The Brexit saga has become a bizarre hostage situation: Boris Johnson is the kidnapper, the ransom is the backstop and Ireland is the hostage. Johnson is demanding the EU drop the backstop or he will shoot the hostage. We’ve been here before. Traditionally, the mantra has been: “We never negotiate with terrorists.” Let’s see what happens.
We all appreciate the notion that if we reward bad behaviour, a kidnapper will resort to intimidation again. The European Union has a choice to make. Ireland will survive this. It might well be convulsive but the economy is strong enough, just. And then what?
When you think about it, the “no-deal” option is only “no deal for now”. No deal is not a long-term option; ultimately, the United Kingdom will have to do a trade deal with the EU. The facts are pretty straightforward – 47 per cent of all UK exports go to the EU and, in turn, 52 per cent of all UK imports come from the EU. No matter how the hostage drama turns out, no matter what the political and economic fallout, the UK will be back at the table very soon. The more chaos at British ports, the shorter the self-imposed mercantile lockout.
Watching Sanders this morning, cajoling his troops, emoting his followers and leading them again, it is clear that what underlies his movement and gives him energy is the cause. The objective is to give more and more people access to some of the enormous wealth of this extraordinary country.
“The way he was talking, you’d be mad to rule out another presidential bid in 2020.”
This was my conclusion to an article published following a weekend at the Sanders Institute in Vermont last November. It ran counter to the prevailing wisdom that Bernie Sanders shouldn’t/couldn’t/wouldn’t run for the US presidency again on the grounds that he was too old. If elected in 2020 he will be 79 years old, which would make him the oldest Democratic president ever.
At this time of the year, newspapers are packed with predictions about what is likely to happen to the economy in the next 12 months. Underpinning all these views, whether negative or positive, is the pretence that the economic cycle in some way neatly follows the Roman calendar, as if the economic cycle begins on January 1st and ends at the stroke of midnight on December 31st.
Of course this is not how the economic world works. The economic cycle is impervious to our calendar cycle. Possibly because our human need for order, control and rhythm is so great, we feel compelled to align the economic cycle with the 12-month calendar cycle. In reality, the economy is a much more unregimented creature. The peak to trough of the economic cycle can last years. For example, the US is now in its 10th year of an economic upswing. Similarly, the Irish crash didn’t start on January 1st of any year, and end the following December. It kicked off abruptly and the subsequent recovery occurred slowly, bit by bit, over a number of calendar years.