Stupid is as stupid does

Speaking at the end of a summit in Brussels where EU leaders started trying to pick through the wreckage after David Cameron’s referendum defeat, Mr Hollande warned that it would be unacceptable for clearing — a crucial stage in trading of derivatives and equities — to take place in the UK.

“The City, which thanks to the EU was able to handle clearing operations for the eurozone, will not be able to do them,” he said. “It can serve as an example for those who seek the end of Europe . . . It can serve as a lesson.”

Here is the FT story.  Note that London’s financial elites don’t need such a warning, whereas to the general citizenry it confirms the portrait of the EU as an anti-British regulatory tyrant.  You may recall France already tried to take clearing rights away from the UK, and that was well before the Brexit vote, so the French don’t exactly have the moral high ground here.  Nor should Hollande pretend that he can speak for the entire EU, as that personalizes the conflict in a way which is unhelpful and takes the EU further away the idea of the rule of law.  Merkel has the better instinct of simply talking to the British calmly and trying to de-escalate the issue.

One argument against Brexit, and in favor of a literal conservatism in many spheres of life, is simply that big changes can induce a lot of stupidity from the other players in the system.  Even though Hollande’s response is in some ways understandable, to pronounce it as if he is the sultan of such matters, and at such a delicate moment, is almost certainly…stupid.

Who else might do something stupid?  Putin?  Juncker?  The Dutch or Austrians?

For many international policy issues, it is worth asking the simple question: “which action or inaction of mine is likely to induce the smallest number of stupid actions in response?”  That won’t always give you the right answer, but often it is a good place to start.

Comments

“For many international policy issues, it is worth asking the simple question: which action or inaction of mine is likely to induce the smallest number of stupid actions in response? That won’t always give you the right answer, but often it is a good place to start.”

So, that's a no on both the American Revolution and the US Civil War then.

I'm not really going for a snarky comment here. It's readily apparent that such a philosophy would have precluded American Independence and would have precluded either Southern secession or the Northern fight to stop it. In either case, it would have meant decades of additional years of slavery.

It is not unrelated to Bryan Caplan's arguments for pacifism, yes.

But I do certainly agree that the biggest risk of Brexit is not Brexit per se, but the risk of stupid responses (on either side.)

All arguments for pacifism default to 'let the other guy pick up the gun'. When the arguing party is an Amish paterfamilias who farms for a living has as little to do with his social surroundings as he can manage, that can be regarded with some respect; they are forgiving and ready to die. When the arguer is a congenial Brethren real estate agent for whom the pacifism is an heirloom and whose daily life does not compel him to think two steps ahead, that's tolerable. He's a pleasant person who injures no one. When the arguer is an obnoxious chess nerd forever impugning the motives of others because the minds of others are another country and borders are closed, it's not tolerable. Stuff him in a locker.

What about if he's an old fuck that likes to talk a good game but doesn't do much of anything other than pseduoanonymously insult people on the internet?

ed really nailed me.

England ended slavery in their colonies decades before the civil war ended slavery in the US

"England ended slavery in their colonies decades before the civil war ended slavery in the US"

True, but irrelevant to the issue. Slavery would not have ended by 1865 in the US without the Civil War.

Without the civil war of the colonies against England slavery would have ended sooner in the American colonies!

Wouldn't the fact that the Colonies still existed as Colonies have been a reason for the British Empire to retain slavery longer than it did in the actual world?

JWatts knows all counterfactual realities. It's a gift, really.

Sure Jan, go ahead and explain to all of us dullards exactly how slavery would have ended by 1865 in the US without the Civil War?

Maybe worth to mention: after loosing the colonies, the UK had no major slave population/significant slave-labor based colonies (maybe Jamaica as largest?). Also in India labor was cheap and easyly available without slave-trade. On the other hand, France's Hispanola colony, i.e., Haiti, was based on slavery and highly profitable.
So, abolishing slavery had only a limited impact on the UK economy while allowing to potentially harm a majoy competitor (at least morally).

Contrary to your supposition, the U.S. Civil War is actually evidence for the wisdom of the approach. From the time of his election through his assassination, Lincoln went out of his way to avoid triggering an excessive (i.e., stupid) reaction from the South (and from Northerners sympathetic to the South and largely indifferent to the rights of slaves). By contrast, the South overplayed its hand, forced military engagement, slaughtered captive black troops and their officers, and took other aggressive positions which forced the North to pursue ever more aggressive approaches and made it hard for foreign governments to back them to their own detriment.

None of the above is a reasonable summary of the run-up to the war. the vision of Lincoln as messianic peacemaker whose hand was tragically forced.is especially.ludicrous.

1. In case you've forgotten your history, SC shot first. Which is kind of important.
2. I think there's room between Lincoln as "aggressive firebrand agitator" and "messianic peacemaker". He was a complicated man. IMO, it wasn't just Lincoln's election that triggered the war, but all those Free Stater agitators being elected to Congress. Unless the South was set to give up on their slavery economy, conflict was inevitable once the Free Staters took office with a President who wasn't willing to veto emancipation.

His hand was certainly forced (tragically or otherwise). And the South wouldn't have rested until they provoked a war. Talk about stupidity. They had no more chance of winning that was than Japan did in 1941. Both losers wildly overrated themselves and their position.

The election of Lincoln itself was the "stupid" action precipitating what followed under this rubric.

It was a defensive move to prevent the slave states from insisting slavery should legal throughout the union.

"Contrary to your supposition, the U.S. Civil War is actually evidence for the wisdom of the approach."

If the South had voted Remain, the status quo would have endured. Slavery would have remained the Law of the land in the existing slave states. Certainly for years and probably for decades.

Is that a preferable outcome in your mind?

That depends on *how* it ends in the counterfactual scenario. If slavery were slowly phased out through a combination of purchasing freedom and declaring children of slaves born after a certain date would be free when they turn 25 (or something like that) then the long run outcome might actually have been better (even though the short term outcome for the men and women who were still slaves in 1865 would have been worse).

It would have been cheaper and more sensible for the North to simply purchase and free the slaves of the south but slavery wasn't the real motivation for the war. Like the American Revolution, the War Between the States was a continuation of the English Civil War, in this case a conflict between the Northeastern Puritans, descendants of Cromwell's Roundheads, and the Cavaliers of the South. If the immorality of slavery was truly an issue there would have been a focus on the extermination of native Americans and the appropriation and sale of their land. But there wasn't. Even Lincoln himself was involved in the Indian Wars. Evidently it's better to kill someone than own them. The methodology continues today as the Democratic Party cynically uses free blacks as political figureheads while ensuring that they collectively remain inferior and ignoring native Americans on their reservations.

Actually, Lincoln completely underestimated what was coming and spent most of the first month of his Presidency on interviewing local postmaster candidates and other hack politician trivialities. His Secretary of State William Seward was shocked by Lincoln's negligence and lack of focus on heading off or ameliorating the onrushing catastrophe.

Lincoln grew a lot in office, but in 1861 he was in over his head.

Steve is right about this.

Lincoln was a great orator but he wasn't necessarily the most skilled or experienced politician. He didn't have much political experiment. He had a whopping 1 term as a Congressman, a decade before he ran for president. That was the extent of his experience in the federal government.

We remember the Lincoln-Douglas debates but forget that Douglas ended up winning that Senate election in 1858.

There is ample evidence that Lincoln wasn't the brightest. His vice presidential pick was a doozy.

Lincoln was an amazing politician. His performance during the 1860 Republican campaign and convention was brilliant.

Governing a nation now, that's a whole other thing. Particularly one that is sliding into Civil War.

But you guys are right- it took him a few months to get his footing.

Shermanistic restraint is the technical term.

"In either case, it would have meant decades of additional years of slavery."

But the war meant 3/4 of a million to a million war deaths, vast numbers more injured and maimed, enormous expenditures on both sides, and massive physical destruction. The result in the south was decades of Jim Crow -- only a marginal improvement over the status quo ante. And, to top it all off, the war was ultimately fought with slave soldiers who sometimes violently resisted their enslavement. Was it really worth it? Having seen slavery peacefully ended in the British Empire just a couple of decades earlier, I don't see how anyone believe all that death and destruction was the best or only option.

The post-war Southerners weren't just bitter about their lost social status and personally racist against blacks, they also blamed the blacks for the war!

Black southerners were a constant reminder of the trauma of the war years and the losses they had experienced.

Gradual emancipation by 1880 would have undoubtedly lead to great racial reconciliation and better race relations by the early 1900s.

Granted, that's easy for us to say without chains on our legs and the masters' whips on our backs.

The conjecture that slavery in the American South would have persisted for "decades" if Lincoln had not waged a war of conquest is blind to the facts of why he actually waged the war, and blind to the reality of the direction of both economics and civil society during the period. Lincoln was a racist and he blatantly stated he had no desire to free the slaves, that the war was purely about forcing the Southern states to involuntarily remain in the Union. The Industrial Revolution was fast approaching, obviating slavery since mechanized production by skilled laborers would far exceed the productive capacity of the unskilled. Then there's the reality that every other civilized country abolished slavery during the 19th century without any wars fought over the issue.

Mechanical cotton pickers did not replace stoop labor until after WW II.

As my mom used to say, "an ounce of prevention is worth a pound of cure". Sorry, but it's just how I fell.

An ounce of pretension is worth a pound of manure :)

Given the history of Canada, I'm not sure we can say with certainty confidence that the American Revolution was a success for human liberty.

The US civil war was a disaster for the South.

On the other hand, the EU is free now to do smart things that the UK might have blocked. http://www.express.co.uk/news/world/684549/EU-cannot-rely-NATO-needs-new-defence-policy-chief

An EU army w/o the US, Canada and UK will be cute.

If it has a French panache and a German stalwartism it will be unbeatable. Of course, if the result is a German panache and a French stalwartism, the results might vary.

I would not want to brag, but Brazil has hundreds of thousands of soldiers and a big military budget. We have twice the number of 17-24 years old males as France and Germany combined. Brazil would be a great addition to an EU army if the europeans were to be farseeing enough to allow Brazil's accession. As the late tzar in the days of yore, Brazil could be Europe's watchdog and make the world safe for European values.

Serious question for you since you are on the ground: how is French Guiana doing being part of the EU? Do Brazilians ship stuff into FG and let FG take care of getting it to Euro markets?

I would guess French Guiana benefits more from being French, subsidies, the spaceport--the best one in South America outside Brazil's-- and all that, than it does aditionally from being "european". It sports South America's biggest GDP even if they barely have industry and their agriculture is underdeveoped at best.
I doubt there is much Brazil-French Guiana economic activity going on, except gold-smuggling (although I can be dead wrong, it is far from being my expertise area). The Brazilian regions bordering the Guiana are themselves dramatically underdeveloped, some of them have no proper roads linking them to the more developed industrial centers in the south, have low agricultural production and live under a subsistence economy or depend on the military bases--we are talking deep Amazon Forest here. There is precious little cultural or linguistic affinity between Brazilians and the Guianese, except maybe nominal Catholicism. The Guianese probably still remember Brazilians as enforcers of the Portuguese Empire conquest of the region during the Napoleonic Wars-- the fact that Brazilians, many of them unregistred gold miners, comprise a sizeable part of the local population and are frequently involved in fights with the local authorities and that Brazilian settlers in the past helped to take Bolivian territory probably doesn't help matters.
Maybe more to the point, even if Brazilians tend to neglect the French part of the name and consider French Guiana as an independent country-- the maps I learned geography with called Taiwan Nationalist China, but our teachers hardly mentioned that French Guyana is an overseas department and therefore France borders Brazil--, French Guyana is part of France and belongs to EU, which probably means that most of the protectionism that applies to Brazil's trade with France proper applies in the Guyana (except for subsistence goods as per treaty signed last year). I doubt any of the countries has interest in economic integration. In fact, Brazil and France spent tens of millions of dollars in a bridge between the two countries and after that Brazil posted armed guards to prevent people from using it. As usual, there are mutual recriminations-- the French don't demand visas for Metropoitan France but demand them from Brazilians trying to visit French Guiana.
http://www.nytimes.com/2015/12/08/world/americas/linking-brazil-to-french-guiana-a-bridge-for-no-one.html?_r=0

Why is Brazil so consistently stupid? I know you have a good chunk of low-IQ types, but so does the US.

Brazil is not stupid.

"Aye, it took five years and a ghastly death happening for Brazil and Argentina to subdue Paraguay."
Except that the Paraguayans did most of the dying, like, a lot of dying. And having the Argentines at your side (you forgot Uruguay, by the way) is like having the Italians, more a liability than an asset-- the Argentines were way more interested in fighting one of their little cibil wars than in helping us. Also, considering that it took Americans 10 years to be defeated by North Vietnam, three years to not subject North Korea, and fifteen years to not degeat the Taliban, I am pleased with Brazilian military performance. Maybe we should just count ourselves lucky Paraguay didn't try to rename itself North Paraguay. Unlike America we are neither a militarized society nor aggressor (as Brazil's Republic Proclamation Anthem says, "We are peace messengers"), we had to mobilize resources to evict the invader from our own territory and, after our efforts to achieve peace with honor failed due to Paraguay's dictator's stubbornness, we had no option left but trampling out the vintage where the grapes of wrath are stored and crush Paraguay with our moral superiority.

Okay. But why does your country look like it's still recovering from a nuclear war?

It doesn't at all. Radiation levels outside the cities that actually host nuclear power plants are probably much lower than in virtually any place of the USA. Suffices to say that Brazilians live longer than the British used to do when Thatcher became prime minister (and no one thinks London circa 1979 was a post-apocalyptic nightmare), which is much to say about a tropical country, and are taller and stronger than the average Japanese. In most of the country, life is safe, pleasant, harmonious and fulfilling. There is no denying, of course, that the 1851-1870 wars against the Argentines, the Uruguayans and the Paraguayans, where many of the country's best officers, engineers and the strongest slaves died in defense of the Fatherland somewhat destabilized the country, ending the Imperial regime itself, damaging the legitimacy of the state, causing civil wars in the South and monarchist rebellions in the Northeast, the rise and fall of authoritarian regimes and the limited reestablishent of slavery--de facto, not de jure-- in the North to make sure the country would be able to fulfill its promisses of suppling the Allies in our shared struggle against the Nazist hordes. Such political heavals, coupled with the droughts and epidemics of the early decades of the 20 th Century and the ones of the early 90's, throwed the country in a somewhat anarchic situation the country has slowly re-emerged from since. Nowadays, though, Brazilians can again look to the future with confidence and secure in the knowledge that "among the nations from the Universe
shines brightly that of Brazil."

It will have the Italians, too. And you forgot Poland!

I served with the Polish in Afghanistan. They actually have one of the most capable militaries in Europe.

They have good soldiers, which is a different matter. They have neither the population or the economic resources. It has, what, one-eight of Brazil's prime age male population and one-fourth of its GDP? They can help you to retake Bora Bora from a gang of fantical cavemen, but if you are serious stop the Russians, you must bring the big boys in.

@TR - lol, I can't imagine the Brazilians as capable in anything except samba and soccer, sorry. The thought of them doing serious fighting reminds me of a snapshot of Spanish fascists marching off with the Germans to fight in Stalingrad. You know they were almost certainly wiped out.

Aye, it took five years and a ghastly death happening for Brazil and Argentina to subdue Paraguay.

"Aye, it took five years and a ghastly death happening for Brazil and Argentina to subdue Paraguay.” Except that the Paraguayans did most of the dying, like, a lot of dying. And having the Argentines at your side (you forgot Uruguay, by the way) is like having the Italians, more a liability than an asset– the Argentines were way more interested in fighting one of their little cibil wars than in helping us. Also, considering that it took Americans 10 years to be defeated by North Vietnam, three years to not subject North Korea, and fifteen years to not subdue Afghanistan, I am pleased with Brazilian military performance. Maybe we should just count ourselves lucky Paraguay didn’t try to rename itself North Paraguay. Unlike America we are neither a militarized society nor an aggressor (as Brazil’s Republic Proclamation Anthem says, “We are peace messengers”), we had to mobilize resources to evict the invader from our own territory and, after our efforts to achieve peace with honor failed due to Paraguay’s dictator’s stubbornness, we had no option left but trampling out the vintage where the grapes of wrath are stored and crush Paraguay with our moral superiority. Even more to the point, today Brazil and Paraguay are friends and allies, we forgave and forgot its treacherous aggression, but will Americans ever walk Afghanistan safely without military convoys? We won a war we didn't want and, more important, we won the peace we needed. "Go and do likewise".

One probably laughs when thinking about the deterrent potential of joint European forces. And it is laughable, but the reason it is, is the same reason why such a army would make sense in the long term. The European nations basically have been sourcing their security out (more or less willingly) to the US. Over generations Europeans became accustomed to very low GDP percentages being spent on the defense.

https://en.wikipedia.org/wiki/List_of_countries_by_level_of_military_equipment

Germany barely spends 1% of GDP on defense.

America has 5,970 main battle tanks. Germany has a whopping 225.

America has 10 aircraft carriers. All of Europe has only 4. Italy's largest aircraft carrier is 1/4 the size of America's aircraft carriers.

America's fleet contains 72 nuclear submarines. Britain and France each have around 10 and Britain might be forced to abandon those for budget reasons.

Europe spends less money than the United States on defense and the money the Europe does spend is largely to maintain a big government jobs program. They're not actually spending money on serious hardware.

That's true. Even Greece has three electric-diesel subs they bought from Germany, while the Philippines, which really needs one, has none.

It could be argued that the US military and the associated defense industries is a huge jobs program.

Think it obvious, rather than arguable. The postwar military-industrial complex took my grandfather, sans most of a high school education, and made him an aerospace engineer, and correspondingly moved my family from a typical rural (or urban working class) income into the top decile. All the rest of us have done since is hold serve.

Perhaps more important than the lack of spending is the willingness or ability to define their enemy.

France happily built a nuclear reactor for Saddam Hussein in the 1980s; Spain, Portugal and Greece all had dictatorships decades after the end of WWII; and Germany's Schroeder embraced Putin and would otherwise capitulate to the slightest Russian aggression.

And of course not only did the French surrender to the Germans so quickly that the Nazis didn't know what to do with all the prisoners, the Germans largely invaded Russia with French trucks and the Petain regime sent Jews to Germany that the Germans didn't ask for.

The US and Commonwealth have in recent history been the only reliable defenders of liberty. Money is meaningless without understanding what's at stake.

"France happily built a nuclear reactor for Saddam Hussein"
Why not? It was the guy Americans were rooting for against Khomeini. He surely had a much better permanent record than those wonderful chaps, the Saudis. And America tried to win the public bid to build a nuclear reactor for the Brazilian generals, who were trying to get the bomb, so I doubt "freedom" is the issue here, American greed is.

"Spain, Portugal and Greece all had dictatorships decades after the end of WWII"
Is the point that the Portuguese should do penance for Salazar's dictatorship and not trade with the rest of Europe or that West Germany should have invaded Portugal--something even Hitler didn't?

"and Germany’s Schroeder embraced Putin and would otherwise capitulate to the slightest Russian aggression."
The Germans are not willing to die for Crimea or Kiev (neither are the Americans, it seems, or they would have already done the dying by now-- and I still remember how the Americans encouraged Saakashvili to fight Putin and how they sold out the Georgians afterwards--THAT was the time for bravado... or maybe something more useful). They are not even willing to lose money for Kiev or Crimea-- neither would I. It is above all a reason to stop expanding NATO (which is basically an American-driven issue) and the EU. Russian domination of France is an existential threat to Europe and the West, Russian domination of Ukraine is called Tuesday, preceded the Soviet Union by much and is, all things considered, a historical inevitability.

"The US and Commonwealth have in recent history been the only reliable defenders of liberty. Money is meaningless without understanding what’s at stake."
Considering how many dictatorships in South America-- just like the ones you seem to abhor in Europe-- could trace their origins to American interference and how Thatcher was in love with Pinochet and the Argentinian junta (until it proved crazier than the typical junta, I mean), it is a highly doubtful statement.

What you Fascists don't seem to understand is that the world doesn't owe to America becoming cannon fodder for her childish wars-- by the way, are Freedom Fries French again?

And up to a point, the US and other countries *wanted* it that way. Kind of hard to 'accidentally' trigger a continent wide war if you have to wait a year or more to mobilize a decent sized army. Of course, the cold war was another much bigger issue.

One word answer: INDIA

What inquiring minds *really* want to know are Tyronne's thoughts on the Brexit and EU...

+1 on that.

The Chinese Fascists surely are kicking... Hong Kong and Tibet.

Oh yes. Oh yes indeed.

Isn't Tyronne due back from a European sabbatical soon?

Just ask Ray Lopez. Same person.

Sometimes thinking like an economist is not the right thing to do. Sometimes you have to go the full Patrick Henry.

The Europe Project was always about binding Germany to France.

Of course, it's been a trying couple of centuries for France since the retreat from Moscow.

Increasingly, the 'binding' results in Germany subsidizing France. And more recently, other German-like countries subsidizing other France-like countries.

Allowing the British to listen to the likes of Hollande for a while seems like a good cure for Bregret.

I agree with this. The EU can survive without the UK; the only truly irreducible members are Germany and France (although obviously an EU made up *only* of Germany and France wouldn't be much of a European Union).

Finally, the masks are being taken off-

https://www.yahoo.com/news/time-elites-rise-against-ignorant-203628651.html

If this is true, who was wearing the mask?

"The Brexit forces won because cynical leaders were prepared to cater to voters’ paranoia, lying to them about the dangers of immigration and the costs of membership in the EU. Some of those leaders have already begun to admit that they were lying."

Now that Brexit has won, the focus is mainly on misleading statements made by Leavers. It's true that misleading arguments were made, and this is a bad thing.

However, cynicism, misleading statements, and scaremongering were characteristic of leaders on both sides of the debate. And the Remain side had the weight of government behind it, with official reports on the effect of Brexit that were biased at best, and government funds being used to send pro-Remain literature out to everyone.

It is not true that Brexit won because they were the only side that stooped to use dirty tactics.

Well, Mr. Hollande is cornered and it a good position at the same time. The good position is because "stupid" declarations will make him popular at home. Bashing the UK for no reason is a good move for now, no downside. At the same time, he is cornered into this stupidity. If he's not aggressive (stupid) enough, Le Pen and his team can get all the attention and shadow him. In a certain way, he's talking for many EU leaders. Politicians in power should pose a bit extreme to avoid being overrun by the real full-time nationalists.

It may not be the best for the EU-UK negotiation. But, what's worse? A messy EU-UK divorce or political crises due to perceived power void in other EU countries? There's already a power void in the UK. It wouldn't be nice to have the same situation in France, Spain, etc.

A power void in the UK? I think the establishment might have something to say on that score. No country ever really has a power void.

Most Americans don't know this, but Hollande is setting records for poor performance in office. A typical report reads "Hollande's Popularity Plumbs Record Low in French Opinion Poll". Hollande ran for office as a Corbyn (far left) candidate. Reality has not been kind. His economic plans collapsed almost immediately. He then tried the "Hillary" approach as an identity politics President. That made the cosmopolitan left happy. However, Charlie Hebdo and Bataclan killed that idea. Now he has nothing but a failed presidency to show for his time in office.

See "The Migrants of Calais" by Christopher Caldwell for an interesting article about failed borders and Hollande. Quote

"Socialist president François Hollande would seem to be in an impossible predicament. Hollande is the most unpopular French president since the Fifth Republic was established in 1958 — in large part because he appears to care little for anything besides the human-rightsy gestures that impress the limousine-liberal wing of his party: Putting women in the Panthéon to make up for the sexism of French culture in years past. Gay marriage. "Gender neutrality" in schools, so that all the plumbers in learn-to-read books are women and all the nursemaids are men. The promises to be tough on financiers and industrialists, meanwhile, have gone out the window.

Now Hollande is being summoned to duty by a frightened, patriotic, and impatient country. He has mobilized the army, declared a state of emergency, and called for the stripping of French citizenship from anyone found to have engaged in terrorism, all of this while continuing to insist on his identity as a man of the "left." Hollande reckons the FN will be the strongest party in the next election. His cynical strategy is to survive the first round by being as much like the FN as possible, and then to win the second round run-off by tarring the FN as so fascist and beyond the pale that all of Sarkozy's Republicans will be shamed into voting for Hollande — a delicate operation."

The current polling has Alain Juppe at about 35% and Marine Le Pen at 28%. Hollande's support is about half of Le Pen and he, Francois Bayrou (Europhile technocrat) and Jean-Luc Melanchon (red) have similar numbers. Be amusing if Hollande placed 5th.

Thanks, great article

I post WAY too much here. I need to get a life.

@Peter Schaeffer: that's the idea I tried to convey......but the difference between an skillful writer and the average blog commenter is quite evident ;)

If this is how they behave when exit is still a possibility, imagine how they will behave when the noose is tighter. Fence sitters will take note and plan accordingly.

I suggest that the very opposite is true. If you're in a partnership with someone prone to do stupid things, you're better off cutting ties early. If they're going to do stupid things if you leave, they'll do stupid things if you stay.

The key part is that they do stupid things. Might as well minimise your exposure to them.

Per IowaHawk-

People aren't mad at elites as much as they're mad at what currently passes for "elites."

It's like staying with a psycho girlfriend 'cause you're afraid of what she'll do when you break up with her.

Rationally you should stay with her and make it work. Is it really worth the risk of having 10% of your assets burned and her lying about you on Facebook?

Plus, she is kind of hot.

Well... on the one hand, if you stay with her, she'll still burn 10% of your assets and lie about you on Facebook.

On the other hand, we could replace "burn 10% and lie" with "kill you" if it's a psycho boyfriend.

You think a 'psycho boyfriend' hired Dan Markel's killer?

Is the UK going to be considered an apostate and treated worse than never-members Norway, Iceland, or Switzerland?

If so, this is a warning against anyone wanting to sign up.

Currently reading "Hitler" by Ian Kershaw. In the early years of the Nazi Party, Gregor Strasser and Joseph Goebbels were trying to put together a coherent platform:

“Of far greater significance was the fact that Gregor Strasser and Goebbels, especially, looked to the Community as an opportunity to reshape the party’s programme. Ultimately, Strasser hoped to replace the Programme of 1920. In November, he took the first steps in composing the Community’s own draft programme. It advocated a racially integrated German nation at the heart of a central European customs union, the basis of a united states of Europe.”

Yes, and in Hitler's Table Talk - incidentally about the best cure for insomnia I know - Hitler also talks about creating a Union in which each nation would be assigned a role to play in the future European economy. For example, Norway was to supply hydro-electric power.

Hollande seems to be going all-in on the "Let's make exit hurt as much as possible so no one else tries it" strategy.

Which is great, until the next country decides it's worth it anyway. Then you have to stab them too, and eventually you're at daggers drawn with everyone, Cersei Lannister-style.

Hollande seems to be going all-in on the “Let’s make exit hurt as much as possible so no one else tries it” strategy.

Ya think. It sounds more like the Blowhard strategy.

He just suffered a major defeat and he's gonna spend what's left of his career as Assistant Chancellor. I don't envy the guy.

Should Hollande review any credit for attempting to modernize France's labour and employment laws?

He is really afraid of the UK doing well post-Brexit and getting blown the fuck out by Madames Le Pen.

If the UK does well post-Brexit, the EU will have at most another 5 years from the point where people realize the UK is OK.

It is in every pro-EU pol's interest to crush Britain, lest they be left with no EU at all.

Perhaps he thinks the odds of an exit are not 100% and he's giving ammunition to those folks in the UK who'd rather not leave.

Does it not seem like he's doing the opposite?

Unfortunately, many of his collaborators are incentivised to betray him and cut a deal with Britain to preserve their favourable trade balances. Notice how Merkel is being more conciliatory?

Collective action problem in deterrence punishment!

So Hollande makes a quintessentially EU-y despotic remark. But TC blames brexit for triggering it.

I'm waiting for TC to say, "If you're a girl going to a party, it is worth asking the simple question: 'what clothing and behavior is likely to induce the actions I want from the boys at this party?' That won't always always give you the right answer about what to wear and how to behave, but often it is a good place to start."

Since approximately 100% of girls already ask themselves this exact question before going to a party, what exactly is your point?

Just curious, can you "handle clearing operations for the eurozone" in NY right now?

Yesterday did you think it was "despotic" that you could not?

The despotic part is Hollande believing he can simply decree the outcome, instead of following a rule of law.

To be honest, I have no idea if there is a law governing the situation of clearing, but Hollande didn't reference one.

Brexit will be blamed for virtually everything bad that happens in the foreseeable future.

If Hillary wins, the resulting 4 additional years of economic stagnation will be entirely due to Brexit.

"Merkel has the better instinct of simply talking to the British calmly and trying to es-escalate the issue."
OK, surely it is nice of her to talk to the British using soothing tones as if they were frightened children or a rabid dog, but I fear the question that matters to the British is, will they be able to have the clearing taking place in UK, yes or no?

My guess would be that Hollande can only be talking about clearing of physicals. Derivatives and futures can be cleared entirely outside the euro area, and the euro area would have nothing to say about it. In fact, futures and options don't even need to be denominated in euros.

In other words, he's talking about clearing a few hundred billion out of hundreds of trillions.

This implies that the best way to prevent changes you do not want is to be stupid.

Nor do I think that a genuine love of freedom is ever quickened by the prospect of material rewards; indeed, that prospect is often dubious, anyhow as regards the immediate future. True, in the long run freedom always brings to those who know how to retain it comfort and well-being, and often great prosperity. Nevertheless, for the moment it sometimes tells against amenities of this nature, and there are times, indeed, when despotism can best ensure a brief enjoyment of them. In fact, those who prize freedom only for the material benefits it offers have never kept it long.
Tocqueville, The Old Regime, "How the desire for reforms took precedence on the desire for freedom"

What about "no taxation without representation"?

Putin and Obama are not men to do stupid stuff.

No, Obama's a hapless putz. He never quite gets held accountable for it.

Is it victim blaming to assert that Serbia should have just accepted Austro-Hungary's demands?

Or that Austro-Hungary should have let good enough alone?

As I recall, Serbia pretty much did accept Austria-Hungary's demands. It didn't work.

They rejected one of the demands.

I think they just asked for more time on the last one.

The Austro-Hungarians, for whom the demarche was just a pretext for a causus belli, were outraged at Serbia's submission and declared war on them anyway.

As long as the EU has a single market and currency, Germany will inexorably accumulate a lion’s share of wealth and productive capacity and other countries will become its clients. Britain will lose what is left of its industry and eventually the City of London’s status as a financial center will go.

Somehow Switzerland and Canada, which have considerably smaller economies than Britain, manage to house financial centers without being part of the EU.

They're not global financial centers like the City of London or Wall St. The Swiss and the Toronto exchange especially are relative backwaters.

Bob's right.

The market cap of the London Stock exchange is 4X larger than that of Toronto or Zurich.

0.3% of global foreign currency reserves are in CHF Vs. 3.5% in GBP. The Swiss position can be desirable for African or Latin American countries, for the UK is a step down.

Obama really messed up Libya, but what dumb things has Putin done? His lackies shot down a fucking civilian airliner full of NATO citizens and he was not held accountable whatsoever. If that's not strength I don't know what is.

Until one have travelled on other man's shoes for a while, how to pass judgment on a fellow human? Sorry, but it's just how I feel.

" in many spheres of life, is simply that big changes can induce a lot of stupidity from the other players in the system"

Well said...Just look at the number of time stupid tea party members have tried to pass Obamacare repeal bill in House since 2010. Is the count now at 50? Exact same bill...

What is it about the cosmopolitan progressive mind that loves monopolies?

The fantasy of control and having the ability to design the outcome utilizing the power of the state.

They often find, to their dismay, that human beings can be rather obstinate and noncompliant, holding this silly notion that they should determine their own outcomes.

"What about the American Revolution" is not necessarily a good counter-argument to "Be (generally) conservative when it comes to big changes". Consider the possibility that the outcome could have gone very differently. In fact, the outcome we got--a stable superpower--might have been very, very unlikely and thus not a good role model for "embrace the revolution!" today...

The question to ask is what sort of life makes sense in the long term : one where questions are posed and answered by technocrats, or one where they are posed and answered by those who live near you and speak your language.

You mean the National Front?

The only way to hurt England and not hurt Europe more, would be to pull Scotland away. But if Scotland is pulled away, then Catalonia can leave Spain, and if Northern Italy wants to leave Italy, and if Belgium wants to split...the EU would be maneuvered into a policy of supporting nation state breakups. It is a good policy for the EU, since more weaker powers are less able to resist the EU Commission, but it also would make countries such as Spain more likely to bolt to block secession.

I am shocked, shocked that there is gambling here !!! In Casablanca as Louie leaves with his winnings...

Maybe a bad analogy but I am shocked, shocked that Hollande is "stupide".
Bonne chance to brave Brits.

American establishment is angry becouse has lost its trojan horse in EU

We're more use to you outside than in.

We lost 72 out of 72 votes when opposing a measure in the Council (we won some favoured ones). Britain has the worse influence record in the entire EU. No economist who can calculate Shapley values could possibly think the price of influence was worth it.

This has me wondering if the Europeans generally even like each other enough to attempt a union like the EU. It seems the EU may mostly an awkward dance pretending to pursue unity while mostly attempting to get the upper hand on rivals?

“The City, which thanks to the EU was able to handle clearing operations for the eurozone, will not be able to do them,” he said. “It can serve as an example for those who seek the end of Europe . . . It can serve as a lesson.”

Seems pretty clear from the latter half of that sentence that the target audience was not "London's financial elites" but other potential exiters who were getting skittish. You can argue whether or not this will work, but it hardly seems to be clearly "stupid."

Hollande and stupid? Nah, I'd say ignorant, complacent and starry-eyed. He embodies everything that is wrong with the EU. As does Juncker and Martin Schmidt. In Hollande's case, also what is wrong with the French establishment. And let's not forget: The EU of today is basically a French political-philosophy applied.

People, who allow themselves to bully others because of a righteous cause are bad. But even worse are those, which because of their glaring righteousness don't recognize their bullying even technically as being bullying. Or comparable to bullying.

Yeah. The passive-aggression and self-righteousness of the European elites is pretty over the top. Just listen to their speeches (if you can stand the turgid prose).

"Friends, we must have more Europe to meet this crisis caused by divisive voices of nationalism and xenophobia! Solidarity, brotherhood, peace, plenty, and freedom will be our common European destiny due to our great achievements in the Union....Give me more power and money that I can make this happen or I will hit you."

The passive-aggression and self-righteousness of the European elites is pretty over the top.

Not up to the BO standard, I'll wager.

So, telling one group of VSPs to pack sand just lets the Very Silly People run the show, and, well... It's worse

To steelman Hollande:

* Scare the UK into backing down on Brexit (not worth it in my view);
* Shift the Overton window to make it more likely you'll get what you want;
* What does it matter to him what the UK public thinks? It's all BATNAs now. The remaining EU should fight its corner to show its own citizens it has their interests at heart.

Sounds like a great endorsement of Obama's "don't do stupid shit" argument.

The man who put his imprimatur on the Iran 'deal' has no objection to stupid shit.

Doesn't take much to make your knees knock.

Man up

I wonder what the kosher Pope thinks of the Iran deal.

http://www.novusordowatch.org/wire/francis-hides-the-cross.htm

It occurs to me that we have come to a moment of .. Wile E Coyote racing off the cliff, standing on air, and realizing it.

At first American populists took heart at Brexit. They even declared "butt hurt" on any "liberals" who worried about it. They were winning after all.

Now, not so much. If it turns out that Brexit has negative and apparent consequences, the whole "in your face elitists" thing might be set on a back foot.

Am I right?

No—you are butthurt. In your face, loser.

I guess the tricky bit is that you don't actually care what happens to Britain. It is worth it for you as a symbol now, in June, even if their economy blows up and faces recession in September. Of course, it might then have impact on populist movements around the world.

If you actually care, and you are not idiots, explain how you British avoid a short term economic crisis.

(That is, if the British don't just wiggle out of doing a Brexit)

I haven't noticed any pro-Brexit Americans changing their minds. I haven't noticed any prominent pro-Brexit Britons changing their minds either (though there are news stories about random voters who regret it because they didn't think it would actually win, etc.).

As for the real consequences, it is far too soon to tell. The markets and pound have gone down a lot, obviously, but that is because of the uncertainty about the future consequences (and political uncertainty in UK). It is still all about predictions of what is going to happen, rather than what has actually happened. Until the UK and the EU start approaching a concrete deal, the long-term consequences won't be clear.

Or check the home price index by the end of this year. http://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/housepriceindex/2015-06-16

Guh. In the past month, you have been bloviating about how great democracy is.

I don't feel strongly either way about Brexit, and it's probably not a big deal in the long run either way, but...isn't democracy just keen?

Organizing a foreign policy around the preferences of those actors who best present themselves as stupid and prone to over-reaction seems like a brilliant plan, one which could not possibly go wrong.

Certainly no moral hazard to rewarding stupidity and aggression, no sirree!

I'm just so disappointed in Tyler RE Brexit. It has made me re-evaluate nearly everything else he says.

You don't have to love the EU or its bureaucrats to believe that a precipitous move has more risk than reward. That is, basically to take the Scottish position.

Of course. There is a legitimate argument for Remain.

I don't have a problem with Tyler being pro-Remain. But I am surprised and disappointed by how he has rejected and/or ignored the opposing arguments in this case. For months he was calling Brexit "The Donald Trump of England"--i.e. fundamentally unserious, with no real arguments. See also his recent post which totally ignored economic and governance case to say the result was all about anti-multiculturalism (England wanting to stay English).

One of the things I most like about this blog is how Tyler encourages humility about one's own viewpoint, as well as understanding opposing viewpoints and how they might be right. It seems there are limits to this, however.

One hears a good deal of English in Paris. Those people are tourists. One hears a good deal of French in London. Those people are ex-pats.

"Stupid" is not really an insult if it is widely shared. Even physicists who comfortably and profitably enjoy PDEs and interesting integrals feel stupid when measuring the sum of what they know from thought and experiment against the other more impressive sum of what could easily be known with more inspiration, to use the least inaccurate word (inspiration). Rich and well-connected European people in our time probably do feel distress at not being able to fairly consider the benefits of changes that would make them, as individuals, less rich, but they love their families and don't want their families to live in poor or middle-class neighborhoods, so they ignore that distress. That is not unadmirable, is it? The old saying is that it rains on the just and the unjust (rain in the original Hebrew is not a negative word!) but the saying that God loves us the way we are but loves us too much to stay that way is not found in the Bible.

Setting Brexit/Bremain aside, this principle sounds like it would make you subordinate to those most prone to acting stupidly, especially at longer time horizons.

What's stupid here is an American reading an article in the FT and thinking he is well informed.

Hollande has every right to pronounce on the clearing houses. It's not being a "sultan". It's being the democratically elected head of a country defending what pretty much everyone in that country believes. Very few on the continent thought the EU court got it right when it said euro clearing could remain in London, and obviously with Brexit pretty much everyone on the continent wants to push for a better solution asap. The only real decision is whether it will be Frankfort or Paris instead of London.

"to the general citizenry it confirms the portrait of the EU as an anti-British regulatory tyrant." Oh boo hoo hoo. Especially because the (British) general citizenry are largely a bunch of idiots, and in any case they will soon no longer be part of the EU.

" and at such a delicate moment" WTF? This is post-Brexit, not pre-Brexit. The Brits have voted, or haven't you noticed?

If you want to mention someone who was stupid at a "delicate" moment, think Obama who, you may remember, came to the UK and told the Brits to vote for Remain in the run-up to the election. This interference in the sovereign choice of the British people was first of all arrogant. I was never in the Obama-thinks-he's-the-Messiah camp, but I am now. As if the Brits should actually have cared what the President of the US thinks. European leaders at least were discrete; but not the idiot Americans! Obama's interference was the beginning of the end, by creating the impression that were no good arguments to Remain.

I agree that Obama's intervention was dumb and probably counterproductive for Remain. However, I don't think Obama inserted himself into this debate; Cameron requested him to do this. See here for example: http://www.politico.eu/article/how-david-cameron-lost-brexit-eu-referendum-prime-minister-campaign-remain-boris-craig-oliver-jim-messina-obama/

People can disagree whether Hollande's pronouncement was "stupid", but I don't think your implication that Tyler did this out of ignorance is warranted.

+1 Obama, whatever you think of him, is still very popular in the UK (https://yougov.co.uk/news/2016/04/23/public-obama-eu-debate/) and I doubt he turned the tide away from Remain, and it was obviously he was doing it at Cameron's behest.

The lack of good arguments for the EU was a lack of good arguments for any part of the EU other than the Single Market. No one in British politics was willing to make the case for the actual EU institutions - the Commission, the Parliament, the Judiciary. Quite rightly as these institutions have been taking power for British politics, and clearly no one in British politics was willing to stand and say "Actually, it is a good thing we have less power over you, and that in general democratically elected leaders have less", even if they believed the EU institutions were anything other than dysfunctional.

It's not got anything to do with what Obama did or did not do.

The detailed polling analysis suggests Obama intervention was mildly counterproductive.

The people who love O about here are all ardent remainer types. He had a lot less respect in the swing electorate.

"Very few on the continent thought the EU court got it right when it said euro clearing could remain in London"

That's not what should matter. A referendum is pretty much the only thing where all of the population should have a voice, and more precisely, one person, one vote. And look at what happened with that.

What matters to the EU court should be the law, which often is quite different from what lots of people think.

Hollande is an idiot indeed.
But so is anyone who thought Europe's reaction would be pragmatic and non-emotional (when a Brexit vote wasn't).

When the leaders in power become so contemptuous of alternate views that reasonable people are condemned for heresy when suggesting alternatives, it is impossible to change except with unreasonable tactics and immoderate leaders. The Euros never took the issues that motivated many Brexiters seriously -- so only those willing to be non-reasonable took up the cause.

Same with Trump. Since moderates could not successfully propose and enforce reasonable controls on immigration or even discuss nationalist positions without being sneered at and worse, it was inevitable that a Trump would emerge. Those screaming fascism now will eat their words when the real fascists start to emerge if these issues are not dealt with -- Trump or no Trump.

Tyler today: "For many international policy issues, it is worth asking the simple question: 'which action or inaction of mine is likely to induce the smallest number of stupid actions in response?' That won’t always give you the right answer, but often it is a good place to start."

Cass Sunstein from Tyler's conversation with him a few days ago: "So the economic analysis of law has had many good ideas. It’s had one great idea — like, world-transforming idea, I think. And the idea is, when you’re stuck, minimize the sum of the costs of decisions and the costs of errors. Now, that is not gripping stuff. But it’s profoundly true that if you don’t know what to do, figure out either a meta-rule or a particular decision that makes error costs low, meaning the number and the magnitude is small, and that makes decision costs low, meaning you don’t have to drive yourself crazy."

I'm not really making a point... just found the echo interesting.

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