Making Sense of the Brexit Fallout
This post has already been read 428 times!
On the 23rd June 2016, the British people showed courage and fortitude; put two fingers up to the establishment and voted to leave the EU. Despite what the sore losers in the press would have you believe, the majority voted to leave the EU in order to restore sovereign power to the UK; brexit was a vote for British democracy. Let’s have a look at the brexit fallout, and try to make some sense of what’s really going on.
They voted for the British people to be put back in the frame, against the wishes of an out of touch liberal political class who care little of life outside of leafy London suburbs, they voted against 20 years of Blairite government – first Tony and the then Dave – against banking and the interests of big business. The UK has done a great service to the world by voting to leave the EU. So why oh why is anybody complaining about the result?
As George Orwell wrote in his 1940 essay England your England.
Here one comes upon an all-important English trait: the respect for constitutionalism and legality, the belief in the law as something above the State and above the individual, something which is cruel and stupid, of course, but at any rate incorruptible.
Yes the law may be an ass, but when you have some influence in the shaping of said law, you can work within whatever limitations you perceive the law has. Where Brussels is making the laws, nobody but the commission can proffer legislation, and while these individuals are appointed and approved by their governments, they are not elected.
Extricating the UK from the EU bureaucracy must be seen as a good thing. Taking back sovereign power from the EU structure and the reams and reams of legislation it has produced (none of which can be repealed) must surely be seen as a triumph. Having the ultimate decision about where we steer our country must surely be preferable to being dictated to by a supra-national body with a European integration agenda? So the question still stands strong and clear. Why are so many of the UK population unhappy with the referendum result? I have had a think about it and I can think of two principal reasons:
1) They don’t really understand what the EU is or where it is heading
These were the people who voted to remain in the EU, who voted for more of the status quo. These were the people who, the following day when they realized that things were going to change, googled “What is the EU?”. If they had only taken the time to look into the matter before the referendum, they would have realized that the EU is an anti-democratic, crony structure which is pushing for a European super-state, and to achieve this it must quash national sovereignty of EU member states, introduce a single currency, and eventually fiscal union, and a European Army.
When you step back and look at the EU, it almost appears to be trying to replicate the USSR, except the USSR doesn’t exist and has no relevance in the 21st century. Centralised systems always fail. Perhaps all of this doesn’t bother the people who voted to remain? Perhaps they don’t consider Britain to be that important, don’t care about what it means to be British, for British values to be something worth cherishing. Perhaps they would rather be European (whatever that may be)?
2) Because it serves them to stay in the EU
When people like Richard Branson, Mass production car manufacturers, government bodies, the US President and the Governor of the Bank of England all come out to encourage, coerce and eventually frighten the UK population to vote for a system, a status quo, which is anti-democratic, we must ask ourselves some pretty searching questions about their motives. They must not be acting in the best interests of the people; they must be acting in their own interests.
Of course the people saw straight through the veneer of David Cameron and George Osborne’s fear campaign, and did the right thing. They voted for Britain, for Europe, and for personal power, freedom and democracy.
So the country has voted to leave the EU, and a lot of people are hung up on trade, concerned that this will impact the UK badly. The well-to-do are up in arms at having been brought down to reality with a harsh bump. Chief among these are the liberal lefty press. As I scout the papers for some kind of indication about where the brexit opportunity is heading, all I seem to be able to find is squabbling political parties, and grieving journalists who are currently vacillating between disbelief (we want another referendum) and blame (it’s those racists Leave supporters’ fault). We’re not quite at acceptance yet, but were getting ever closer as the days pass.
Having voted to leave the EU, we seem to be gearing up to have a remain campaigner as the head of the conservative party. Time for a general election, and a new party that actually reflects what the people want (i.e. not the Conservatives or Labour who the majority voted against)
I voted to leave because I want the UK to be self-determining again, because I want us to be free of damaging subsidies such as the CAP, I want our fishing waters to be British again and only able to be fished by British fishermen. We don’t have many natural resources in the UK, but we’re not giving those that we have away. I want the fruits of our country to be enjoyed by those natives of this country, not shared amongst European countries. We need to return to focus upon ourselves and what this beautiful country holds.
I want to see our democratic system more, not less accountable to the people. I want to see a return of conservative values in the UK, I want us to drop the two-tier Britain which has so damaged society, where those who control the money supply live one kind of life in the City of London, and the rest of the country pays for it (our money supply is on loan from private banks who are free to create as much of it as they choose). I want to do away with phony government policies which damage the economy such as global warming based energy taxes, and a great many subsidies and welfare payment that distort free market forces. I want to see an overhaul of taxes to encourage productive economy and to put an end to subsidised rent-seeking activities. Brits will always try to make a fast buck if you let them, so don’t let them.
So for anyone reeling in the leave decision, know that you are in a minority, and ask yourself why you really want to be a part of a united states of Europe? I’m not saying that Leavers were more informed than Remainers, but to vote against the status quo requires a bit more guts, quite a lot more guts, actually. In my opinion anyone who wants to be ruled by European committee is out of their mind, but that’s just me. I was born abroad and have lived abroad for more than 8 years of my life. I love Europeans, but I also love my country.
So lets’ clear a few thing up:
1. The EU is not Europe
The day after the referendum result came in, the press found a lot of disappointed looking Polish and Dutch people and shoved cameras in their faces. They looked saddened by the brexit vote. A colleague at work told me that his French housemate has stopped talking to him. Apparently they saw our actions as a step backwards, a regression to earlier, insular times of spam sandwiches, bread and dripping, and British Rail.
I actually see leaving the EU as a progressive step forward, a step into the unknown away from the safety and security of a protectionist customs union, into a world where the UK can be more effective, where we don’t need to get a consensus of 27 others before taking action, where we can take a step towards a global free trade model. I say step because while free trade is nice in theory, it is often harder to convince people to implement in practice, usually due to fears of repercussions, and the pain experienced by protected industries.
There is no doubt that the free-er the trade model, the more it benefits the world as a whole. The customs union by comparison, as a protectionist racket is extremely damaging to foreign business like Africa who want a slice of the EU economic pie. Free trade allows the efficient allocation of capital towards parts of the world best placed to use them. Countries like the UK, when freed from the EU customs union has the opportunity to become a small high-tech hub exporting to the world at world prices, rather than continuing in protected industries to which it is not best suited. We should be designing technology which others can manufacture, and performing the high-tech manufacturing (Formula 1) while leaving the less skilled stuff (steel works) to other parts of the world. The reality of a protectionist customs union is that it benefits those countries which sell more to others (trade surplus) while the others in that arrangement suffer for it.
2. Brexiteers are not all Racists
First of all, let’s not get carried away with ourselves with this whole racist thing. Nigel Farage may be a strong-willed and opinionated man, but he does talk a lot of sense. He might be a bit of a rabble-rouser, but Farage has succeeded in getting what he wanted, in many regards he is the most successful politician of a generation. Farage had one agenda and he succeeded in achieving it, getting the UK out of the EU.
Plenty of people made a conscious, albeit difficult choice for democracy over rule by an unelected commission. Plenty voted for reform to our laws which they see never being brought about by a remote elite in Brussels. Many of these individuals voted for their childrens’ and grand-childrens’ futures. Voting to stay in the EU seems an incomprehensible choice. It is appeasement, it is lying down and being trampled over, it is letting the charade which is the EU oligarchy to grind onward towards its opaque goals of ‘ever closer union’.
The remain camp are either not concerned about British sovereignty, care little about democracy and the rule of law, are happy that Britain be drawn into a United States of Europe, or they like being told what to do by other nationalities and are happy to have these ’trivialities’ dealt with by others. But Orwell was right in 1940, and little has changed since. We Brits must have the rule of law, without it we feel desperately uncomfortable. The EU failed to give us what we need for our very existence and so it had to go.
Arguably our cherished view of the law and the robust legal system is one of the reasons that we have become such a popular place for people to invest their money; to come and squirrel away their money in property; we consider laws above the state, and property laws sacrosanct. Not the same can be said of many other countries.
So when we feel that we have lost control of our beloved laws, we feel as though someone was pushing a pillow to our face, and we must act. Had David Cameron returned from Brussels with a better deal, it might have kept people happy for a time, but in the long run we would have demanded our democracy back. It would behove Angela Merkel and the other EU heads to sit down and have a think about the Brits, about our island mentality, and our naval past which has shaped our psyche. We consider ourselves isolated from Europe, geographically, but also by mother tongue. We do not want to be told what to do, by our politicians, and we feel that a basic tenet of life is that our government answers to us and not the other way around.
I know they haven’t been answering to us, but when first past the post in a general election was replaced with one man one vote in the brexit referendum, the politicians found out what we really think. Brexit wasn’t all about the protest vote, but there was a lot of rebellion in there, defiance and a desire for change.
Old People are Valuable Too
There’s a lot of sour grapes being circulated by the young, 75% of whom feel that they have been let down by old people. “It’s our future”, they cry, never thinking that the older people might be thinking about the wellbeing of their children and grandchildren when they cast their votes. A remain vote is about vested interests. A remain vote means you’re happy with things as they are, or you don’t understand why the current system is maintaining the status quo of increasing inequality.
Apart from the point that many young people didn’t even turn up to vote, many of the ‘old fogeys’ (a colleague at work in her mid twenties said ‘no offence, but most people your age voted to leave’ – I’m 38) are plenty aware of the situation enough to make an informed decision when it comes to the important elements in life: finance, money, housing, democracy. These are not little issues, they mean the difference between war and peace, thriving and destitution. I’m not laying all blame at the door of government, but they can certainly come up with policies which move things progressively in the right direction. Meddling in the economy for example, is not appreciated but is routine from everybody who asked us to vote remain. The Bank of England, the chancellor, Barack Obama, Car Manufacturers, Richard Branson. They’re all on the Gravy train and we who voted leave know it, and want to put a stop to it. This is what I mean by free markets or lack of them. What we are seeing here is the unraveling of years, if not decades of market manipulation, against the odds.
Market Volatility is Created it Doesn’t just Happen
The markets will fluctuate in periods of uncertainty. Why do they fluctuate? Because markets reflect those who buy and sell in those markets. If more people sell than buy, the price drops, if more people buy than sell the price rises. That’s all you need to know about commodities, currency, and stock trading. working out who is going to buy or sell what is the trick to master. A lot of the falls in the pound post Brexit were just a resetting of the gains which the pound had accrued the week before the referendum as the market priced in the remain vote. Everyone was piling into sterling expecting Remain to win, and the price to shoot up. These people and their actions make the market move, it doesn’t move of its own accord. More of this in a minute.
The chancellor, unhelpfully, mentioned that there would be market chaos post Brexit. Thank God for these principled, selfless politicians who can be relied on to show fortitude and provide leadership in times of great national upheaval. The same goes for PM Cameron. What a lettuce leaf of a man Cameron has proven to be. When the going gets a little bumpy, the PM resigns. He even managed a little sob at the lectern as he gave his leaving speech; acting to the very last.
What George and Dave didn’t explain pre-referendum was that their actions in the run up and lack of leadership post Brexit would be the main cause of the very market turmoil they had forecast. What we are seeing then is something of a self-fulfilling prophecy; as confidence falls, more confidence is lost, markets drop further, and confidence falls further, and on and on it goes. Understanding the behaviour of the herd mentality, is to understand how markets function, and why we have boom and bust economics.
When people calm down and process the decision to leave the EU, accepting the stages of grief people need to go through, and see the opportunity there, the markets will reflect their improved state of mind. When people feel bad, they tend to make bad decisions, and so rightfully wait on making big decisions. Likewise, when markets are volatile, margin calls are made as investors seek to stabilise their positions by mitigating risk.
Mark Carney has the power to create as much money as he wants, and to put it into whatever he wants. It’s a bit like putting bets when you know the outcome. Bankers talk about providing money to stabilise markets, when what happens in reality is they are playing the insiders game and getting very rich off insider-trading. If someone in an influential position tells you that the markets are going to change, know full well that you are being played, and that plenty of people are going to make a lot of money off that position. When you hold all the cards as Carney does, there is simply no excuse for speaking as though ‘stuff just happens’.
Brexit is a huge opportunity for the UK and the World, people just need to wake up to the new paradigm, and by that I mean the Politicians and the Press.
The Global Warming Tax
The second biggest opportunity post Brexit is Global Warming, or lack thereof. Global temperature changes are a natural phenomenon, just as the movement of water, the purification of air, the regeneration of organic life and the recycling of organic matter, and the spinning of the earth in its orbit have no input from a single human being, so the temperature of the planet is outside of our control. Recent studies of the global temperatures have shown that the earth is actually cooling. So much for the wasted money of global warming taxes. This is The Biggest Racket of All!
One wonders how a theory based on dubious science became a religion, but it can only come down to two things; 1) persistence on the part of those who would benefit from the premise of man-made global warming, and 2) ecological heresy, that nobody in their right mind would ever dare to condemn their planet to the dustbin.
Never mind the EU bureaucracy as a massive waste of money, the single biggest transfer of wealth is done in an attempt to ‘save the planet’. 86% of global energy comes from fossil fuels, and that is not going to change any time soon. In addition, the planet isn’t warming up any more. “Whoops, we got it wrong” great, we’d like a rebate please on our energy and food and manufactured goods costs for the last 10 years, at least.
The effects of global warming taxation are far-reaching, but only in the countries willing to extract blood from their funders (yes, we the taxpayers always pick up the bill). As Christopher Booker wrote in December 2015 following the Paris Summit,
“Face the facts: there is no way the world as a whole is going to reduce its greenhouse gas emissions. What we have then is some countries opting to penalise themselves and their economies for no reason, to go against the abundance of Carbon based energy supplies like coal.”
In the UK, as another Coal Fired Power station closes, the only people getting rich out of the renewables subsidy racket are the big six energy companies. We are now hearing that due to the Maunder Minimum, a period of low sun spots that a mini ice age may be on the way. Hang on, I thought that sun spots had nothing to do with global warming. If I was a class action lawyer, I’d be preparing my case to take the EU to court and give s rebate worth trillions back to the consumer who’s been the victim of fraud.
The EU is an empire builder, led by Germany and France. It operates as a protectionist customs union. This protects the businesses and producers inside against potentially cheaper and / or better competition from outside. The EU is a free trade zone within which member countries trade with each other. There are no tariffs levied between members of the club. If you want to sell into the EU private members club, the EU charges tariffs on your goods raising the price. This price rise is met, like all things, by the consumer and the money goes to the government. We the consumers pay more. Other goods traded within the EU cost what they cost, but this is not the world price, it is the world price plus the tariff, because we are protected from the world prices, in the areas where trade tariffs apply.
Living in a customs union then is like living in a subsidised economy, where businesses are subsidised by the consumers, who have to pay more for products (whether from inside or outside). At the very least the businesses inside the union are discouraged from being competitive on the global free trade stage.
Whenever the word subsidy is mentioned, alarm bells should be ringing. Subsidy means a transfer of wealth from the people to business and government, whether we are talking about Global Warming Taxes, Farming Subsidies such as the Common Agricultural Policy, Excise tariffs, banking bailouts, or in work benefits. Any time Government money is given to needy causes, know that the beneficiaries are not the people, but the business. Money is spent by the people and it goes to businesses that serve them with products and services. The government has the conceit to wade in and back a particular policy, it causes market distortion and more government (taxpayer) money goes to business. The bulk of the ‘distortion’ is paid for by the middle classes who neither own the businesses or receive the benefits but who pay tax to find the state.
In the case of the customs union, the consumer pays a higher price than he otherwise might, which goes directly (when they buy from protected EU businesses) or indirectly (when they buy from outside and money goes to the EU and national governments). Local producers get more than their fair share of the business. In a free-er trade model, the most efficient highest quality per price producers would get the business, and the local previously protected industries would be forced to up their game, to provide better higher quality or newer products to give themselves an advantage over the competitive imports.
If you are operating within a customs union, you will only benefit from the situation if you are selling more to partners inside the customs union than you are buying from them – this explains Germany’s roaring success as a manufacturing giant in Europe of Automotive and electrical appliances.
Old thinking revolves around protecting business in a time when the world economy and information wasn’t as free-flowing, but in the global economy in 2016, such thinking is outdated. The globalized economy in commodities and energy, and the liberalization of markets (read lack of protectionism, thanks in part to the fact that trying to draw up ‘trade agreements’ has taken so long) means that world prices are becoming more commonplace. Check the price of an apple iPhone 6 in various countries in the world; you might be surprised at the similarities.
We cannot control the price others pay, only the price we pay
If the UK wants to whack a tariff on goods coming into the country, these tariffs do not hurt those selling into the market as much as they hurt those buying. Tariffs hurt the consumer first and foremost. As a small player in a large global market, the UK is missing the most fundamental point of all; that the benefits which we garner are not in selling, but in buying. We cannot affect the price that we get for our own products or if we try we are likely to come out of any such agreement worse off. We are too small a producer or consumer to have any influence on the world price, unless we are talking about producing things which people really want such as iPhones, BUT we do have the power to affect the price the population pays, which is the opposite end of the same stick.
Earn more money, or spend less money. Same thing. We have grown accustomed to rising house prices as being a good thing. Why would we ever see falling prices as an immediate benefit? Lower prices benefits the economy in the way that you can control. So the people pay less because we choose to not charge any tariffs on good coming into the UK, as a result, anyone else selling into the UK market has to compete with the world price, which means that prices go down even further.
Let’s take the example of German manufacturers, who stand to lose a lot more than the UK post brexit if there is no trade deal, this is the reason that German equivalent of the CBI has come out to say that we can and should have a free trade deal. If Mercedes Benz wants to sell to the UK, and the EU wants to whack tariffs on Mercedes Benz Cars, then they won’t sell many in the UK, where alternatives from around the world will not be overpriced by 20%. The upshot is that the UK consumer benefits from lower prices..
When you leave the EU, you forfeit the single market and its trade tariff-free-one. This is not such a bad deal for the UK as it is for Europe, especially Germany. The UK has a trade deficit with the EU, especially Germany, so we should be looking at the benefits, and there are plenty, to leaving the EU and its customs union, and reverting the WTO rules, as we do with America.
Patriotism and Leadership
When one takes up office in an influential position, whether in the press or in cabinet or big business, one has two masters; the country and ones own interest. It is hoped that individuals enter public service because they want to serve the public as “public servants” although the recent lack of any kind of captain steadying the good ship ‘HMS Great Britain’ indicates that this could well be a false premise.
Since the play’s lead actor stormed off stage in a huff on the 24th June, the remaining cast of actors have been fighting backstage about who is going to get the top job. Meanwhile the audience is sitting in the stalls waiting……waiting…..hello is there anybody out there? Afraid not. The public are getting nervous, fuelled by doom and gloom from the press, and government.
So let’s talk about leadership and the role of the PM, the Chancellor of the Exchequer, the Governor of the Bank of England, the US president, and prominent commentators in the press. What are they doing post Brexit? Flapping about like a bunch of hysterical schoolgirls. It reminds me of a story that I once heard: a friend of mine, Pierre worked in the city, and things started to get difficult on a particular job he was working on. He boss turned to him and said “Pierre, it’s time to start panicking!”. This is not leadership. This is the opposite of leadership.
Leadership, for the benefit of Messrs Cameron, Osborne, Carney et al. is about holding onto a vision of what you want regardless of the current reality. Any CEO worth his salt knows this, and anyone who has created anything new knows this. Rather than talking down your country, the markets, the economy, the housing market, sterling, pretty much everything you might care to mention, how about showing a little bit of leadership for a change?
Granted, you shouldn’t have used scare tactics in the first place, you should have kept your mouths firmly shut and treated people like adults, and you probably wouldn’t be in this mess, but here we are.
Rather than resigning, how about doing your job Mr Cameron; ‘steadying the ship’ (your words). Mr. Carney, reading a few books on leadership wouldn’t hurt you either. Carney has huge influence and what he says is taken very seriously, so why is he, like the chancellor before him, talking of financial Armageddon? Markets move because of confidence or lack thereof, and what there men are doing is causing the very thing they are warning people about.
It may be spite, it may be the chance to make a quick buck, it may be that they just don’t understand. Whatever the excuse, it is not good enough. Carney, Osborne and Cameron should all be sacked immediately and replaced with proper leaders.
And so to the press. As I’ve said a lot of the lefty liberal press is grieving the loss of their beloved EU, and their outpourings are just as bad as the efforts of the Three Amigos above. Daily, the papers are filled with stories talking down the Brexit decision as the actions of a country of imbeciles, that we who voted to leave are the cause of this economic trouble and strife.
So we get our brains washed with stories like this: another referendum would be legal, EU countries think we’re foolish to have voted out, doom and gloom in post Brexit chaos. But what the press and our absentee leaders fail to recognise is that they are the cause of the turmoil by failing to show leadership, and by talking up the problems. Any good shepherd knows you must stay calm to avoid frightening the herd. Once the herd turns and starts to stampede, it’s all over. Let’s draw a line under the referendum decision and start talking about the future, it will be a reasonable one, with concessions for both sides, but based on British Sovereignty.
You’re not going to get another referendum. And if you don’t let this matter go, you’re asking for serious trouble. Remember that the UK has voted, against all odds and the status quo to take a leap into the unknown. If you want to ignore those who already feel ignored, you’re asking for it. Peter Hitchens summed up the tension in this Mail on Sunday piece about Boston Lincolnshire where three quarters of voters wanted out.
“I do not see how these people could be clearer about their discontent over the enforced transformation of their lives. I am amazed at their patience. I strongly advise against ignoring them any longer.”
The people have spoken in the referendum. Never mind the legality of such an outcome. If the result is ignored, the economy is going to be the least of our troubles in the coming months. Brexit is a triumph, and it’s about time the we started recognising it as such, looking to the future and what a great opportunity lies before us. The sooner we get on with it, the sooner the markets, and the general panic will abate and we can start making changes.
This post has already been read 428 times!
Also published on Medium.