No!

I presume everyone knows by now, but I haven’t seen other bloggers discuss the election.  The Scottish independence campaign lost badly.

That’s probably why the Spanish stock exchange was up sharply earlier today. Markets are the first to know.


Tags:

 
 
 

34 Responses to “No!”

  1. Gravatar of Major.Freedom Major.Freedom
    18. September 2014 at 18:16

    The votes of anyone other than Scottish citizens should count as nothing, zero, nada.

  2. Gravatar of Tom Brown Tom Brown
    18. September 2014 at 20:22

    I guess all the vexillologists out there will be denied a rare bit of excitement then, … because there’ll be none of this or, more importantly, this.

  3. Gravatar of Robert Robert
    18. September 2014 at 20:26

    I don’t think they lost badly. Three weeks ago it looked like it was going to be a clear no, by far more than the current results indicate. But 45% or so of the Scottish people (with a very high turnout) have rejected one of the most fundamental parts of the British constitution. That is an astonishing success for the nationalists, and could be the start of a British constitutional revolution. It has only just started.

  4. Gravatar of Mike Sax Mike Sax
    19. September 2014 at 03:20

    It looks like you were one of the first if not the first to put this out here-I certainly ‘heard it hear first’ on your site, so Kudos.

    Of course I still don’t agree on the multiplier but good job here.

  5. Gravatar of Mike Sax Mike Sax
    19. September 2014 at 03:36

    Even if ‘everyone know by now’ I didn’t at the time and when I looked for it after reading this last night I didn’t see it mentioned anywhere so I stand by your Kudos.

  6. Gravatar of ssumner ssumner
    19. September 2014 at 05:32

    Robert, Fair point. I should have said lost badly relative to recent polls, which showed the race closer. It was viewed as too close to call. There were enough yes votes to press Westminster to give up some additional powers to Scotland.

    Thanks Mike, I just assumed there were no secrets with the internet.

  7. Gravatar of Steven Kopits Steven Kopits
    19. September 2014 at 06:07

    The ‘yes’ vote lost decisively, but not badly.

    Personally, I am baffled that one can break up a country on a simple majority vote. Such a decision, to my mind, is on the level of a constitutional amendment, ie, it should require 60-67% yes votes to pass.

    Also, note that seniors overwhelmingly voted to stay in the Union (just as the young voted to leave). They had good cause to think their pensions were at risk. As Scotland ages, this sentiment–or rather demographic–will only strengthen.

  8. Gravatar of Tom Brown Tom Brown
    19. September 2014 at 06:53

    Wait… what? Mike Sax praising Scott Sumner, and Sumner thanking him. Is this one of those alternate universes I keep hearing about?

  9. Gravatar of W. Peden W. Peden
    19. September 2014 at 06:54

    It was a bad result for the nationalists given that (a) they were almost universally regarded as having fought a great campaign, (b) their opponents were almost universally regarded as having fought a very poor campaign, (c) the nature of the campaign (e.g. with 16/17 year olds having the vote) favoured them, (d) the timing of the campaign HUGELY favoured them in several ways. And yet they still couldn’t win.

    The raw results don’t really express how much of a disaster this is for them. It’s as if Ronald Reagan had lost in 1980 to the extent that Barry Goldwater lost in 1964.

  10. Gravatar of W. Peden W. Peden
    19. September 2014 at 06:56

    Also, the nationalists put a huge emphasis on a “get out the vote” strategy, which seems to have backfired in that while they got a huge turnout (unprecedented in our history) they actually did considerably worse than expected.

  11. Gravatar of mbka mbka
    19. September 2014 at 07:01

    I’m a cosmopolitan. I don’t get why people would want any countries to begin with, let alone many many tiny little “my own” countries, isolated from other “foreign, stay outside” countries. It baffles me.

  12. Gravatar of Tom Brown Tom Brown
    19. September 2014 at 07:06

    Mike, Scott, … everyone: thank God it’s over. Now it’s time to put this vote behind us, re-open old wounds, and get back to normal.

  13. Gravatar of Steven Kopits Steven Kopits
    19. September 2014 at 08:00

    W. –

    I don’t consider this a bad outcome for the nationalists. But at the end, worriers like myself started counting all the complexities of breaking up. The costs and unknowns are formidable. Scotland leaving the UK is not merely an administrative matter. England and Scotland have been joined for centuries. Severing these bonds is a Big Deal, and I think voters were increasingly sensitized to that.

    For the nationalists, I think they have to make a more thoughtful, policy analysis kind of case. I don’t think it’s enough to just promise that everything will be OK, don’t worry. If you want to split off Scotland, it will require a deeper analysis of costs and benefits. That’s the nationalists remit now, as I see it.

    Emotionally, I was against the break-up, in large part because I think it was not well thought through, and because of its implications for Ukraine.

    But more than a quarter of Scotland’s labor force works for the government, and one suspects that’s because of south-to-north subsidies, including government work programs.

    And independent Scotland would force it to consider the internalized costs and benefits of its public policies, which could have led to becoming a more market-oriented country over a number of years. It could have made Scotland more like Ireland.

    So, I’m not necessarily anti-independence, but if one is going to take that route, the path should be prepared thoroughly and well in advance.

  14. Gravatar of TravisV TravisV
    19. September 2014 at 08:17

    Barclays Is Calling It: The ECB Is About To Finally Join The QE Party

    http://www.businessinsider.com/barclays-ecb-to-launch-qe-2014-9

  15. Gravatar of TallDave TallDave
    19. September 2014 at 10:01

    Shrug. There’s always next year.

    Also, they made significant gains with just by credibly threatening secession.

    Good news, TravisV. OTOH being the ECB, they’ll probably find some way to make the net effect something between nothing and contractionary.

  16. Gravatar of W. Peden W. Peden
    19. September 2014 at 10:38

    Steven Kopits,

    I don’t disagree that an indy-Scotland could and should have become a North Atlantic Switzerland, but that wasn’t what was being proposed. What was being proposed was a constitutionally social democratic state, based on the proposition of getting rid of market-orientated policies and politicians forever, and potentially with unelected socialist politicians like Colin Fox and the Radical Independence Campaign being brought into the drafting of the constitution. Would even Americans have been in favour if independence in 1776 if the constitution was to be drawn up by the centre-left, the left, and the hard left?

    So quite apart from the currency problems and the EU problems and my very large sense of Britishness, what was on table was not independence. What was on the table was a future in which social democracy would be the furthest right that the political spectrum could feasibly go.

  17. Gravatar of W. Peden W. Peden
    19. September 2014 at 10:40

    And it’s hard to imagine a much worse outcome for the nationalists given how well they campaigned. They spoke very well to the 40% or so of Labour voters who are receptive to the idea of an independent socialist/social democratic Scotland. Unfortunately, that wasn’t nearly enough for them to win, and closed off huge swathes of voters.

  18. Gravatar of TallDave TallDave
    19. September 2014 at 11:06

    a constitutionally social democratic state, based on the proposition of getting rid of market-orientated policies

    There are two benefits to this. One, that state’s failures will be hard to ignore. Two, the rest of the UK loses voters who tend to prefer that kind of government.

    The biggest problem in liberal democracy is voters who don’t understand the impact of their preferences. The more localized the polity, and the more competing polities with different policies, the more voters learn.

  19. Gravatar of W. Peden W. Peden
    19. September 2014 at 12:35

    TallDave,

    HAVING a social democratic government has the first advantage, although often what can happen is that the politicians get blamed rather than the policies, which is how Scotland for a long time had three barely-distinguishable social democratic parties with most of the vote. However, if you have social demoracy fixed into a written constitution, it is very hard to change it.

    Detailed research suggests that Scots don’t favour social democracy to a significantly greater degree than England, let alone Wales and Northern Ireland. The rUK would get rid of the social democratic politician whom we send down south, but I struggle to see this as a major reason why I, as a Scottish person, ought to vote for independence!

    Again on localization, that’s fantastic BUT not identical as devolving spending/tax powers. The effects you’re talking about depend, in large part, on places fully financing themselves. Decades of misrule in many British cities hasn’t stopped them from being hardline left-wing Labour voters in their local government, because these cities receive subsidies to fund the local government largesse. That was the old Thatcherite argument for dismantling the old system of local government, in which large tax-raising/spending powers were devolved to places that also received massive subsidies from the central government.

    So I’m not disagreeing with what you’re talking about in either case, but it’s rarely been on offer, and wasn’t what was on offer to Scotland yesterday. We weren’t even being offered escape from the narrative of “It’s England’s fault”, since macroeconomic policy under a currency union or sterlingisation would be blamed on the English.

  20. Gravatar of ssumner ssumner
    19. September 2014 at 12:41

    mbka, Let’s hope that countries gradually wither away. They are actually a fairly recent invention.

    TallDave, You mean there’s always next century. The UK won’t allow another vote in the near future.

  21. Gravatar of James in London James in London
    19. September 2014 at 13:17

    Hey, Scott!

    Have you heard? A Chinese internet company has just listed in the US for more than the combined value of Amazon and EBay. (Am being a bit ironic.) More seriously, it is pretty remarkable for a country that is a communist dictatorship to produce a company like this. Though also speaks for some structural problems back home that it didn’t list in Shanghai or Shenzhen.
    http://www.bloomberg.com/news/2014-09-18/alibaba-group-said-to-raise-21-8-billion-in-record-u-s-ipo.html

  22. Gravatar of W. Peden W. Peden
    19. September 2014 at 14:04

    Scott Sumner,

    I can’t see the UK government blocking an independence referendum run by a Scottish government which was elected promising one. After the 2011 election, the actual granting of a referendum was not even an issue. It’s a totally different situation from Spain today or the US in the 19th century, when blocking secession was seen as an option.

  23. Gravatar of TallDave TallDave
    19. September 2014 at 14:26

    However, if you have social demoracy fixed into a written constitution, it is very hard to change it.

    Nah, you just amend it, or have a referendum on a new constitution. Happens all the time. I agree the 2014 Scottish constitution would probably have been terrible, but in its very terribleness lies its salvation.

    The UK won’t allow another vote in the near future.

    What are they going to do, occupy Glasgow and quarter the SNP leadership? If Scots want to have the vote, they’ll have it.

    Centralization of power made sense in the past for security reasons. Decentralization is the natural response to the lessening of those concerns.

  24. Gravatar of W. Peden W. Peden
    19. September 2014 at 15:40

    “Nah, you just amend it, or have a referendum on a new constitution. Happens all the time. I agree the 2014 Scottish constitution would probably have been terrible, but in its very terribleness lies its salvation.”

    Those are tremendous assertions without evidence. It’s hard enough rolling back the frontiers of the state through the usual democratic channels, given special interests and the tyranny of the status quo.

  25. Gravatar of TravisV TravisV
    19. September 2014 at 19:37

    “It’s Not 2008 For Chinese Companies “” It’s Worse”

    http://www.businessinsider.com/chinese-companies-in-worse-shape-than-2008-2014-9

  26. Gravatar of am am
    20. September 2014 at 02:35

    Don’t get the comments that the yes group were proposing a move from market orientated economies. Part of their budget plan for an independent Scotland was to reduce corporation tax by 3 per cent compared to the rest of the UK. The Scottish Stock Exchange and Bonds market would have been set up in Edinburgh pretty promptly if an independence vote had been successful.

    Salmond, who announced his resignation yesterday as First Minister and also leader of the SNP, has said it was a once in a life time vote. It won’t happen any time soon. Even if it does, say in another 20 years time, the oil revenues will be more clearly reduced and they just won’t be able to fool people with empty and unrealistic rhetoric as they did this time.

    Scotland may get concessions from Westminster but I doubt it. Part of the fallout of the campaign was that Scotland is relatively advantaged in comparison to the rest of the UK. Now the West Lothian question and the English backlash is appearing. The Welsh also are saying they are not to be disadvantaged by any concessions to Scotland. As yet, there is no sign of a remainder UK referendum to expel Scotland from the Union on the remainder UK’s terms.

    The yes campaign floundered on the economy and the currency. On the former they picked the highest return on estimated recoverable barrels of oil despite the OBR and the other organisations referred to in mainlymacro. On the currency they were in utter confusion. It was just about 2 weeks before the election that they eventually gave their options on currency. It was a confused mishmash of hanging on to the remainder UK currency without any monetary control. Salmond to get to the stage of the vote used the slogan: It’s Scotland’s oil. During the referendum he then started to say: It’s Scotland’s pound.

    The Scots have a song sung on certain sporting occasions speaking about King Edward’s army and sending home to think again. The nationalists have been sent home to think again.

  27. Gravatar of W. Peden W. Peden
    20. September 2014 at 04:13

    am,

    The corporation tax suggestion was barely mentioned in the campaign (except occasionally by the unionists) and the focus was on greater welfare spending, nuclear disarmament, putting universalist public services into the constitution, and creating a more homogenously social-democratic electorate.

  28. Gravatar of ssumner ssumner
    20. September 2014 at 05:23

    James, I agree, but you should put “communist” is scare quotes.

    TallDave, You said;

    What are they going to do, occupy Glasgow and quarter the SNP leadership?”

    Yes, the British would never send troops to one of their own cities, like Glasgow or Belfast.

    And what if Barcelona tries to leave Spain? Won’t Spain send troops?

    Obviously you may be right, but it would be really odd for a country to put up with these sorts of things again and again. That’s never happened in all of world history. It’s in or out—make your decision. And the Scots just made their decision.

    AM, I agree with W. Peden’s reply.

    Maybe England should vote on leaving the UK.

  29. Gravatar of ssumner ssumner
    20. September 2014 at 05:25

    TallDave, I’d add that Quebec lost its vote by an even closer margin (51/49?) and never had another vote.

  30. Gravatar of TravisV TravisV
    20. September 2014 at 07:14

    Nick Rowe: “Brad DeLong has a post on the fall in US expected inflation, as estimated by the spread between real (indexed) and nominal (non-indexed) bonds. There is a big downward spike in 2008. At the trough, the implied expected inflation rate for 5 years was minus 2% per year.

    Brad says that downward spike is because real bonds are less liquid than nominal bonds, and there was a liquidity crunch in 2008, so the liquidity premium increased, so we should not interpret that spread as saying people expected 2% deflation. That’s almost certainly part of it. But I wonder if a big part of it was that people really were scared of a big deflation. Not that they thought it probably would happen. But they thought that the risk that it might happen was well above zero.

    I thought a big deflation might happen. When I was most scared, I was very scared.”

    http://worthwhile.typepad.com/worthwhile_canadian_initi/2014/09/how-scared-of-deflation-were-you-in-2008.html

  31. Gravatar of TallDave TallDave
    20. September 2014 at 08:09

    Those are tremendous assertions without evidence.

    Shrug. GIYF. Most countries that have adopted constitutions in the last half-century have made major changes to them. Even in the United States, the interpretation of our Constitution has changed markedly in numerous respects.

    Yes, the British would never send troops to one of their own cities, like Glasgow or Belfast.

    Again, to do what? Draw and quarter the SNP leadership? This isn’t the 1700s.

    Quebec lost its vote by an even closer margin (51/49?) and never had another vote.

    Yet. 🙂

    if Barcelona tries to leave Spain? Won’t Spain send troops?

    Again, to do what? Shell one of Europe’s cultural centers until they surrender? I guess we’ll find out, they’re holding a vote this year.

    http://en.wikipedia.org/wiki/Barcelona

    The YES crowds only have to win once; in the absence of security threats this is the natural course of history. In any case, even the threat of these votes tends to release significant concessions of devolved powers and autonomy.

  32. Gravatar of TallDave TallDave
    20. September 2014 at 08:14

    It’s hard enough rolling back the frontiers of the state through the usual democratic channels, given special interests and the tyranny of the status quo

    I think that’s largely true, but again, the only real long-term solution to that problem is a multiplicity of competing polities to expose the failings of statism and central planning. The breakup of the USSR was only the beginning of a larger, salutary trend.

  33. Gravatar of TravisV TravisV
    20. September 2014 at 16:18

    Excellent October 2013 analysis by Hummel that I can’t remember any Market Monetarists commenting on…….

    “The Myth of Federal Reserve Control Over Interest Rates”

    http://www.econlib.org/library/Columns/y2013/Hummelinterestrates.html

  34. Gravatar of ssumner ssumner
    21. September 2014 at 11:27

    TravisV, Hard to say, I certainly didn’t expect 2% delation for 5 years.

    TallDave, Does that also apply to Texas?

Leave a Reply