It's been another bad week for experts. Mark Carney, Bank of England boss, was described by Conservative MP Jacob Rees-Mogg as "a failed second-rate Canadian politician who is talking down the pound". That's the same Rees-Mogg who just led a failed coup against the prime minister. The same man who said recently: "I always play the ball, not the man."
For the record, Carney has never been a politician, has three degrees, one from Harvard and two from Oxford, and previously ran the Bank of Canada so successfully that the Canadian economy and banking system sailed through the global financial crisis of the last decade with barely a scratch.
The lowly status of experts and the associated disregard for facts is taking the UK into potentially crisis territory. We might be forgiven for thinking we are there already, but what could happen next is orders of magnitude more serious than anything we have seen so far.
There are many strands to this, not just the willingness of the double-breasted brigade to economise with the truth. The financial emasculation of traditional media in general and the political emasculation of the BBC in particular allows the great lies to go unchallenged.
It's such a shame that much of the economic analysis presented in the run-up to the Brexit referendum was politicised by the then chancellor George Osborne. By encouraging us to focus on forecasts of a recession, we lost sight of the wide range of scenarios published by the various agencies. Almost every one of those scenarios forecast that British economic growth would be lower than other countries, and there would be a gradual erosion of relative living standards. That's a harder message to sell than the "Britain to fall into a recession" headline. Few people, either in the media or the Cameron government, bothered to try.
There is a subtlety to the “lower relative economic growth story” that requires a bit of effort in terms of communication. Sexy it isn’t, so attention wandered to the more dramatic recession scenario.
But that basic story, gradually getting poorer relative to other economies, has proven to be spot on. It is exactly what has happened.
Various options
Rees-Mogg’s attacks on Carney were a response to the fact that the governor is at it again. Yet the British government mandated him to update his analysis in light of the various options that have emerged now that the withdrawal agreement is done.
The boffins at the UK central bank were asked to model various outcomes, including Theresa May’s deal. And they all say the same thing. The numbers vary, depending on the nature of Brexit, but they all point in one direction: relative impoverishment.
May is touring the country trying to sell her deal over the heads of the many MPs in her own party who appear committed to voting it down on December 11th. She has been forced to admit, through gritted teeth, that she is advocating a policy that will damage the economy.
One or two Brexiteers have had the grace to accept the economic consequences of Brexit, saying that the regaining of sovereignty is worth the financial cost. Most Brexiteers, by contrast, cheerfully rubbish the expert analysis, and claim that there is nothing to fear from any kind of Brexit, even the hardest one of all.
A faction in British politics thinks that crashing out in four months’ time without a deal is a great idea. Nineteenth century anarchists would recognise what these people are up to, but would think it weird that they are mostly members of a conservative party.
Some Brexiteers do believe that there will be an economic benefit from Brexit. Where these beliefs come from is one of the mysteries of the age.
Most Brexiteer analysis, such as it is, starts with “I believe”. And those beliefs are impervious to logic, facts or reason.
But there is something about that willingness to take massive risks with both the economy and political institutions that reminds me of the writings of the original anarchists. “Tear it down” is the philosophy, driven by the belief that what emerges will be both better than what came before and the associated price worth paying.
Uncomfortable facts
The unwillingness to pay attention to detail or face up to uncomfortable facts has led to one (at least) widespread belief that is dead wrong. Listen to any speech by a centrist MP, read most newspaper articles and you will, sooner or later, see or hear the phrase “hard Brexit can’t happen because the UK parliament will never vote for it”. That statement couldn’t be more wrong.
Just because they won’t vote for hard Brexit doesn’t mean it can’t happen. As a matter of EU law, the British can vote or not vote for whatever they like, but the rules are clear: the British triggered Article 50. So they leave on March 29th unless both the EU and London somehow agree to something different.
The only deal on the table, one that took over two years to conclude, is the withdrawal agreement. British MPs who vote against that deal are, for all practical and legal purposes, voting for a potentially unstoppable no-deal. Therein lies anarchy. Or, just possibly, that second referendum. Either way, the stakes couldn’t be higher – and the politics more sinister.
