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The Brexit debate in the UK is dominated by airy assertions: we’ll form a “deep and special partnership” with the EU, “no deal is better than a bad deal”, there is “nothing to fear” about exiting without a deal and trading on World Trade Organisation terms will be “just fine”. Passions are running high on both sides of the debate and wild claims about the impact of various exit models are commonplace. What is urgently needed is evidence that will allow a cool-headed appraisal of the inevitable compromises ahead.
As it happens, the Treasury has produced a series of “impact assessments” which look at different Brexit models and the effects they would have on the economy. Yet despite repeated calls from MPs of all political shades, the government is keeping them under wraps. Our FT View editorial argues that Brexit is too important to be conducted in the dark and that these documents should be released to better inform the country about which kind of Brexit will be the least economically damaging.
It is particularly important for politicians to have access to these reports. At some point in the future, the House of Commons will vote on the deal negotiated between the UK and the EU. All the mood music suggests this will consist of a stand-still transition period, plus the outlines of a free trade deal. The former will be welcomed by businesses but MPs need to know the pros and cons of exiting the single market and the customs union before voting. Some argue that this is about stopping Brexit. In fact, it is about ensuring Brexit happens in the most economically beneficial way.
Laffer speaks: Arthur Laffer (he of the curve) argues in an opinion piece that Donald Trump’s tax cuts will put the US economy back on a path to growth. With a combination of deregulation and pro-growth energy policies, he argues that sustained economic growth of three to four per cent is probable.
Never-ending QE: Wolfgang Münchau says that the fragile state of the eurozone economy means the European Central Bank’s asset buying programme may never end. The unspoken risk in Frankfurt is that if the purchasing dries up, investors may look at the state of the Italian economy and get itchy feet once more.
Shareholders’ priorities: Rana Foroohar raises the question of whether corporate governance matters in an age of passive investment. With proxy shareholders increasingly concerned only with returns, the incentive for good governance is withering away.
Best of the rest
Will Harvey Weinstein’s Fall Finally Reform Men? — New York Times editorial board
Be like Chamberlain and start building homes, Mr Hammond — Andrew Rawnsley in The Guardian
The Winds of Tax Reform — Wall Street Journal editorial board
Britain’s Brexit toxicity is pushing the Scots away — Chris Deerin in the New Statesman
Russia is furious. That means the sanctions are working. — Anne Applebaum in the Washington Post
What you’ve been saying
Rewriting the myths about women— letter from Rea Stavropoulos:
“If in the eyes of our society we continue to see women, however distinguished, accomplished and multi-faceted, as airbrushed bimbos, then we will remain with the myths of Eve emerging from Adam’s rib and Athena from Zeus, even if we have rid ourselves of the rape of Europa: always the junior figure until we reach our 90s, when we may be praised for our achievement in still being able to hold a paintbrush.”
Comment from SageAndOpinion on Billionaire boom is a sign that rates need to rise:
“While we're all moaning about the low interest rates and the easy money regime (possibly with justification), we should not take our eye off the main agents in our economic system; those in the corporate sector. For decades, there has been complaints of high corporation tax, high oil prices, over-powering trades unions and high interest rates. Given these parameters, we should theoretically be living in golden age of capitalism; we should be revelling now in the product of a system that finds itself in ‘goldilocks’ conditions. But instead, even with cheap oil, emasculated unions, cheap money, falling corporation tax and business-friendly right-of-centre governments, we find ourselves in a low-growth, low-productivity environment with obscene inequality.”
Reluctant marriages can work with compromise on both sides— letter from R James Breiding:
“Redistribution of wealth is difficult in any society, but works best when there is empathy accruing from common language, values, histories, and sense of belonging as in Denmark, and Sweden. Without these ingredients, citizens are inclined towards those self-centered tendencies that are the usual source of most political difficulties. Those who make money try to scrimp on taxes; those who do not try to extract rents from the state. At the end of the day, society becomes divided between by “those who do” and “those who mooch off those who do”.”
Trump’s tax cut will put America back on a path to growth Economics is about getting incentives right — taxes are an incentive to not act
Daniel Bell: Why China guards its selection secrets so jealously The government department that chooses leaders is notoriously opaque
Wolfgang Munchau: Why an ailing eurozone still requires extreme treatment Even after a decade-long recovery, the ECB may never be able to halt asset purchases
Rana Foroohar: Shareholders’ skewed priorities on corporate governance Proxy advisers incentivise the wrong company behaviour by creating rigid checklists
Universal credit is an attack on aspiration The new benefit is right in principle, but damaging in practice
FT View: Kenya lurches towards another political stand-off The outcome of repeat elections risks further polarising the nation
FT View: The Brexit debate is too important to be conducted in the dark The Treasury should release its impact assessments on the economy
The Big Read
The Big Read: Sand castles on Jersey Shore: property boom defies US flood risk Five years after Hurricane Sandy, plush new homes dot the state’s coastline. But is it safe to build in storm-prone areas?
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