Sunday, June 26, 2016

Trump's Economic Adviser On Brexit

Larry Kudlow is pretty good here:
Britain will regain its political freedom, its autonomous self-government, and its independence from an European Union that is spinning out of control under the power of establishment elites, unelected and unaccountable socialist bureaucrats, and a court that is increasingly making legal decisions that replace Britain's powerful common law.

The EU's tax and regulatory policies, climate-change and welfare spending, and free immigration even in wartime are gradually ruining Europe. That's why I believe Brexit is good for British freedom, political autonomy, and the survival of democratic capitalism.

The business elites told British voters that leaving the EU would lead to economic catastrophe. Well, in England, Main Street defeated the establishment elites by sending a populist message.

And there need be no economic catastrophe. The EU needs Britain more than Britain needs the EU. The London Stock Exchange is one of the most powerful financial centers in the world. Frankfurt will never replace it.

Trade is the key to the economic outlook in Britain and the EU. Many corporate chieftains joined large bank chief executives and the fear-mongering International Monetary Fund to suggest that the EU will deal harshly with Britain if it leaves and stop all trade. That's mutually assured destruction – MAD. A tariff-driven trade war would destroy both power centers.

Not only does the EU need Britain's financial capabilities, Britain itself is major importer of EU goods and services. If sanity prevails, there's no reason why the EU and Britain can't hammer out a free-trade agreement in the two years allotted by the Lisbon Treaty.

And if the EU wants to go with MAD, the whole set-up will burn in flames....

My advice to investors is to ride out the short-term market volatility, which may last several months, and look instead at the long-term positives of political and economic freedom.

It will now be up to Boris Johnson, the likely new British prime minster, and the Tory party, perhaps with bipartisan help, to negotiate a good trade deal and move more aggressively on the pro-growth path of free-market supply-side policies.

There's already talk about abolishing the 5 percent value added tax on household energy. Good. Taxes need to be reduced across-the-board, heavy regulations need to be rolled back, and government spending needs to be restrained.

This is Britain's opportunity


  1. Voting to leave the EU and actually leaving the EU are two different things. Anyone know what actually has to happen procedurally?

    1. leader of the country invokes articale 50 saying they are withdrawning EU works out path for that withdrawal.
      while the UK may legally leave. de facto they are still going to have an impact. I can see coordinating committees and such keeping everyone on the same page much as they are now.

    2. Apparently some Members are calling for the government to just ignore the referendum.