¿EZ Catastrophe? and ¿¿Generational Melodrama??

Ja notice how every tiny little bit of televised reaction to the successful "Brexit" vote was horror and the prediction of catastrophe? I wonder which side scripted that news. Reading Scott Sumner was a refreshing change.

Sumner:

Some see it affecting Britain's economy by disrupting trade, whereas it actually hurts the eurozone more ...

British stocks are down around 4% as I write. But French and German stocks are down 7% to 8%. The markets in southern Europe are down 10% to 15%. Brexit's most powerful effect is to make the eurozone crisis worse, by increasing doubts as to whether the eurozone will stay together.

I don't want to overstate things; the level of equity prices in the US is still quite high---and thus the markets currently do not seem to be forecasting a recession.

BTW, there are some very good arguments in favor of Brexit ...

I couldn't have said it better myself. Except the part about equity prices. I don't know anything about equity prices.

Of course, I don't beam over to Sumner's all-too-predictable conclusion: "The single most useful reform at this moment would be a global shift toward level targeting."

You had to see that one coming. And then there's this:

Three in four young voters wanted to remain. They will have to live with the consequences. There is a sense in which the older UK voters stabbed their children in the back (Yes, that's a bit melodramatic, but there's a grain of truth.) When the older voters die off, will Britain rejoin the EU, or will the young get more nationalistic as they age?

... and Robert's response:

As far as young voters, do you feel that younger voters are better or less informed on the underlying issues as older voters? Are younger voters more cynical and less influenced by propaganda than older voters?

You know those models economists use all the time? Simple two-generational models, where, I don't know, the one generation is working and the other is retired, and there is some interaction between the two that the model uses to prove some ridiculous claim? Those models? Well, let's apply a two-generational model to Brexit preference.

As the older voters die off and the young age, the latter's view will become more firm and less liable to change. But there will be a new young generation that has grown up knowing Great Britain as a sovereign state. The generational disagreement will die out with today's young voters, in their old age.

//

Today, older voters remember Great Britain as a sovereign state. Younger voters think of Great Britain as like New Jersey: nothing sovereign about it. All the TV coverage yesterday relied on the argument that "Remain" is "good for the country" or "good for the nation". Yeah, but for which nation? For Great Britain, which already exists more in memory than in fact? Or the nation of Europe?

"Leave" is good for Great Britain. "Remain" is good for Europe.

Younger voters prefer to remain because they have no real memory of their nation as a nation. Older voters prefer to leave because they have that memory of the nation known as Great Britain.

The result of the vote was political, not economic. It was the right choice, because the creation of the European Union was also political. The creation of the EU was a political solution to economic problems. It was sold to the voters as a solution to economic problems. It would make the economy better, the voters were told.

And the Brexit:Leave decision is the voters' way of saying the European Union is an economic plan that didn't work.