Family tradition says my relatives came from Ireland, Scotland, Germany, and Denmark – so I’m probably a typical American mutt. As an Irish-American I learned early about London’s disgraceful treatment of its first colony, Ireland. Indeed, but for London’s malign neglect my Irish relatives would likely never have emigrated and I would not exist. I cannot, therefore, claim objectivity when it comes to the subject of independence for Scotland. While I have no right to tell Scots how they should vote I would personally vote for independence.
My focus is on how the Tories are seeking to intimidate Scots to vote against independence. The point is made in the title of a recent New York Times article: “Scots Are Divided Over Independence, and Its Economic Costs.”
The title presupposes that Scots would pay a price for independence, though it could well save them hundreds of billions of dollars even in the intermediate term given Tories continuing embrace of the “regulatory race to the bottom” that the City of London “won” – making it the epicenter of elite financial fraud that cost tens of millions of jobs and scores of trillions of dollars of lost GDP. All of the economic studies cited by the NYT ignore these, vastly larger, costs of failing to vote for independence. The best possible action Scotland could take to minimize future costs would be to pull out of this insane regulatory race to the bottom that caused such immense damage to Scotland and will cause it even greater harm in the future if it votes against independence.
The title of the NYT article also presupposes that the focus should be on costs. Historically, people seeking independence have not focused on “economic costs” while those opposing independence have made economic cost their paramount focus. The first line of the article phrases the issue not as “independence,” but as “tearing apart the United Kingdom….”
It turns out that the article stresses the neo-liberal views of big corporations and their nonsensical means of evaluating “cost.”
“[M]any business leaders and economists … are concerned that an independent Scotland will not have the financial strength to prosper alone. The economy would lean heavily on revenue from North Sea oil, which has been falling, and its per capita government spending outpaces the rest of Britain ….”
So, Scotland supposedly lacks “financial strength” because it has a great deal of oil revenue, but that amount is falling. That is not a “cost.” Scotland’s “per capita government spending” is greater than [Tory] England. That is not a “cost.” Given that Tory England put the UK back into a gratuitous recession through its insane austerity regime, Scotland’s spending has been one of the vital contributors to the UK’s economic health.
The NYT article is so financially illiterate that it is unintentionally hilarious. It admits that the Scots are furious at the Tories self-destructive austerity – but treats the Scot’s vastly more intelligent policy – a policy that has aided the UK recovery from the self-inflicted wound of the gratuitous austerity-induced second UK recession – as a “cost.” Then comes this inane passage:
“The financial implications weigh heavily on the debate. Top British government officials have ruled out sharing the pound with an independent Scotland, though their resolve has been questioned. José Manuel Barroso, the president of the European Commission, has said it would be “extremely difficult, if not impossible” for Scotland to join the European Union. That raised the question of whether Scotland would be left to create its own potentially volatile new currency.”
First, the article does not explain why the Tories and the EU have taken these positions. There is no technical reason why Scotland and England could not use the pound – the Tories simply want to extort the Scots from voting for independence. It is a naked colonial power play – and the English wrote the play book on colonial extortion.
Similarly, there is no operational or legal reason why Scotland could not enter the EU. This is simply another example of Tory extortion through third parties (which the English also made a colonial art form). The situation is that rank and file Tories overwhelmingly want to leave the EU – in order to restore English sovereignty and independence! (The irony escapes the NYT’s journalist.) The EU is petrified that the Tories will take the UK out of the EU. Here’s how the NYT described last week’s election EU election results.
“[T]he U.K. Independence Party, a group that wants Britain to pull out of the European Union … won 28 percent of the vote in Britain, far ahead of the Conservative, Labour or Liberal Democrat parties, making it the first insurgent party in modern British history to come out on top in a nationwide election.”
UKIP and the rank and file Tories share the explicit formulation of their anti-EU views as based on the EU’s threat to sovereignty and independence. Barroso is one of the most hated men in Europe – the very symbol of the EU’s incompetence, meddling, and arrogance. Barroso knows that the only thing that might stop the Tories from pulling the UK out of the EU is the Tory leader, Prime Minister David Cameron, who wants to stay in the EU. Cameron uses the leverage of the UK’s threatened withdrawal to extort the EU to adopt policies of his choosing. Those policies include the EU slamming the door on Scotland, but also involve an attempted veto on the choice of Barroso’s successor.
Spain is a great ally to the Cameron’s successful extortion of the EU to reject Scotland because Spain’s conservative government’s worst fear is independence for Catalonians and Basques.
Second, the unintentionally hilarious aspect of the passage from the NYT article about independence for Scotland is this sentence: “[The EU refusal to admit Scotland, which would bar it from using the euro] “raised the question of whether Scotland would be left to create its own potentially volatile new currency.” The NYT wants its readers to believe that Scotland would be safe if it adopted the English Pound or the euro, but it would be unsafe if it adopted a sovereign currency because such a currency might be “volatile.” Rather than repeat the gory details at length here, I’ll ask readers who need convincing to read our New Economic Perspectives blog about why nations that borrow only in their own, sovereign currency and have floating exchange rates have vastly more stable economies. This sentence from the NYT story – our national paper of record – shows how pathetic coverage is of economics. One-third of the eurozone’s total population is in Italy, Spain, and Greece living in nations with unemployment levels that exceed average Great Depression levels. Over one hundred million Europeans of the periphery have had their nations forced into a totally avoidable Great Depression because (1) they gave up their sovereign currencies when they adopted the euro and (2) the troika (the European Commission, IMF, and the ECB) insisted that the only way to save the euro was to throw the people of the periphery into a Great Depression via austerity – bleeding the patient, in the 21st century. Now, the NYT blithely suggests that Scotland, should it vote to restore its independence, is in for “volatility” because it will not be allowed to join the euro and subject itself to the troika’s tender mercies. The same NYT article treats stimulus in response to the Cameron’s gratuitous recession as a “cost” rather than a solution.
I ask again: is it a job requirement of NYT reporters who write about economics to never read Paul Krugman (or any other competent economist)? Is there a secret bar in Brussels in which NYT and WSJ reporters go to learn economic myths chanted by a Chimay-chugging choir of theoclassical economists posing as Trappist monks?
The remainder of the NYT article is a one-sided claim of economic doom and gloom that is no more credible or better reasoned. It has another hilarious passage.
“Scotland is threatening to walk away from any share of its debt should it be kept out of a currency union. While there is precedent for that — Russia assumed all Soviet debt — it could lead to an acrimonious split and retaliation by Britain.”
Put aside for the moment the insanity of some Scottish leaders wanting to adopt the euro and focus on the remainder of the paragraph. The only reason Scotland would be forbidden to enter the EU is because of “retaliation by Britain” for Scotland daring to vote to be independent. It is Cameron who is doing everything he can to make independence “acrimonious.” But all this is ignored by the NYT reporter. As he warps the facts, if Scotland were to respond to an attack from the EU denying it membership in retaliation for voting for independence – an attack provoked entirely by Cameron and Spain’s Prime Minister Rajoy demand for unprincipled retaliation – then the NYT portrays the Scots as the sole nation engaged in “retaliation.” The only way the Scots can act properly under the NYT’s narrative is to allow Cameron to retaliate with impunity against Scotland for the terrible affront of wanting to be independent. In short, the NYT wants even a sovereign Scotland to act like a British colony and let Cameron dictate its actions.
I know it’s an entire month from the anniversary of our Declaration of Independence and that the NYT reporter who wrote this unintentionally humorous propaganda lives in London. The reporter’s claim to fame is helping to bring down Eliot Spitzer, which made the reporter a hero of Wall Street. He will now be a hero of the City of London’s financial elite, the most virulent opponent of independence for Scotland.
It is apparently worth reminding the NYT that it is the norm, not a weird affliction, for nations that lost their independence through colonial force to restore their independence in the post-colonial era. Most of Ireland has restored its independence from London. The opponents of Scotland’s independence from London’s rule have always stressed the supposed economic cost. If our Founding Fathers had been the kind of morons who fell for that propaganda we would be a vastly poorer and less desirable place to live. Tens of millions of people came, and still come, to America because we did not give in to London’s economic blandishments and extortion and its threats of retaliation.
The United States of America did not assume liability for repaying any portion of the UK’s debts. This is the norm for nations that gain their independence from their colonial masters. Indeed, it was the extortion of UK taxes imposed without representation on the stated basis that they were essential to repay UK debts that arose from the expenses of the UK troops who fought in what we call the French and Indian Wars that triggered our decision to declare our independence.