TRUMPXIT: The Bell Tolls for Thee
We were once indispensable. Now we’re just unpredictable. Economic power runs on trust. Trump has burned trust in America to the ground. Brexit slashed Britain’s growth. Trumpxit is now doing the same over here. And it will do it even if no tariff is ever imposed…
The very sharp Matthew Winkler put a stake in the ground last year. He assessed the damage from Britain’s 2016 Brexit:
Matthew Winkler (2024): Brexit’s Lasting Damage Is Looking Inescapable <https://www.bloomberg.com/opinion/articles/2024-03-19/brexit-s-lasting-economic-and-financial-damage-looks-inescapable>: ‘By almost every economic and financial measure, parting ways with the EU almost eight years ago has been disastrous for the UK. Is there no end in sight?… The toll of the June 23, 2016, referendum was more than double any of the eight worst days since 1981….
Sterling’s sudden collapse and failure to recover proved to be the signal that Britain’s best days are fleeting. For most of this century, the UK was the biggest beneficiary among the 27 countries in the EU. Measured by gross domestic product, GDP per capita growth, unemployment and superior debt, equity and currency valuations, Britain was the perennial leader. All of these superlatives ended with “Brexit” almost eight years ago. The EU since then outperforms the UK, whose listless economy is now little more than an also-ran….
The average premium investors pay for the future profits generated by the stocks in the 20 countries… [in] the euro zone, is 25%…. Between 2006 and 2019… [it] was zero…. Investors perceived no difference between the… euro zone and… UK…. The market… got it right. More than 50% of the British electorate belatedly acknowledged sterling’s June 2016 omen when they told polling firm YouGov in July they would vote to join the EU again…. British politicians instead show no hesitation offering prescriptions for the plight of Gaza 3,000 miles away and yet can’t be bothered to discuss remedies for the failure to protect vital UK industries such as finance and data while the public increasingly blames rising shop prices, reduced health care and broken public services on the vote to leave the EU.
Far from being the bloated, inefficient bureaucracy derided by Euroskeptics – led by former UK Prime Minister Boris Johnson when he was the fabulist journalist for the London Telegraph – who colored the prevailing Brexit media narrative… the bloc’s per capita GDP increased 19%, or 2.19 percentage points more than the UK on annual basis since 2016…. Between 2000 and 2016 the euro zone trailed the UK by six basis points…. Britain had everything to gain from its EU inclusion and little to lose as the bloc expanded with the fall of the Soviet Union’s Berlin Wall and rapid integration of Eastern European countries.… No one doubts now that Brexit hindered rather than helped the ailing British economy…
And now, for us Americans, it is very clear that we need to listen to the tolling of the bell that tells us what Britain has experienced over the past ten years as a result of that extremely unwise choice. And we need to remember John Donne: “Ask not for whom the bell tolls: it tolls for thee”.
It is becoming increasingly clear to me: Suppose Donald Trump were to stand before the cameras tomorrow and say “never mind” to all of his proposed tariffs, export restrictions, and trade-war bluster. Suppose he were to retreat from the abyss with a mischievous grin. Suppose he were to declare it all a test. Suppose he were to do all of that. Then the odds are the damage would have already been done, for we would still be living in a post-Trumpxit world.