Brexit Negotiations and 2017

EU FlagA chorus of commentators are telling us that it’ll be impossible for the UK to negotiate a free trade agreement with the EU in two years (once we’ve triggered Article 50), which means we’ll have to revert to WTO rules, and the subsequent tariffs will plunge us into an immediate, long-term recession. Not just a recession, but an out-right depression.

Are these commentators on to something? Is this likely? Before getting in to that, it might be worth noting that these are often the same people who told us that voting leave on June 23rd would result in an immediate recession. Remember that? Even if you do, they’ve forgotten.

The goalposts have moved. It’s now “economic Armageddon is still coming because of Brexit. But it hasn’t happened yet because Article 50 hasn’t been triggered.” Once Article 50 is triggered? It’ll be: “Okay, well, economic meltdown hasn’t taken place yet because we haven’t left.” Once we leave? Well, there will be more excuses.

At some point, given the ridiculous monetary policy of most western governments right now, there will also certainly be a global financial contraction. Maybe a big one. Maybe bigger than 2008. And when it happens – though Brexit is unlikely to be the culprit – you’ll be sure those same commentators will blame our decision on June 23rd this year.

Because of all of this, when I hear warnings of economic disaster due to us trading with the EU on WTO terms, I get sceptical. It’s the more of those same unqualified pronouncements that for some reason must be respected by virtue of the fact that they’ve been made. That makes no sense to me.

Right now, the chances of us getting a free trade deal sorted between March 31st 2017 and April 1st 2019 is about 50/50. If we had to do a deal from a standing start, I’d say we only have a 5% chance, given the EU’s awful history of this. But our terms are already active and in place. That should make it 99% certain that we’d secure a deal. But, the dead hand of the EU Commission and the other EU high-ups make it much harder than it should be. Though to be honest, don’t their petty hostilities right now justify our decision to leave?

And even if we do revert to WTO rules, will it really result in instant economic collapse? We pay £9.7 billion net into the EU a year. The tariffs (at current trading levels) are likely to be less than £3 billion a year for us. Much higher for the EU (we do have a massive trade deficit with the other 27 member states after all), but that’s just a good incentive for the 27 to strike a free trade deal with us.

But let’s end on a good note. The reason I think we’ve got at least a 50% chance of getting a deal in two years is the disconnect between the directly democratically-elected governments of the nation-states and the high-command in charge of the EU executives.

The EU guys talk tough because they don’t have to face a ballot box. But even the most sycophantically pro-EU governments in the 27 member-states are accountable. And if they push for rulings that make it harder and more expensive for, say, BMWs or French wine to be sold in the UK, their chances of re-election are, at least slightly more difficult.

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Trump Didn’t Win. Clinton Lost

US FlagTrump “isn’t my president”, as so many people say these days. And that’s right. Trump isn’t my president. He’s no one’s president. But neither was Obama. Or Clinton. Or either of the two Bush’s. No one who has presided in the oval office since my birth has been “my president.” Not just because I’m not an American citizen. It’s because that’s not how it works.

The president is the head of the executive branch of the US federal government. He or she isn’t the king of the country. They don’t ‘lead’ the people. The people are free. The president is a clerk, a civil servant. That’s all.

If there’s anything good that might come out of Trump’s presidency, it’s that people will once again find a more constitutional attitude to how American government works. Those on the right who turned a blind eye to presidential overreach under Bush II, and those on the left who stuck their fingers in their ears and shouted “la la la, not listening” when Obama was in office can now unite. They helped create the situation we find ourselves in. But now, it might not just be the libertarians calling the president’s overreach to account. Libertarians have been lonely for some time. Maybe now that will change?

Like most, I utterly failed to call this presidential race. Early on, I dismissed Trump as a ‘cartoon character’, thinking he’d never get anywhere. How wrong I was. How much did I overlook the mood of one of the world’s greatest people, in one of the world’s greatest countries? A great deal.

In the way that the world didn’t suddenly get better because Obama became president, and that Hillary Clinton wouldn’t have made the world magically better by being president, Trump won’t suddenly make the world horrifically worse. Will be violate the constitution? Yes. More than the others before him? More than HRC would have done? I’m not sure. But probably not.

I can’t help see the irony in the aftermath of the Trump victory. We were told – and I believed – that if Trump, say, won the popular vote but lost the electoral college, his supporters would take the the streets. They would riot. Police cars would be set on fire. There would be hatred. People calling the result ‘invalid’.

Look what happened when the opposite took place. I won’t say any more than that.

Delving into the stats, one thing is clear. Democratic supporters disliked Hillary Clinton more that Republicans disliked Trump. It was close either way, but she was the one that put most people off. Not because she was a woman. Around a million of them who would have voted for the Democrat went for Jill Stein this time around. About the same for Gary Johnson, who broke all Libertarian Party records with over three million votes, and breaking through the 5% barrier in several states. He wasn’t the spoiler though, a’la Ralph Nader in 2000. For every traditional Democrat vote he took, he got two Republican votes. And a large bulk of his were independents who wouldn’t have voted for either candidate any way.

Here’s the best illustration of how disliked Clinton was: of the 700+ counties that voted for Obama both times, over 200 of them voted for Trump. That’s what he needed, but it wasn’t a great result for him. Typically, to win he’d need to have gotten around 350 of those counties. But what helped him: Of the 2,000+ counties that didn’t vote for Obama either time, just three of them voted for Clinton. Three.

So if you’re not a fan of Trump, and you’re unhappy about what has happened this time around, maybe it’s worth thinking of it this way: Trump didn’t win. Clinton lost.

And be of good cheer. The world will carry on turning and getting better, whichever constitutionally-overstepping person sits in the oval office.

Out And Into The World

UK FlagWe actually did it. I was convinced for more than a year that the vote to leave the European Union would end up in a 60/40 result in favour of remaining. Once again, UK politics has confounded my expectations, and produced a result few predicted.

So what happens next? We have a new prime minister (in the form of Theresa May) and she’s stated that “Brexit means Brexit”, and has appointed serious “Brexiteers” to the task of negotiating our way out of the supranational entity.

But what exactly IS Brexit? It’s a negotiation that could have many different forms, so which is best?

I think the result probably helps inform this decision. People voted 52% for leaving the EU, and 48% against. A massive turnout with 17.5 million people voting to leave, in absolute terms that’s more people in the UK voting to leave than have voted on anything ever before.

But is it such an overwhelming majority that gives the government a huge mandate to pursue an aggressive and ambitious (and fast) Brexit? The numbers are large, but 52/48 is still pretty close. There’s a lot of people who bought into “project fear” and are deeply concerned about us leaving the EU. I think it’s important to bring those people on-side.
So Brexit absolutely means Brexit, but the closeness of the result should influence how we transition from being an EU member state to being an independent sovereign nation. It’ll take a little longer than a quick clean break, but it’ll be worth it in the long run.

In the medium-term, there will be a limited series of economic wobbles, but nothing on the scale that “project fear” was threatening. Already their big scary warnings are starting to look a little silly, (I thought they did anyway to be honest). The threatened “emergency budget” never happened, but the drop in the value of sterling and the short-lived dip in markets did shake some people up. They saw it as the beginning of the Brexit warnings coming true. The question is, how can the 52% bring the 48% on-board?

A decent suggestion would be to create a situation where they see what leaving looks like, dipping our toe into the wider world if you will. After that, moving further out would be easier.

An idea I had would be to start talking right away to the EFTA countries (Switzerland, Lichtenstein, Norway and Iceland), and secure our membership. It should be pretty straightforward. After all, it was the UK who created EFTA originally, as an alternative to the EEC.

Once a member of EFTA, we could leave the EU, retaining our membership of the EEA (European Economic Area). You don’t need to be an EU country to be party of the EEA, after all, Lichtenstein, Norway and Iceland are all EEA members (Switzerland has a series of bilateral deals with the EU that don’t require EEA membership).

As a non-EU EEA country, we retain tariff-free access to the single market on goods, services and capital. We could unilaterally invoke Article 112 of the EEA agreement to apply a handbrake on free movement (as it was an area of such concern for many who voted to leave). In return for an agreement of free-movement of people in the financial services sector, it might be easier to secure the so-called passporting rights to ply our lucrative financial services to the EU member states. And that means in return that Germany can make money selling us their cars, and France their cheese and wine. All tariff-free.

A couple of years of that arrangement, and I think two things would become clear to lots of the 48%: firstly, the free-trade deals forged with the rest of the world (that we can’t do while shackled to the EU) will become striking and valuable, with a strong possibility that we’ll get our self-confidence back. We may also end up thinking that these free trade deals are so good, that we couldn’t possibly entertain the idea of rejoining the EU and giving them up. There’s a whole world out there, and the possibilities surrounding rejoining it once out of the EU are too exciting to ignore.

Secondly, they will see, simply, that the sky did NOT fall in. Free trade continues with the EU states, and life goes on quite happily.

It’s from a position like that, that we can start to unpick the EEA agreements, and replace them with a series of bilateral agreements, Swiss-style. Plus, our current laws and regulations will remain on the books, each only being rejected and altered as and when we want to. That’s not so scary.

The future outside the EU is bright and full of promise. My sincere hope is that in time, even great swathes of the 48% get to see it too, once we’re out and into the world.

Gary Johnson Wants to Make America “Sane” Again

Gary JohnsonWhile the two main parties in the US go through their procedural requirements before officially giving their candidates Hillary Clinton and Donald Trump the nod, in a quiet corner of Orlando, the Libertarian Party have secured their presidential and VP nominations. Gary Johnson and Bill Weld will represent the party in this presidential election cycle.

It’s an interesting pick. The libertarians, maybe somewhat focused on the relative unpopularity of the Republican and Democrat choices on offer, have chosen pragmatism over purity. Gary Johnson almost certainly fails most libertarians’ “purity test”, but so what? Politics is the art of the possible, and if you vote for Ayn Rand to represent you, you’re going to end up spending most of the election cycle justifying why roads must be privatised, or some other ‘kooky’ side-issue. But picking Johnson and Weld, the LP have a real shot – even though the odds are still against it – of picking up more serious numbers this time around. Johnson could even end up being part of the presidential debates if he gets 15% recognition in a series of polls. He’s around the 10% mark with his name in at the moment. Again, it’s unlikely, but it could happen.

Let’s make this clear. There will be three serious names on the ballot in all 50 states this time around: Clinton, Trump and Johnson. Clinton and Trump are statistically the least popular picks in recent history. I couldn’t find a time in the last 50 years where the Democrat and Republican candidates both polled with less than 50% approval ratings.

Which leaves one question: how much approval would Gary Johnson get? He has a problem: people have to have heard of him first. But if there’s enough attention (and with both disenfranchised Reps and soon-to-be pissed-off Bernie voters looking for alternatives, that attention could well be on its way), then here’s a guy who arguably represents the mainstream view of most Americans.

I’ve felt for quite a while now that while there’s some die-hard ideologues on both the left and the right, broadly speaking the majority centre-ground in the US are people who are fiscally conservative (read ‘competent’), and socially liberal (read ‘tolerant’). That’s a fairly nice big-tent definition of a libertarian, but Americans haven’t been specifically looking for one before. Today, that could well change.

In the 2012 elections, Gary Johnson polled over a million votes. It was the largest raw numbers the Libertarian Party had ever seen, but was still only 1.2% of the vote, not even quite their highest level. The odds of Gary Johnson becoming the next president are very slim, but if he can push the needle far enough, then there’s every chance that libertarianism in mainstream American politics could flourish as a result of his run.

Gary Johnson is a libertarian. Weld is, arguably, a libertarian-leaning Republican. They may offer an optimistic insight into the future of the GOP. Let’s take Gary Johnson as an example. He’s a two-term Republican governor of New Mexico, in a state that’s 2:1 Democrat. How did he do it?

There’s no doubt that America is moving further and further away from the old socially conservative model that Republicans have hung their hats on for years. The times, they are a-changin’. And for a while now, the GOP has refused to move with it.

Lots of things can happen in the next few years to change that. However, it’s not totally unrealistic at this stage, to say that I can see a time in the next 20 years or so, where Republican presidential nominations are like, well, Republican gubernatorial nominations in a heavily-Democratic state like New Mexico. Gary Johnson came along, with lots of money (a successful self-made millionaire), and gave the GOP some money. They were grateful, but tried to steer him away from wanting to become the Republican nominee for governor. Despite that, they eventually picked him. After all, he had lots of energy and enthusiasm, and the rest of the field were going through the motions comparatively . After all, what’s the point? Republicans seldom win in a state that’s 2:1 Democrat.

Once he had that platform, he went full-blown libertarian, challenging the inconsistent positions of the incumbent Democratic governor. And people flocked to the idea. It was new, it was fresh, it was exciting. But more than that, it felt, it felt… right.

So he won. Became governor. Did everything he promised he would. He upset the Republican old-guard as much as the Democrats in that state. And once it came to the next election, he happily conducted dozens of debates with his challenger, and won with a bigger majority.

Imagine a time, not too far from now, where the whole US is like New Mexico. Majority Democrat. Picking a Republican candidate is not important any more, because those guys just don’t win any more.

So, just like in New Mexico, a younger, fresh-faced person wins the national GOP nomination on an energetic libertarian platform. He or she doesn’t get too much opposition from the GOP establishment because that establishment has shrivelled up. Then that libertarian pick gets to be on the main stage with the Democratic clone.

Then the future of American politics starts to get interesting. And, for this libertarian, a lot healthier too.

Donald Trump says he wants to “Make America Great Again”.

Gary Johnson says he wants to “Make American Sane Again”.

I think the two-term governor of New Mexico is on to something.

Apple, The Feds, and The Good Fight.

On Monday 21st of March, Apple gave a keynote presentation on some of their news products. We heard about the advancements and breakthroughs already bearing fruit in the HealthKit API’s (leading to a fascinating discovery that there are likely to be several strands of type-2 diabetes for example), plus announcements on a new iPhone, iPad Pro, and much more besides.

But many wondered if the CEO Tim Cook would address the elephant in the room. The companies’ on-going battle with the FBI over the phone previously owned by the San Bernardino terrorist.

Rather than shy away from the debate, Tim Cook dealt with it head-on and admirably. Since this talk, it appears the Federal government has backed down, but it doesn’t stop this from being an important issue. To his credit, Cook didn’t wallow in the message, but made his points and moved on. You can find out more in the keynote below:

For a more detailed look at his musings, check out the unedited transcript of his talk with Nancy Gibbs and Lev Grossman for Time Magazine, here.

In the interview, Cook makes many salient points. The excerpt below summarises the situation nicely:

But at the end of the day, we’re going to fight the good fight not only for our customers but for the country. We’re in this bizarre position where we’re defending the civil liberties of the country against the government. Who would have ever thought this would happen?

Cook might be bemused at the fact it’s up to a company like Apple to fight this “good fight”, but it’s quite typical for private business and individuals to be the ones that curb the excessive over-reach of government. In fact, that’s usually the default situation.

I understand perfectly the concern over our safety. But it is never good enough to give up essential liberties in order to give us some possible, abstract and temporary security. Now, it appears the FBI are backing down, and don’t think they need Apple to do anything to help. That’s great. But this is a fight that will need to continue.

It’s interesting – and anecdotal, with exceptions on both sides – that generally those who are technology literate (including Google, Facebook, Twitter, et al), support Apple’s stance, and those who are arguing in favour of the Federal government are typically not as technology literate.

I don’t know if this helps clarify things in a simpler away, but let me use an analogy to explain the situation that doesn’t bring technology into the debate at all: Imagine that there was a very slim chance that a now deceased terrorist might – and only might – have left some information about future plans behind a locked door. The FBI go to the lock-maker and demand that they build a universal key that not only unlocks that one door, but could unlock every door in the country. And then the key will be duplicated thousands of times and given to thousands of federal employees.

As yourself, in that scenario, are we really any safer if the lock-maker complies? Or will his compliance make us all less safe?

Answer that question honestly, and whichever conclusion you reach, I think you’ll figure out what side of the debate you’re on.

Our Future in Europe

EU FlagSo it begins. And continues. And continues. And on. And on. Over a hundred days of debates and rows have already started, with many more to come in the coming weeks and months. I would imagine that already, a lot of the public are already sick to death of the EU debate. But it’s easily one of the most important votes we have ever had, and time should be taken to think about what the implications are for all of us moving forward.

The BBC’s show Question Time has shown already the public demanding two contradictory things: they wish the fear-mongering (on both sides) would end, so they could just get “the facts”. But on the other hand, the “facts” are too dry and boring, and they want to be talked to in plain English.

I personally think you can only chose one of those things. You either want the facts – as best as they can be presented – or you want to be told opinions on general terms.

But either way, (and I’m putting this here for my reference as much as anything), here’s how things look as I see it right now:

  1. 3 million UK jobs depend on our trade with the EU. But that’s trade with the EU that those jobs depend on, not membership. There’s probably tens of thousands of jobs in the UK that depend on our trade with Hong Kong. No one is suggesting we form a union with them. Besides which, the other 27 member-states have some 6.5 million jobs between them that depend on trade with the U.K.  Will they put that at risk? Which leads me to…

  2. For every £3 worth of goods and services we trade to the EU, we buy £5 worth of goods and services from the other 27 member-states. If talk of a trade deficit is too “wonkish” for you, how about thinking about it like this: we’re basically the customer. Will the EU want a tariff-free trade deal with one of its biggest customers upon us leaving the current arrangement? Will it help Angela Merkel politically if she makes it harder for BMW and Mercedes to sell cars to us? Will Francois Hollande look good to the French people of he ignited a trade war stopping French cheese and wine making its way to British supermarkets?

  3. We aren’t voting on whether or not we leave Europe. Come June 24th, the tectonic plates won’t suddenly shift and push the UK out into the mid Atlantic somewhere. We’re voting on whether or not to leave the political union known as the EU. Including places like the Channel Islands, there’s 47 countries that can be described in some way as being in “Europe”. Two of them (Russia and Belarus) have no free trade agreement with the EU, choosing instead to form a pan-Asian trade block. The other 45, are part of the free trade area in some form or another (EFTA, the EEA, or members of the EU). There’s three layers to the European cake: 45 countries, of which 28 are members of the EU, or which 19 are members of the Eurozone. So 17 countries/states are in the outer layer (free trade and not part of the political union), 9 are in the middle layer (free trade AND political union) and the remaining 19 are in the inner-layer (free trade, political union and a single currency). The choice is not so much “leave” or “remain”, as it is “move to the outer layer” or “stay in the middle layer”. By and large, the inner layer does worse per capita than the middle layer, and the middle layer does generally worse per capita than the outer layer. Whether in the outer layer you think we’d also be strong enough like, say, Switzerland (as we have the 5th largest economy- set to take over Germany as the 4th in 2030 and Japan as the 3rd in 2045, with currently the 4th largest army, a head figure at NATO, the UN, WTO, whose language is the most widely spoken in the world, whose trading maritime and philosophical links exported around the world are one of the fundamental reasons for the decline in world poverty), is up to you.

  4. There is no vote on offer for the status quo.  Voting leave will mean we walk away from the union we’ve been part of since the early 1970s. But voting remain will be a vote to be part of a changing EU, which contains both David Cameron’s new reforms, but also changes that confirm the middle layer can’t impede the changes of the inner layer, which means that one way or another change is coming. The question is, what change do you want?

As I see it, those are the facts as they stand, stated as simply as possible. There’s benefits and costs to either decision. The real question we each have to consider, is which solution provides the best future for us?

Hillary Hiding Behind Trump

Hillary ClintonDonald Trump the Republican cartoon character Presidential Candidate is sucking all the air out of the current election race.

I can appreciate how frustrating that is for the other hopefuls. But one person who is probably quite grateful – for now – is Hillary Clinton.

Arguably the worst thing about Donald Trump’s presidential circus act is that he’s successfully stopped political commentators and journalists spending any serious time looking at what Hillary Clinton would be like as a president. This is especially odd, given that the polls make her the most likely to take the top job, compared to anyone else currently in the running.

Many people will vote for Clinton simply to be a part of history. I totally get that. A woman president has been far-too long coming. But isn’t it a little patronising, and even maybe sexist, to vote for someone just because she’s a woman? That doesn’t feel like it’s striking a blow for feminism, as much as striking a blow against it, to me.

I’d like a female president. But I’d like one who really deserves to be there, who’s been put through the ringer, and really tested.

So far Clinton appears to have side-stepped this process. She’s been allowed to get away with quite a bit as a result. We’re talking about a person who has still – to the best of my knowledge – refused to acknowledge that she used a ghostwriter to write those weekly newspaper columns and bestsellers of hers. She’s yet to explain her lying about being shot at in Bosnia, or discussing ways to beat Barack Obama in the 2008 Democratic primaries, using Bobby Kennedy’s assassination as a similar scenario to the fight she was having (serious, what was that about?)

There’s lots of other little lies too. Not just the ghostwriting, but how broke she was upon leaving the White House with her husband (nope), how her daughter was jogging near the World Trade Centre on September 11, 2001 (she wasn’t), how she was named after Sir Edmund Hillary, the heroic conqueror of Mount Everest (she wasn’t. Sir Edmund made the climb in 1953. Hillary Clinton was born in 1947).

But that’s just small stuff right? The tittle-tattle that tabloid journalists care about. Okay, I get that. The odd forgetful moment or little white lie I understand. We’ve all done it. Okay, so maybe not to this level, but we’ve all done it. Let’s look instead at her policy record:

As a Senator of New York, she was a loud, and unashamedly vocal supporter of TARP, the disastrous and economically-illiterate Troubled Asset Relief Program. And let’s not dwell too much on the equally damaging ethanol subsidies, auto bailouts, etc. It’s also interesting how we’ve all forgotten about her proudly declaring herself as the “representative of Wall Street” during her time as Senator. A declaration now oddly ignored by the Occupy crowd.

What trade agreements does she support and which is she against this week? With the flip-flopping, it’s hard to a) keep track, and b) understand what economic principles – if any – she really believes in.

Many wise heads warn that we’re looking at the possibility of another economic dip at some point soon. Will her proposed federal “infrastructure bank” (at a cost of $250 billion) really help us out in a time when we’re trying to live within our means? Hasn’t the weapons-grade failure of bailouts and shovel-ready projects got back to her yet?

She basically sided with Bush Jr and Cheney when it came to Iraq. In fact, she was arguably more hawkish than either of them when it came to linking Saddam to Al Qaeda. Her position on the failure was simply to flip-flop (again) and say that Bush didn’t pursue diplomatic avenues enough. Okay, but she specifically voted against the amendment that would have forced Bush to explore more diplomatic avenues before the invasion began. But, she seems to have been given a free pass on having her cake and eating it too.

I won’t dwell on Benghazi or the potentially federal-grade offences she may have committed with sensitive government emails, those are areas that’ve been well covered at least. Except to say that she still seems to have had a free pass on them. But let’s talk Libya. Anyone who has been concerned with Bush and Obama’s hyper-interventionism can’t help be a little concerned by her actions there, least of all referencing Moammar Gaddafi being disposed as “We came, we saw, he died”, (while laughing).

ISIS are reportedly using the areas she intervened as Secretary of State. It still hasn’t stopped her describing that unstable mess as an effective use of American “smart power”.

Clinton is a full-blown supporter of George W. Bush’s Patriot Act, and continues to wrongly describe Edward Snowden as a man who could have “gotten all the protections of a whistleblower”. That’s flat-out wrong. The rules – that Clinton fully supports – makes it currently impossible for someone in Snowden’s position to be a whistleblower. The “proper channels” she says he should have used are explicitly denied to employees in national security positions like Snowden.

In the social sphere, she’s against legalising marijuana for recreational purposes (but the states appear to be moving ahead anyway), she’s flip-flopped (there’s that phrase again) on gay marriage, only finally supporting it when it was clear most Americans now do. Also in a similar vein, only when the polls showed that people were turned off en-mass at Trump’s harsh treatment of illegal immigrants, did she change her position. But she still doesn’t fully support free speech, supported by the 1st Amendment, advocating a change to the US Constitution to limit what she worryingly describes as “unaccountable” political speech, and pushing for more governmental “backdoors” to our private data.

This is just a short list of things we haven’t talked about when it comes to Hillary. It might turn out that by the time of this year’s election, she really is the best of a bad bunch. But if that is the case, I can’t help feel that’s a depressing choice.

I’d love there to be a female US president. But I’d especially love there to be a good one.