“I’ve come to learn there is a virtuous cycle to transparency and a very vicious cycle of obfuscation.” – Jeff Weiner
“Let us not be defeated by the tyranny of the world financial markets that threaten peace and democracy everywhere.” – Stephane Hessel
Yes, I have been researching Brexit, totally because a couple of people I truly admire are so against it because of the economic difficulties they foresee, and the thought that the withdrawal is marching backwards instead of forwards on the world stage. Keith and Hugh make exceptionally good points, but while I understand the economic difficulties it caused worldwide when the measure first passed, I can’t help but agree with many of the articles I have read from sources inside and outside of the EU, which point out just how “broken” the EU leadership truly is. That is historically the problem when you get ‘too many cooks in the kitchen’ (from nine original members to 28, all with their own agendas). You wind up with a spoiled meal, or in this case, a massive bureaucracy so enamored with their own power they constantly do, to put it bluntly, stupid stuff. I haven’t been following the EU regulatory process, (too busy working to get my editing business off the ground) but one article I just read from a British newspaper pointed out that one of the EU rules, in the vein of “the straw that broke the camel’s back” had to do with regulations on the “correct” size and shape of cucumbers and carrots!* So, if such common foods are not shaped correctly, were they thrown out? When food prices are so high, and so many people go hungry? And besides that – with all the problems this world has to face in these troubling times of war, poverty, and terrorism, the fact that carrot shape is what the EU is interested in is offensive to a breathtaking degree. Now, if they were worried about whether the carrot was filled with poisonous chemicals, that I could see. But whether it is bumpy or not is what you worry about? Deeply, Deeply offensive!
I read a lot of good comments on many different articles posted online, (and some that didn’t make a lot of sense), but we all have our opinions. After reading articles from a wide-ranging group of countries, I focused on several articles, especially one from the New Zealand National Business Review entitled “Three Reasons Brexit Won”. The points that make the most sense to me deal mostly with the immigration issues inherent in the EU structure.
1) As a poster commented, you can’t plan if you don’t know how many people to plan for. Health care, housing, jobs, policing, even food supplies – there is a whole list of issues dealing with immigration that must be planned for, both in the long and short term. You can’t set the table if you don’t know how many people are coming to dinner. As pointed out by one correspondent, “Under EU rules, citizens of any member state are allowed to live and work anywhere in the bloc, regardless of their education, salary or skills.” It reminds me of Castro dumping all of his prisoners and mental hospital patients into the exodus of “boat people” from his shores in 1994, shipping them off to Florida so he didn’t have to pay for their upkeep, the second time he had done the same thing (see “The Mariel Crisis” April – October, 1980). A brilliant strategy on his part, but a disaster for the state of Florida where the boats landed.
2) On another immigration issue, I agree that the number of people flooding Britain leaves them dangerously open to terrorists coming across the border and creating devastating damage. When you have organized policing, and the funding for police services for 33.5 million people, having the migration numbers skyrocket from 44,000 in 1991 to 333,000 in 2015, there is no way any country can assure the safety of their citizens.
3) While many posters at different sites are making a big point of the fact that the “youth are getting screwed” by Brexit, I have difficulty with that stance, again from an immigration standpoint. When you have people emigrating from poor countries, they are willing to work for extremely low salaries. They are willing to work harder, put in longer hours, and rarely “rock the boat”. As such, companies are much more likely to hire these immigrants, some highly educated as in the case of Asian and Indian workers, who are willing to work harder for less money. We see this every day here in the States, with immigrant workers being such a huge workforce. We also suffer greatly from companies outsourcing jobs to India, Pakistan, and other countries where wages are a 10th of the cost and there are lower standards for worker safety, no health care, and no retirement. A “disposable” workforce. Of course, they made workers here “disposable” as well, leaving people who had good jobs either on unemployment, welfare, or slinging burgers at two or three part time jobs with no benefits and no retirement. While the “reeducation” concept is a good idea, too often workers find that, once they are retrained, the job they trained for was also outsourced, or went to a younger, cheaper applicant. A rather short-sighted view, as the older applicant has more experience, knowledge, and is accustomed to being loyal to the company she/he works for. Turnover is expensive.
This also highlights the problem of educational resources. Overcrowding in schools, teacher shortages, lack of books and supplies, and the violence inherent in putting together massive numbers of testosterone and estrogen factories in small, overcrowded spaces where “normal” levels of high school angst are amplified by extreme racial and cultural tensions without appropriate counseling and teaching services is short-sighted at best, deadly at worst. An article in The Mail by Sue Reed (30 May 2014) The New Face of Racial Tension discusses warnings from ex-Home Secretary David Blunkett regarding the swift rise of violence in the area of Sheffield between British locals and the expanding population of Roma in the area.
Regardless of who is to blame for the rising tension, it is a sorry story that encapsulates what is happening in so many urban areas across the country, as people are forced to adapt to a sudden influx of immigrants who often speak no English, can’t get work, live in dreadful conditions and put immense strain on already hard-pressed schools and NHS services.
As for the “Doomsday” outcome of the world economy after Brexit? As Oliver Pursche, correspondent for TheStreet.com put it, “Slow down, stop speculating and focus on the facts.” And the facts are, as pointed out by numerous banking and finance specialists, after the 2007 crash major banking and worldwide stock market systems created “stress tests” and methodologies for handling just this sort of economic/political upheaval. There are contingency plans in place. That doesn’t mean there won’t be ups and down, but articles over the last week are calling for much less upheaval than was felt in the first few days after Brexit’s passing as financial markets imploded from the number of ostensibly intelligent people running around screaming “Doom! Doom!” and trying to make as much money as quickly as possible off of the uncertainty inherent in any large-scale change.
Correspondingly pointed out in a blog post on the Brookings Institute website by former Federal Reserve Chairman Ben Bernanke, “The biggest risks to financial stability at this point appear to be political — specifically the risks of further defections or breakdown in the European Union — rather than economic.” As he went on to comment, “Markets are already beginning to calculate and adjust for the risk that other countries will press for greater autonomy from Brussels.”
I am not saying here that there won’t be economic damage to Britain from Brexit. Another quote from Bernanke points out:
In the longer run, the uncertainty will dissipate, but the economic costs to the U.K. still will exceed the benefits. Financial services and other globally oriented industries, which depend on unfettered access to European markets and exchanges, will come under pressure. At the same time, the purported gains from freeing the U.K. from the heavy regulatory hand of Brussels will be limited, because Britain will likely have to accept most of those rules (without ability to influence them) as part of restructured trade agreements. Immigration is unpopular in the U.K., and slowing it was a motivation for some “leave” voters, but a more slowly growing labor force likely would also reduce overall economic growth.
My thoughts on the whole “The Sky Is Falling! The Sky is Falling!” attitude of the markets? Markets react much like a flock of birds in a field. One gunshot and the whole flock bursts into panic and takes to the skies, defecating and shedding feathers in terror. Or, as Mark Twain said, “A banker is a fellow who lends you his umbrella when the sun is shining but wants it back the minute it begins to rain.” In my own words? “Grow up, you market idiots and act like intelligent people instead of three-year-olds on a serious sugar rush!” I can’t help but feel that the reason many ‘market crises’ occur at all is best indicated by CNN Money’s “Fear and Greed Index.” I.e., “Investors are driven by two emotions: fear and greed. Too much fear can sink stocks well below where they should be. When investors get greedy, they can bid up stock prices way too far.” The 2007 economic collapse was based on greed, as a small group of people purposely destroyed whole economic systems in a grab for obnoxious degrees of wealth and power. If we can keep the politicians and financial manipulators from destroying us all, I have hope that the “regular population” will be able to see past the sturm und drang, greed based manipulations and power plays of the rich and powerful and keep their panic to a minimum. The damage is done. Now it is time to clear up the fallout and work on correcting the very issues that have placed the EU in such an unstable position.
That’s my take on the situation. Good, bad, or indifferent, it will be interesting to see how it all pans out . . .
*”According to European Commission Regulation No. 1277/88, if a cucumber bends more than 10 millimeters per 10 centimeters (0.4 inches per 4 inches) in length, it cannot be categorized as “class one” and may therefore only be sold as a second-rate cucumber. But who wants to buy one of those? Most second-rate cucumbers — at least according to conventional wisdom — never make it to market.”
My thanks to my friends Keith from MusingsofanOldFart.com and Hugh Curtler for waking me up and getting me interested (again!) in an important world event. If it weren’t for you two, I wouldn’t know it if the sky really was falling!