I recently came across a fascinating essay by the best-selling Swiss author, Rolf Dobelli. Dobelli is rightly famous for his book ‘The Art of Thinking Clearly’ but his essay ‘News Diet’ carries a special resonance in the aftermath of the UK’s Brexit vote. Dobelli suggests that what sugar is to the body, news is to the mind. We would all be better off if we switched the news off and read something more informative and intelligent instead. I am increasingly coming round to Dobelli’s view.
When it comes to Brexit, our media have collectively lost their heads. Two of the UK’s most celebrated financial journals, The Financial Times and The Economist, lobbied hard for the Remain camp and remain rooted, four months after the definitive verdict, in grim-faced denial. It must be galling to be on the wrong side of history.
The conventional view has it that those of us who voted to Leave are a bunch of uninformed, financially illiterate racists surfing a rising tide of populism surging around the world. The polite and correct response to this is perhaps best stated by the following letter to the FT from a reader:
“In 1975, Britain’s political leaders misled the voters into thinking that to join the then Common Market was nothing more than entering a trading arrangement. We know better now, and the referendum has given the voters the opportunity to signal their wish to leave the EU political project. It is a fact that their decision runs counter to the longstanding bias in favour of the EU on the part of a majority of their elected MPs — which is why, incidentally, the voters are unlikely to buy the idea that Parliament’s views on this particular matter have any claim to be sovereign. That is a bias which [the FT] would no doubt admit to sharing. A political decision has been made to restore Britain to self-government. It has nothing to do with xenophobia and it is far more profound in its nature and ramifications than daily exchange rate movements.”
If you were to read the current output of most financial publications, the “collapse” in the value of the pound is akin to the sky falling in. Perhaps it is nothing more than a long overdue correction in the overvalued currency of an economy with a chronic trade deficit and almost unmanageable debts.
I feel pretty bullish about the UK’s longer term economic prospects, not least because we have voted to escape from a failing economic and political project (hopefully) before the roof falls in. Anyone who thinks the EU is in great shape is turning a tin ear to the problems of its banking sector or the refugees that are literally dying to cross its borders.
The political debate of our time is no longer about ‘Left’ versus ‘Right’, but rather whether you believe in ‘Big Government’ or a small State. I am for the latter. Europhiles and Remoaners are for the former.
Financial columnists are clearly entitled to their opinion, however misguided or wrong-headed that opinion might be. But for those of us looking for more nuanced and useful advice during this period of extraordinary financial adventuring by the world’s central banks, the best recommendation might be that from ‘The X Files’: trust no-one.
Tim Price is the author of ‘Investing Through the Looking Glass: a rational guide to irrational financial markets’, to be published on November 7th 2016.