Monday, 4 November 2019

Half-honest isn't much of an improvement

In a strange few days, both Boris Johnson and Nigel Farage have been caught out telling half the truth; and being halfway honest is a huge step forward for both of them, although I doubt that it will last for long.
In Johnson’s case, he has been claiming that a future trade deal with the EU will be easy because the UK and the EU start from a position of complete alignment on rules and regulations.  The second part of that is the true part; the first part is only true to the extent that it is his intention that the regulatory alignment will continue.  And given that his whole rationale for Brexit is to end that regulatory alignment, it turns the easiest deal in history into the hardest, because it is the first time ever, as far as I’m aware, that two trading blocs have deliberately set out to negotiate a weakening of trade ties between them.  It’s a point which Michel Barnier has already made.
In Farage’s case, he has claimed that consumers and businesses will all benefit from lower prices once the EU tariffs between the UK and the rest of the world are lifted.  And he’s right, of course he is, to argue that if goods on which tariffs are currently paid can be imported free of tariffs, then those buying them will be able to benefit from lower prices.  There is an unstated assumption, though, which is that the buying power of those consumers and businesses remains unaltered.  However, if cheaper goods compete with UK produced goods and UK producers subsequently go out of business, than those employed by them will see their buying power reduced.  It won’t affect everyone (we can be reasonably certain that the likes of Farage and Johnson will not be impacted), but an increase in company failures with a consequent reduction in total employment reduces overall buying power. Many individual consumers may not be affected, but others will be dramatically impacted.  And on the basis of many economic studies, the probability is that those most directly and significantly affected will be precisely those who were persuaded to vote for this 'new improved' future.
Both men are clearly selling cakeism to the electorate at large – the idea that there are no trade-offs and that we can enjoy all the benefits without the costs.  It’s a con trick, of course; but con tricks work, and many are taken in by them.  Contrary to popular belief, the most successful cons aren’t like the one in The Sting which targeted a single rich crook; they depend instead on taking comparatively small sums from large numbers of honest individuals.  Those individuals are often those who can least afford to lose anything but are also most in need of the good fortune which the conman promises them.  They fall prey because they want to believe that they are being offered a way out.  A desperate person would sooner believe a promise of great fortune than a cold hard analysis of the reality facing them.  Both Johnson and Farage instinctively understand this – just look at which electors they are targeting in the coming election.

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