and pushy ways. No more East Coasters looking down their noses. No more Southerners waving Confederate flags. No more immigrants from places like Kansas, where there are surely gangs. With time, the Californias might wall up their border. Why? Because.

The rallying cry for the Californian separatists would surely be End Colonial Rule! This is what Boris Johnson, the Brexit cheerleader, former Major of London and former Foreign Secretary, claimed Britain had become - an EU colony. Boris was right. It is, until it leaves, an EU-colony, as are all the other EU member states.

But being a colony comes with privileges. Johnson must have realized this when he was London's mayor. Not once did he point out that London was a colony of the UK. Not once did he publicly pine for the glory days of 61 AD when Queen Boudicca freed London of the Romans. And what glorious days they were. London could call its own shots. It could build its own wall, which it certainly did.

Here's the thing. The UK is no longer the British Empire. It's a minor country with less than 3 percent of global GDP. By century's end it will account for barely 1 percent of world GDP. Today's London has close to 1 percent of world GDP. If the UK is so keen on calling its own shots forever more, including in 2100, when it will be even more of a global pipsqueak than it now is, London should declare its independence as well. It's the same size pipsqueak in today's world as it colonial master will be in eight short decades. Since Boris is now unemployed, he might stop being a traitor to his country, London, and do what's right - campaign for a referendum on London's independence. He can grow his golden locks, dress up like Boudicca, and sound her rallying cry - "avenging lost freedom."

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.