Sunday, 26 June 2016

Blue skies after Brexit

On Thursday June 23, 2016, Great Britain went to the polls to vote in a referendum about their continued membership in the European Union. While most polls, political pundits and business reporters either favored or indicated a ‘remain’ vote, the public had a different opinion. To the surprise of most of the world, citizens voted to ‘leave’ 51.9% to 48.1% or by 1,269,501 votes. While there will be consequences pros and cons, from my point of view, the reasons and reactions to the result may differ.

First and foremost the result of the referendum is a reflection on the division that exist in The United Kingdom. Scotland, Norther Ireland voted overwhelmingly to ‘remain, while most of England and Wales voted to ‘leave’. This clear division may trigger further referenda from parts of Britain that will want to separate from the U.K. It is ironic that in a year which sees the celebration of her Jubilee, that the Queen may witness the breakup of her kingdom.

A united Europe was part of Churchill’s vision to stop the warring ways of Europeans. Later Harold Wilson became a strong proponent of Britain’s membership in the EU while Margaret Thatcher was skeptical about a complete integration. Although Britain signed the 1992 Maastricht Treaty which gave Eurocrats more power to intervene in the economy, we should remember that Britain refused to join the euro snake and kept the pound as its currency.
What started as a great idea years ago slowly deteriorated into a burdensome, multilateral organization with a growing liberal agenda. Over the years the bureaucrats in Brussels exerted more power and imposed increasing number of regulations, which in many ways saw Britain contribute more than they were getting out of Brussels. In addition the false sense of security provided by the central bank allowed governments to borrow huge amounts of euro to support their mismanaged economies. Portugal, Ireland, Greece and Spain (PIGS) became some of the nations that overburdened the system, creating volatility and risk in the union.

A growing penchant for leftist/socialist policies made matters even worse. Interference in national matters such as security, and immigration contributed too much of the antagonism which triggered the ‘leave’ vote. Britons, especially baby boomers voted 61% to leave while 75% of millennials voted to ‘remain’. The question is why? Most baby boomers are more culturally nationalist, while the millennials have known only one system which was the EU. The latter demographics may see the benefit of freedom of labor and the idea of a continent free of passport and visas as plusses. However the older generation may see the EU as interventionist and long for a sovereign Britain with less interference from Brussels. Scotland which narrowly voted to stay in the United Kingdom may now want to join the EU on its own, because historically they have always wanted independence from an occupying force that is England.

There will be many economic and political consequences to the watershed decision made by Britain, not all of them bad. The problem that I have is the reaction to a democratic vote by the elite establishment. The six founder members of the EU met and the reactions were mixed. While Germany was more subdued the rest were downright hostile and wanted Britain to exit as quickly as possible, fearing more exits from other nations. Many liberal intellectuals have condemned the results as being racist, xenophobic, and made by blue collar and uneducated people. Instead of looking at the real problem they blame everything on populism. Similarly, the former U.S Treasury of State Hank Paulson, who presided over both the meltdown of the U.S. economy and the subsequent bank bailout, commenting on a Trump’s presidency, said that we were witnessing “… a brand of populism rooted in ignorance, prejudice, fear and isolationism.”  What the establishment elite misses, is that the ordinary citizen is fed up with politicians and the establishment not listening to their complaints and continuing in the merry ways to impose rules, regulations and of course taxes to support their agenda.

Furthermore, the Brexit was also influenced by the EU’s immigration policy; a policy which allowed the free movement of labor and the growth of the economy. With wars in the Middle East and economic ravages in Northern Africa, this policy became a burden on Britain.  Immigrants from Eastern Europe converged on Britain, while contributing to the economy the immigrants were also sending money back to their countries of origin. The construction of the Channel Tunnel also added a new gateway for illegal immigrants. Angela Merkel’s policy which allowed for millions of migrants from Syria and other countries created real economic and security problems because of terrorism.  Immigrants and potential terrorists automatically accepted in EU countries would be eligible to move to Britain at a later date. Brussels’ action to impose fines on EU countries that would not accept refugees may also have been a trigger for Brexit.

The world’s elite has always believed that we should have centralized governments, and even one world government, hence Obama’s support for a greater role for the U.N and his support for a ‘remain’ vote. The U.S should really take notice of what happened in Britain. Trump may be a neophyte politician, but he may have tapped into the real feelings of a vast majority of people, certainly some 14 million who nominated him as the presumptive GOP Presidential candidate.

Brexit may be the trigger to a better world, less dominated by the liberal elite. The EU has a great opportunity to review its structure, and allow Britain to operate under a bilateral relationship just like Switzerland, and expand its participation in NATO.  This watershed change should be a stark reminder that there is a growing feeling of nationalism around the world. From an economic point of view it may be negative to have a trend towards protectionism, but from a security point of view, immigration should be a national and not an international policy. Too often Liberal elites have seen immigration as a tool for votes and gerrymandering
 It may well be that Brexit was not about ignorance and economics but all about sovereignty and a rejection of establishment elitism.

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