Wednesday, July 06, 2016

The misconceptions of Brexiters.

A lot has been said already - but since we now live in the age of consequences - it is best to repeat exactly how flawed these conceptions are.

1) "Britain stood alone before and can do it again" - No - Britain was never "alone" and can't "do" anything "again".

Britain in its economic heyday as an empire and as a commonwealth always had an economic partner. Britain's per capita GDP only began to rise after the Crown seized land in the Americas in the 1700s. After the US became independent, the British economy was held aloft by its trade relationship with India. The entire age and glory of the British Empire came from Britain's ability to rape India's resources and shore up its own capital base.

Post WWII Britain emerged as the only economy in Europe that still had buildings standing. Everyone else had to build nations out of rubble. The Brits profited intensely by essentially acting as the middleman in the loans written out from the US to the European nations. For every dollar invested in the Marshall plan, the Brits pocketed a few cents as transaction fees. This allowed them to rebuild their nation even after the Empire was lost. Post WWII prosperity exists in Britain today only because of its trade relationship with the EU.

"Alone" Britain is simply a tiny island with no real connection to the global economy. Masturbating to a fantastic history is okay in principle - it makes for a great night in the pub - but it is exceedingly stupid to vote on those grounds.

I used to think that only Indians are stupid enough to vote on nostalgia of a mythical Hindu utopia, but I guess Brits are no better.

2) "Who doesn't want to trade with us?" - Actually everyone doesn't want to trade with you that is why the Pound is falling.

There is very little that is actually produced in Britain today. What little is produced is consumed locally this generates very little revenue. The mainstay of British revenue generation is a kind of transit trade. Goods and services flow via Britain to various European markets in exchange for debt instruments that are passed back and forth between the producer nations, Britain and EU consumers. Most of Britian's economic weight is owed to its ability to charge a premium on this peculiar transit trade.

By going off on a limb like this the Brits have screwed themselves out of a stable pattern of transit trade. It is akin to the Pakistanis suddenly deciding that they don't want to be a transit route for Afghan opium. The total revenue generated from the Heroin transit trade in Pakistan is estimated to be the size of the Pakistani GDP. If Pakistan decide it wasn't going to be a willing partner in this trade anymore - the entire economy would collapse. This is also true for Britain.

A simple way to understand this is that cash flow from every loan ever taken by someone in Britain is linked intimately a particular transit trade item. If you shut down the transit trade, capital/debt transactions will become completely disconnected.

3) "It can't get worse" - No my friend - it can and it will get worse. Thanks to this recent bout of stupidity, any trade flow across Britain becomes more risky which means there will be more hidden fees that all Britons will have to shell out to get people to come trade with them.  If Britain was rich like it once was during the colonial period, it would offload this new debt on to one of its colonies. That sort of thing would create a famine out there but the Brits would be fine. But today - Britain has no such offloading capability. If Britain has to come up with extra trade fees, then it will have to generate that revenue internally - basically by shutting down parts of the NHS. That will make matters quite a bit worse for all Britons.

4) "Europe is Bluffing" - Err.. No. Take a good look at Eastern Europe. Take a good look at port traffic patterns in the ports of Naples and Rotterdam. Look at how many ships from China are directly docking there. Now look at the same data for the ports in the UK. Compare the numbers and you will see Europe doesn't really need Britain as a transit point. The whole reason WWI and WWII occurred was that Britain "ruled the seas" and it could prevent European economies from accessing resources in their colonies. That is hardly the case today.

5) "Look its just neighbors hav'ing a tiff" - Yeah - the last time that sort of thing went down - nothing bad every happened. (end Sarc).

41 Comments:

At 8:31 AM, Blogger Ralphy said...

the impact of Brexit has yet to be determined by economists. Britain has the 5th largest economy in the world by some public estimates. And, it's not like the EU is going to stop trading with them although there may now be some tariff tax differentials applied. The question is, how much is this going to cost them?

Did people really think that having a tidal wave of immigration and loss of border control would not cause any backlash? Foolish, indeed.

Here in America, the lower middle class and the working poor are tired of having their jobs pimped off by the power elite in hopes of global trade deals that mainly enrich the only the power elite. Now that may not be the actual case BUT our perception ultimately defines our reality.

Automation is another job destroyer but nobody wants to discuss because mainly nobody has any answers to alleviate the joblessness of the those w/o training and education. Which is further aggravated by millions of illegal workers in America,

I fear for the Motherland.

 
At 5:10 AM, Blogger maverick said...

A backlash on immigration is fine. Creating a situation where the entire global economy is put at risk due to a personal sense of inadequacy is not fine.

I am sure the lower middle classes in the US are suffering negative consequences as a result of the loss of jobs to other countries and robots, but they are also enjoying the benefits of the reduction in the cost of goods sold that has resulted from the cheaper labor and robots.

An average American/Briton is able to afford a car, a house, have food on the table, smart phone, a big screen TV, near unlimited internet bandwidth, free porn etc... etc... - those are luxuries that most people in other parts of the world cannot have.

The power elite make money by using robots and outsourcing but the money is funneled back into the US economy via Wall Street. The profits of from this are indirectly put into the US Government's tax revenue and into the IRAs of most "Middle Class" Americans. The result of this is that most Americans today are able to live very long and comfortable lives.

In the imaginary golden age of the baby boomers of the US/UK - very few people had access to these luxuries. While the boomers grew up in the "swell years" - the Great Generation sacrificed itself to bring world peace and establish order. Many Great Generation members worked night and day so that the boomers could have a better life. No one had an IRA and the social security and welfare system was practically non-existent. The average life expectancy was quite a bit lower than today.

The Boomers (especially in the US and UK) never grasped that reality. In Europe, the first cohort Boomers actually saw some of the destruction caused by WWII and so they were a little more aware of the reality of their times. At least some European boomers understood how fragile the peace was and continues to be.

 
At 5:10 AM, Blogger maverick said...

As the PEW center's research clearly indicates, the "Millions of Illegal Immigrants" that came to the US during the real estate boom of last decade have gone back to Mexico. After the real estate sector collapsed, the jobs simply disappeared. The real estate sector has made a recovery of sorts, but it is not a boom situation any more and jobs are still quite scarce.

The only thing that is currently limiting entry of Boomers and Gen Xers into these "low end" jobs is that they either don't want these jobs as the pay is too low or they lack the skills needed to perform these jobs at the quality levels mandated by the insurance companies.

In the case of the Boomers, they never invested in learning or education beyond a certain level. Most Boomers believed a high school degree was sufficient to get through life. They never quite got the fact that it really isn't enough and that you have to be retrained multiple times in your life if you are to remain employable. They never set aside resources for a retraining and potential retrenching midlife. They never really acquired new skills at a rate that left them in a position to seek new employment.

In the case of Gen Xers, there was a de-emphasis of low end skill sets in the early years. So there simply aren't enough Gen Xers with the right skill mix to be a plumber, an electrician, wood worker etc... Also this generation was taught from day one that these skills were "below them" and so there is a reluctance to pick up these skills. That creates an invisible but real psychological barrier to performing these jobs.

The result is that the only ones who are still willing to take up the "low end" jobs are perfectly legal immigrants and desperate marginalized people who have so little going for them that they will do anything to survive.

Every "Middle Class" person the US (and UK) today fear loss of status. Some of that loss is unavoidable given the financially imprudent irresponsible lifestyles there.

If the American Middle Class continues its present course, they are going to decay into a similar state of complete desperation. They will backlash/rebel/revolt and then quietly line up for the shitty jobs they felt were too "low" for them to get into.

What we are seeing here is the first steps of this process of mental and psychological realignment.

All this reminds me of what happened in the Soviet Union.The Soviet "Middle Class" of Communist Party Apparatchiks of the 80s were living a high life (by Soviet and average Global Standards) and they got real antsy about loss of status in the 80s. So they rebelled against their party leaders. This led to the dissolution of the USSR and the emergence of all those republics. And then the economy and patronage system that actually kept them in any position of security collapsed and most of them suffered even more for the majority of the 90s. It was only the resurgence of the Russian oil economy that caused a brief period of prosperity but the great Soviet "Middle Class" didn't see any of that - most remained in their grimy soviet era apartments freezing and starving to death.

 
At 5:37 AM, Blogger maverick said...

On an unrelated note:

The tragic situation in Dallas seems like something out Punjab in the days of the Khalistan rebellion.

More information about the identity of the shooters and any links they may possess is needed.

It is incorrect to label these people "snipers". First a sniper's kill ratio is much higher. These are spree shooters who had access to assault rifles.

After viewing early videos of the events, it looks like these people possessed no real tactical skills and didn't appear to have significant levels of real military training. One video shows a shooter out maneuvering a police officer hiding behind a column. This looks like a move you see in a first person shooter game.

It is important to contrast this sequence with Nairobi and Bombay. In both cases, the shooters barricaded themselves with hostages and drew fire from responding units and killed large numbers of responders in carefully staged ambushes and where possible high intensity explosives were used. That is the fingerprint of a serious hard fighting Jihadi operation.

I do not see that fingerprint here.

I am inclined to conclude that this is a local anti-government or anti-Police group. Domestic terrorism has deep roots in the US.

An FBI counter terrorism team has set itself up at the Hyatt hotel in Dallas. It is carefully processing the witnesses and reconstructing the crime scene. The incident has exceeded the resources of the DART and Dallas PD.

I think it is best to wait for their investigation to conclude before commenting extensively.


 
At 5:54 AM, Blogger Ralphy said...

they have some suspects in custody. we'll have to wait and see how this winds up. probably local people.

 
At 5:59 AM, Blogger Ralphy said...

if the power elite wants to change the lower classes' minds about these global economy deals then they should really try something other than income stagnation that has resulted for the lower class in the last four decades. the top one percent gets richer and everybody else gets crushed by things like bankruptcy for medical bills.

 
At 6:00 AM, Blogger maverick said...

https://www.reddit.com/live/x7xfgo3k9jp7

is pretty well updated.

 
At 7:00 AM, Blogger maverick said...

I agree the inability to service medical debts should contribute directly to reduced life-expectancy.

Until we see clear statistical evidence of that pattern (I know there is some data for Cohort II White boomers in the US) it will be difficult to make this claim very credibly.

It is not clear right now from data that is actually happening.

 
At 7:01 AM, Blogger maverick said...

The data I speak of points to an unexplained decline in life-expectancy of Cohort II White boomer males. The data for women is within the statistical error range.

 
At 7:13 AM, Blogger maverick said...

Race appears to be a factor in the Dallas events. That explains why the DPD is avoid bringing up the race of the suspects at this time.

I feel that initial eyewitness reports may be mixing up national security personnel with perpetrators.

Dallas PD has been targeted last year with automatic weapons and given the level of anger in the protest there was a credible threat perception. Usually the response to these kinds of perceptions is to have a combined and local response.

Reports place some DPD undercovers and informants in the area.

It is unknown to me if any other NSC contractors or personnel were also in the area. As there is a criminal infiltration in the BLM, it should not be surprising if federal agents in plain clothes were also in the area.

 
At 9:55 AM, Blogger maverick said...

News reports suggests a single shooter.

This is possible, given how confused the situation was.

That brings the kill ratio closer to that of a "sniper". The ratio is usually 10:1 - a sniper will take out something like 10 people before being contained.

The shooter appears to have been in the Army in some capacity and was actually trained to correctly use his weapons and had some kind of combat indoctrination. This explains his composure during the assault.

It also seems from the video clips that the shooter was moving a lot between shots. That would also explain why DPD was unable to localize him.

 
At 10:41 AM, Blogger Ralphy said...

an army veteran who served in Afghanistan. He drove his mom's SUV for christ's sake!

 
At 6:38 AM, Blogger Ralphy said...

Now that I've had time to think about your doom and gloom predictions for Brexit I must tell you that I think you are off base in your estimate of the situation.

1. Britain has an ace in the hole that the EU does not. To wit: Its relationship with the US, Canada and Australia. It is probably more culturally compatible with the commonwealth plus the US than it is with France and Germany.

2. Britain is a highly technical and culturally adaptable country. It's never far behind the US in this regard.

3. Britain has a highly developed military industrial complex that works hand in glove with the US.

So while separation from the EU will cost Britain, by no means will it stop ever closer ties to the US, Canada and Australia.

your analysis misses these factors.

 
At 5:48 AM, Blogger maverick said...

I don't think this is overestimated. I think the Brits are going to get it up their collective behinds. There isn't anyone else they can blame for this.

The relationship with the US is based primarily on Britain's ability to be a good medium for communication with European countries. If Britain's priorities vis-a-vis Europe are rewiring its own trade ties to Europe, then how can Britain be a good proxy for US interests? It would be simply too busy to carry America's burden in Europe. Brexit from Europe is pretty much also Brexit from the "Special Relationship".

Britain's cultural adaptability has come largely from immigration, i.e. Britons leaving their island nation in search of fortunes in other lands and outsiders coming to the Island to replace the lost manpower with cheaper imported labor. That is precisely what the Leave movement said it would stop in its campaign. They tried originally to make it seem like economic benefits would come from a "Yes" to Brexit - but when that failed they shifted to the usual xenophobic stuff. Once you cut out the flow of "foreigners" - then the cheap labor goes away and they have to pay real Britons to do the same work. That drives the cost of the labor up and that means a lower quality of life for the very same Britons as they finally do all the shit work that no one else wants to do. When Britain shuts its door to foreigners, other nations will shut their doors to Britain.

Actually I can't think of a single thing the Brits make in the Military Industrial Complex that is a "must have" or a "can't be had from elsewhere". Their prime mover in that space BAE has been scraping and scrounging scraps from the main market. They are a presence in the secondary or sub-system space, but most of the customers are in Europe. For example the Eurofighter - the only real clients for that in Europe and three ME countries. Brit industry is not as competitive as it used to be.

I am sure if some British PM ran a "In/Out" campaign on the "Special Relationship" - the Leave campaign could win with the same tactics. Xenophobia works just as well against "Yanks" as it does against "Poles, Pakis and Black People".

I don't know what "did it all alone" Britain these people are talking about! Their fucking tea is from India and their pounds come from the US. These people would never have been able to face Hitler or the Kaiser without Indian and US help.

Even the fucking computer science shit they take credit for - breaking the Enigma Code - that was actually done by a bunch of Polish grad students with about one hundred times less resources before the Brits ever knew Enigma existed. The only way Britain ever made any real headway in that was when the poor Poles ran to London with their research. And this is the same country that wants the Poles out.

I don't understand where they get off thinking like this.

 
At 5:55 AM, Blogger maverick said...

>> an army veteran who served in Afghanistan. He drove his mom's SUV for christ's sake!

Yeah - that is a Millenial thing. I wouldn't read too much into it.

Millenials can't keep borrowing money from the future like the Boomers did. The only way a millenial can keep expenses down is by living with their boomer parents and using their car.

I mean - he had to save money to buy all those guns and get all that massacre stuff all worked out right? - that shit costs money - so he probably figured if he just lived with his mom and helped around the house, he could save rent and a car payment that would leave enough money to buy the AR-15, ammo and time at the combat range.

I suppose he could have just maxed out his credit cards before going on a shooting spree, but that is much more a boomer thing than a Millenial thing.

Like Charles Whitman - Johnson was a man of his age.

 
At 6:00 AM, Blogger maverick said...

I'll come clean Ralphy. What went down in Dallas or Orlando is tragic but it just a part of the American life these days.

I am just feeling good that this wasn't some full-on redux of Nairobi or Bombay. Small mercies really. I really hope we don't see a carnage like that again. I mean it - people aren't able to get that stuff into their heads. VBIEDs, Convoy challenges, multiple simultaneous hostage situations, hardened attackers, suicide bombers etc... all at once. The US isn't ready for that.

All this stuff in Orlando and Dallas, yeah - it is bad, but that where America is today. One just needs to look on the bright side (i.e. America is NOT Afghanistan or Iraq ... yet..) and carry on with life.

The world is a fucked up place. Call that my GenX perspective if you will.

 
At 3:24 AM, Blogger maverick said...

I would like to believe that Theresa May can turn the ship around in Britain.

I hope it all works out for the best.

Clearly ordinary Britons have now proven that they can't be trusted to make important decisions about their own country. I mean - what else should I say about a people who google "what is the EU" after voting to leave it!

 
At 12:23 PM, Blogger Ralphy said...

having free elections appeals to the worst of instincts sometimes. however, it is my firm belief it is the best system that we have. Socrates and Plato not withstanding.......

 
At 12:25 PM, Blogger Ralphy said...

remember....Hitler wasn't first elected.....he was appointed.

 
At 6:42 PM, Blogger Nanana said...

Full text of my testimony before the House Foreign Affairs Committee on #Pakistan's support of terrorist networks https://t.co/BDPre9aQ1G Zalmay Khalizad testimony

 
At 6:53 PM, Blogger Nanana said...

http://www.longwarjournal.org/archives/2016/07/pakistan-friend-or-foe-in-the-fight-against-terrorism.php

Bill Roggio's more substantial deposition.

Too cynical to believe that anything will happen of this.

 
At 5:38 AM, Blogger Nanana said...

http://newslinemagazine.com/magazine/19256-2/

Haqqani tries to talk some sense

 
At 6:59 AM, Blogger maverick said...

Dear Ralphy,

I am just disappointed when an electoral process produces the same levels of stupidity as a dictatorial environment.

Dear Nanana,

Yeah - that is a lot of whining. Nothing will come out of it. No one can afford to antagonize nuclear armed Pakistan otherwise all the terrorists they are bitching about will just get Pakistan's nukes.

 
At 7:11 AM, Blogger maverick said...

I always looked at the UK with a sense of fondness. They were a multi-racial multi-ethnic democracy focused on progressive national goals (just like India, the US, France, Germany etc...) while also ensuring that they were also blind drunk for the better part of the day.

Their ability to do this drinking and progressing bit was the most lovable aspect of their national character - now I am just not sure anymore.

The irresponsible behavior of the British electorate has made me question everything I thought I understood about Britain.

I don't have a problem with people drinking, all I am saying that is that I am not sure inebriated people should be allowed to vote.

There really isn't an "undo" button on something like this.

 
At 4:54 AM, Blogger maverick said...

Re: Nice attack.

I was quite confused when the Assad regime suddenly declared a national ceasefire and President Obama reached out to the Russians to build a coalition in Syria. I wondered what was happening and then ISIS sources began to speak in the past tense about the Caliphate.

Two days ago I saw this article pop up.

https://www.washingtonpost.com/world/national-security/inside-isis-quietly-preparing-for-the-loss-of-the-caliphate/2016/07/12/9a1a8a02-454b-11e6-8856-f26de2537a9d_story.html

It appears that as for all its special access to God - ISIS is admitting that the it cannot withstand artillery for long periods of time and that it will no longer be able to maintain its current physical form in Shams.

As the ISIS "corporate" office in Shams closes down, it appears that the "franchisees" and "job applicants" are being told to take it to the next level wherever they are.

Amazing as it seems - this whole thing may now be completely crowd-sourced. I wonder if we will ever find anything substantial between the driver and ISIS "corporate HQ".

That is going to be a giant pain the ass.

 
At 5:11 AM, Blogger maverick said...

Actually now that I think of it - the ISIS eschatology is a millenarist/apocalyptic one (cf. William McCants' book).

So this narrative of the collapsing Caliphate fits well with that basic trend.

 
At 11:09 AM, Blogger Ralphy said...

the death of the middle class is worse than you think.......

http://fortune.com/2016/07/13/middle-class-death/

 
At 11:16 AM, Blogger maverick said...

Alright - sorry to be the one that does this.

What do we know about his contact with ISIS or Al Qaida?

It is just that this guy was not on any watchlists.

And then there was this

"Also found in the lorry were an ammunition magazine, a fake pistol, a replica Kalashnikov rifle, a replica M16 rifle and a dummy grenade."

So is this connected with ISIS/AQ/whoever?

 
At 11:19 AM, Blogger maverick said...

more on this

http://www.mirror.co.uk/news/world-news/who-mohamed-lahouaiej-bouhlel-what-8425647

"His wife’s cousin claims he was an “unlikely jihadist” who drank and ate pork"

Walid Hamou told the Mail he was “not a Muslim, he was a s***” and was a “nasty piece of work”.

He said: “Bouhlel was not religious - he did not go to the mosque, he did not pray, he did not observe Ramadan.

“He drank alcohol, ate pork and took drugs. This is all forbidden under Islam."

Is this a really really bad road rage incident?

 
At 11:22 AM, Blogger maverick said...

Hmm.. Hollande just used the word "probably" when describing the attacker's links to radical Islamists.

This is very different from the "This is Daesh" tone he took after Bataclan.

We are either dealing with a sleeper or this is just the worst single incident of road rage in human history.

 
At 11:43 AM, Blogger maverick said...

I am sorry I guess road rage has a very specific definition.

I mean "rage on the road" as opposed to "road induced rage".

 
At 2:48 PM, Blogger Ralphy said...

coup in Turkey. Erdogan says he's still in charge.

 
At 2:52 PM, Blogger Ralphy said...

I wonder what the Turkish military is unhappy about?

 
At 6:46 PM, Blogger Ralphy said...

as long as there is internet preaching of violence against those of different faith we are going to see wild card attacks.

Some how the preaching of violence for ancient recriminations has to cease on the public domain. Small time hoodlums are soaking this sh*t up and wrecking havoc.

Failing that, then mass deportation or this will continue.

 
At 6:34 AM, Blogger Ralphy said...

power has been cut off to Incirlik AFB. more skull duggery. Erdogan blames an iman in the US for the coup.

 
At 6:44 AM, Blogger Ralphy said...

Turkish civilians beating surrenderd Turkish soldiers.

http://www.nbcnews.com/slideshow/scenes-confusion-during-attempted-coup-turkey-n610591

 
At 6:47 AM, Blogger Ralphy said...

I hope the Turks don't try attacking US troops in Turkey. That would be a mistake. Incirlik is on highest alert. They should be ready.

 
At 5:09 AM, Blogger maverick said...

if I had to take a guess what this is all about I would say it is probably about the end of the ISIS oil revenue stream.

Ergodan is not as well liked as he thinks.

I am just shocked that in this day and age, in a major democratic nation - a government cannot maintain control of the airspace in its capital!

This business of the helicopter strafing the MI HQ - it is unheard of in a modern context.

 
At 5:34 AM, Blogger maverick said...

Looks like Incirlik is online so far. Were there any unexpected incidents?

 
At 9:13 AM, Blogger Davao Incorporated said...

no. it only lasted a day. they arrested the turkish commander of Incirlik and then allowed flight operations to resume there after.

 
At 4:50 AM, Blogger maverick said...

Dear Davao Incorporated,

If there was no incident. Why were Bakir and his staff arrested?

I am asking because I do not know the ground situation.

At a time when it was not clear who his friends were in the military, it would not be a good idea to arrest people who may not have been involved.

 

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