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Historically, it seems, the prospect of a freer economy in which business owners have fewer restrictions and workers keep more of their wages brings out the harbingers of doom.

It was no different when British voters chose to leave the increasingly suffocating European Union and Americans elected businessman Donald Trump. Out came the predictions of a “post-Brexit recession” in the U.K. and a “Trump recession” in the U.S.

President Trump (official White House photo)

President Trump (official White House photo)

As it dawned on America’s stunned punditry the night of Nov. 8, 2016, that Donald Trump was going to be the next president, famed New York Times economist Paul Krugman wrote that the markets were “plunging” in response and Krugman’s answer to when they might recover was “never.”

“Under any circumstances, putting an irresponsible, ignorant man who takes his advice from all the wrong people in charge of the nation with the world’s most important economy would be very bad news,” the Times columnist wrote. “What makes it especially bad right now, however, is the fundamentally fragile state much of the world is still in, eight years after the great financial crisis.”

More than a year later, however, the mea culpas are beginning to appear.

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Yahoo Finance columnist Rick Newman confessed in a column Wednesday that he was wrong about his prediction of economic “gloom” after Trump won in November 2016.

“There was no Trump recession,” he writes. “Quite the contrary.”

Newman points to an expansion of the economy in the past year, job growth and record stock markets, with the Dow up 28.5 percent since the election, having set 86 new record closing highs, and the S&P 500 index up 20 percent.

And, with the passage this month of a historic tax-reform bill, he writes, Americans “feel increasingly confident about their prospects.”

Meanwhile, across the Atlantic, among the predictors of economic doom after British voters chose to exit the European Union was a highly regarded think tank, the London-based Centre for Economics and Business Research, CEBR.

Now, CEBR is admitting the predicted economic downturn “has not happened.”

In fact, the think tank predicts lower inflation and higher wages over the next few months and forecasts that Britain will overtake France in 2020 as the world’s fifth largest economy, a year earlier than originally forecast, the Daily Mail of London reported Wednesday.

American optimism

CEBR also admitted the U.S. was doing better than predicted under Trump, “with tax reforms passed last week set to provide a major boost to growth.”

And CNN Money reported Wednesday Americans are ending 2017 feeling very good about the economy.

111231wallstreetbullThe Conference Board’s index released Wednesday said consumer confidence hit 122.1 in December, slightly below the 17-year high set in November, 128.6.

Lynn Franco, director of economic indicators at the Conference Board, said in a statement that “consumers’ expectations remain at historically strong levels, suggesting economic growth will continue well into 2018.”

Confidence, CNN Money said, has been fueled by the job market, the stock market rally and Republicans’ fiscal reforms.

Unemployment is at 4.1 percent, the lowest level since 2000, and the U.S. economy has gained jobs for 86 consecutive months, the longest streak in history, according to Labor Department figures going back to 1939.

Also reflecting consumer confidence, the Dow is just below 25,000 points. At the end of 2016, it was just below 20,000.

The Conference Board’s December survey found consumers plan to make big-ticket purchases in the next six months. The share of Americans planning to buy refrigerators and washing machines (9.2 percent), for example, reached its highest point since at least 1978.

In another sign of optimism, more than 60 percent of Americans surveyed by the Conference Board in December said they intend to take a vacation in the next six months. CNN Money said that level is just below October’s figure of 63.5 percent, which was the highest since at least 1978.

No ‘post-Brexit recession’

The London think tank CEBR originally predicted the British economy would slow down because of a drop in consumer spending and investment as financiers leave London. And they weren’t alone. Economists, according to surveys at the time of the June 23, 2016, EU referendum, were united in predicting Brexit would harm the U.K. economy by creating new barriers to trade, direct foreign investment and immigration.

London's Big Ben (Wikimedia Commons).

London’s Big Ben (Wikimedia Commons).

But since then, the British capital actually has increased its lead as the world’s financial center.

In October, the left-leaning Guardian newspaper of London reported that fears that Britain will slide into a post-referendum recession were allayed after the paper’s analysis showed the latest news on the economy has “confounded analysts’ gloomy expectations, with consumer spending strong, unemployment low and the housing market holding steady.”

Britian’s Financial Times reported later that month that the U.K.’s first official growth figures since the Brexit vote confounded the government’s warnings of an immediate recession if Britain voted to leave the EU. The economy was 0.5 per cent larger between July and September than three months earlier, according to the Office for National Statistics. The Treasury had predicted it would shrink 0.1 percent.

Meanwhile, a survey published Tuesday night found that nearly half of Britain’s business leaders are “optimistic” about their firm’s prospects next year while just 17 percent were pessimistic, the Express newspaper of London reported.

The survey by the Institute of Directors did find, however, that 47 percent of the 762 business leaders in the survey were pessimistic about the long-term outlook, beyond 2018, for Britain’s economy.

The Express commented, nevertheless, that the findings “are likely to give further weight to the argument that British firms are defying gloomy claims about the country’s economic prospects as the departure from the EU approaches.”

Another report yesterday forecast growing demand in Britain for computer security staff, data analysts, accountants and civil engineers in 2018.

This week, a Conservative Party member of parliament, Jacob Rees-Mogg, criticized the forecasters of Brexit gloom.

“Many forecasts are honestly wrong, but unfortunately many of the forecasts around Brexit were politically motivated and have undermined trust in the probity and impartiality of those making them,” he said, according to the Daily Mail.

Ian Stewart of the accounting firm Deloitte said: “Despite the huge focus we have seen on how much uncertainty there is, Britain remains a very good place to do business.

“We are not seeing the apocalyptic slowdown which some feared would happen at the time of the referendum or any signs of a de-rating of our competitiveness,” he said. “It is still early days, but the reality is better than a lot of the commentary suggests.”

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