Fwd: mainly macro

[Jonathan Clark]

Following a discussion in the street just now, I thought this might be of interest to people concerned about the danger of Brexit.

---------- Forwarded message ----------
From: mainly macro <noreply+...@google.com>
Date: 17 June 2016 at 08:13
Subject: mainly macro
To: jonatha...@whatho.net

mainly macro

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Brexit despair Posted: 16 Jun 2016 01:21 AM PDT Among everyone and everything I read at the moment there is a mixture of disbelief and despair over the now distinct possibility that the UK will vote for Brexit. Obviously that is partly because I tend to read other economists, and as Chris Giles noteseconomists are virtually united in believing Brexit will be bad for the economy. (If you cannot access the FT, read Paul Johnson.) But it is also because there is a cleareducational divide in support for Brexit, and I suspect most of what I read comes from one side of that divide. The only other event that I can imagine causing an equal degree of unanimous disbelief and despair would be if Trump looked like becoming President. There is disbelief because it makes no sense. Of course there is a minority who hate the idea of sharing sovereignty, and another minority that really hate immigrants. But these two groups combined would not be enough to win a referendum. Instead we have a much larger group that are concerned about immigration, but their concern appears to be not worth very much to them. This was something I notedsome time ago, but it seems to be a robust result: in a recent ComRes poll68% say they would not be happy to lose any income to secure less immigration (perhaps because they believe less immigration will raise their income). It makes no sense because economists are as sure as they ever are that people will on average be worse off with Brexit. But a large sectionof the population have either not got the memo or have ignored it. This will be an important point when it comes to what happens after Brexit: for many Brexit will have been a vote to control immigration, but only because a lot of those same people think that immigration can be controlled without making them worse off. In other words it will not be a clear mandate for voting against a Norway/Switzerland option, because anything else will make people worse off (as most MPs know). There is despair because economists and others who think Brexit will make people worse off have no way of getting their message across to those that really need that information. I know Gove has said he is fed up with experts, but I’m not convinced most people are (for reasons given hereand reiterated here). But writing articles in the Guardian or letters to the Times will not get through to those we need to hear the message (see final chart here). It is why I wrote this. For academic economists I think it is part of a general problem that the media are losing interest in what we think, which is why I wrote thisfor the Royal Economic Society newsletter. Whether we do or do not leave the EU, I hope one result of this referendum will be that otherwise sensible people will stop saying that our tabloid press is not that much of a problem. It might not be if our broadcast media were brave enough to report facts, but instead it is obsessed with balance, as well as being heavily influenced by what some tabloids say. How else can you account for 58% of people thinkingthat Turkey is likely to join the EU within ten years, which in reality is close to a zero probability event. Democracy can become dangerous when a few people have so much control over the means of information.

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