Gordon Brown Still Doesn’t Understand Markets, Does He?


Brexit is going to be very terrible, so the One Eyed Viking tells us:

Yet if no deal goes ahead on Thursday 31 October, it will be nothing like Norway or Switzerland. By the following day – what Brexiteers will call “Freedom Friday”- there will be long queues at Dover and by Saturday 2 November many of our motorways will be at a standstill. By that Sunday, food prices will be going up – a 10% rise is the latest estimate – and by Monday the pound will be sharply down on its pre-Brexit value. By Tuesday medical drugs from mainland Europe will be less accessible, and a week after Brexit, companies will be complaining that vital stocks and components are not reaching them, bringing the threat of having to put workers on short time, and economists who have long forecasted recession will not be surprised.

All of the above is not a “project fear” fantasy, but the most conservative conclusions of an assessment by the UK’s most senior civil servant, which was leaked in April. These conclusions have been backed up by the independent Office for Budget Responsibility, the National Institute of Economic and Social Research, a Commons committee report and countless others.

OK, let us say that all of these things would come to pass if Brexit arrived out of an open sky. Sure, I don’t, you don’t, agree. Why the heck would anyone stop selling us medicines just because we told Ursula to bugger off?

Now think what will happen when Ol’ Cyclops has been predicting this for three years? Markets being forward looking sorta things, everyone will have scrambled to make sure they don’t happen. As, in fact, did happen back leading up to March 29. Businesses stocked up, so much so that we saw a bolus of growth in GDP.

That the prediction is that the motorways will become parking lots is exactly why no one is going to be transporting anything at all by truck The Day After Brexit.

Or, as we might put it, Gordon Brown simply doesn’t understand how markets work, does he? That being only one of the reasons it was such a pity he did become Chancellor.