Brexit: The Day After-What Happens Now?

Brexit—“This is what happens when you try to fix a faulty watch with a hammer” J.K. Rowling

If The Brexit vote demonstrated anything, it at least demonstrated this: there are definable limits to the effectiveness of U.S. pressure even among our staunchest allies.Brexit-EU-referendum-Cameron-cartoon

While the U.S. has a long history of interfering in the votes and rights of sovereignty in developing countries, recent years have seen an even more widespread abandonment of neutrality. This year, President Obama traveled to England to push REMAIN, (the faction in Britain that wanted to stay in the European Union). The U.S. Trade Representative threatened an increase in trade barriers against the UK if Leave succeeded.

Yet Leave they did. It was old school GOP strategy, adopted by a too-eager-to-compromise Democratic President.

It also showed that conservative xenophobes in Britain are just as averse to hard facts as their cousins in the States. Want to see a clueless electorate? The day after the Brexit vote, Google UK reports the most searched phrase with a British IP address was “what is the European Union and how does it benefit England?”

Seriously? After they voted? Where were they for the months before the vote? Home taking a nap? The millennials knew for pete’s sake. Get off of facebook!!! Quit playing Candy Crush! No more tea and crumpets for you old people! (full disclosure, I’m 63).

Never underestimate the stupidity of an electorate. Welcome to Fox International.

The consequences of Brexit should not be overstated yet however. As a legal matter, nothing has changed and the UK government (Parliament) is free to ignore the referendum results. Let’s say, however, that the UK abides by the vote,(unlikely) or the EU decides to teach England a lesson and forces them out. As Nobel-Prize economist Paul Krugman notes, there are economic upsides to that scenario, but exponentially more downsides.

LEAVE enthusiast, Boris Johnson, a “colorful” (think British Tangerine Man) upper-crust Conservative, emerged as the leading candidate to take Cameron’s place. Like Trump, Johnson has shown total ignorance of Macroeconomic’s inner workings and how they drastically differ from business and personal economics. Johnson embodies the same naiveté that consumes so many economic back-seat, Monday-morning quarterbacks in the U.S. electorate and punditry.

Let’s just say that it’s a very safe bet that anyone who thinks a government can be run like a business has the same ratio to working knowledge of Macroeconomics that EVERY Monday-morning, potato-chip munching, cheese-dip slurping fat ass has, to ANY  NFL quarterback (except maybe Johnny Manziel).

For years, the EU viewed economic management through the lens of game theory and tried to structure “motivations” to punish possible defectors from the EU project.

Presenting threats disguised as “motivations” might be advisable in business contracts between evenly matched private parties, but it makes no sense and works nothing like the mathematical and physical set of the dynamics of governance or rational economic policymaking.

It’s time European authorities admit their failures and change their tactics. Here’s a thought. How about offering a positive vision for Europe; more democracy, more transparency, more fairness, and most importantly, economic policies backed by proven economic theory at a governmental economic level?

As did the UK and U.S. in the run-up to the 1930s Great Depression, the movement in the UK to let right-wing, anti-immigrant, xenophobic leaders have charge over economic policy and deregulation, is not the driving force of the massive loss of confidence in European institutions. It’s the profound and totally avoidable failure of European leaders to use stimulative economic efforts to right their sinking economic ship since 2007. And since politicians are loathe to admit when they’re wrong, consider: Spain-depression. Greece-depression. Italy-damn near. Portugal, Ireland, Scotland-damn near.(see: The Eurozone Crisis-Civitas http://civitas.org.uk/content/files/TheEurozoneCrisisOct2010.pdf).

How many times can middle-class electorates keep making the same mistakes and expect different results? Eurozone conservatives made the same timing-related mistake that conservative Americans are shoving up our a**….putting extra money into rich pockets and curtailing growth stimulation at the exact wrong time. Is it that they simply don’t understand or don’t care? Is it a well-honed strategy of the elite to keep the middle-class struggling? It works time and again, so probably the latter.

Middle-classes have to educate themselves to the fact that governmental and globalized economies have cycles–expansion, retraction, recovery, rinse, repeat. And policies must be adjusted properly regardless of political  ideology and changes in majority parties. Economic policy-making based on political, rather than well-known recurring economic cycles is beyond stupidity…it’s malfeasance for the sake of political expediency. Austerity or paying down “debt”is an absolutely appropriate policy…..but during economic expansion (boom)when there’s extra governmental income! Not during a retraction (bust).

The totally avoidable U.S.-caused worldwide Great Recession has cost the U.S. and European citizens tens of millions of jobs, trillions of dollars in lost income that’s gone to the wealthiest 1% of the population by giving them free money–via tax cuts and corporate welfare–that have never in history stimulated growth, demand for goods and services, or jobs during an economic downturn. Never. And it is sacrificing the worldwide younger generation at the altar of fiscal consolidation (monopolies), “structural reforms” (deregulation) and eerily similar economic inequality to the 1920s-30s.

Worse, Americans could once depend on an independent, unbiased news media. “News” is now owned by six entertainment companies who only care about ratings not the truth—and they directly benefit from contrived conflict, and corporate tax breaks for their parent companies, and thus have blatant conflicts-of-interest.

Broadcast U.S. media and the US electorate can’t even be bothered to look at what did happen to Louisiana for the last eight years,(see: How Bobby Jindal Broke Louisiana’s Economy and University System) and what is happening right now in Kansas (see: Kansas’s Never-Ending Budget Mess) using the full-blown conservative, Laffer “never-successful-in-recorded-history” economics theory, in all it’s glory–that with enough tax cuts for business, economic growth will result). The disastrous consequences this theory inflicts is right there every day for any dumbass to see first-hand,(see: Why Laffer Lingers: Tax Cut Snake Oil Is Still for Sale).

Maybe if history didn’t reflect that the exact same mis-timed policy that provoked the first U.S. Great Depression, and recently bankrupted Louisiana and Kansas, maybe the ignorance could be forgiven. But for god’s sake, it’s right there in black and white every day if people were less concerned with how big the Kardashians’ asses are and more concerned about facts over rhetoric.

How fortunate that my generation, baby boomers, escaped the Great Depression, World War II, and the New Deal that rescued the U.S. But our failure to stop the re-creation of the exact same conditions, and sleeping through repeals of every single safeguard that kept us safe from a repeat during our lifetime is unforgivable.

How unfortunate for our sons, daughters, grandsons/granddaughters that we not only didn’t study it, we don’t understand it even now. If you truly give a damn about THEIR future, wake your asses up to reality and quit listening to bloated blowhards.

  • Climate change is real.
  • Clean air and water is finite.
  • When the oceans die, so will our atmosphere.
  • Our electric grid, highways and bridges are crumbling. We could power the entire west coast by laying 30 square miles of American made solar panels, installed by American workers, in the 25,000 square mile wasteland of the Mojave Desert.
  • A pipeline from Canada to Texas, built by Canada, for the good of Canada? It’s stupid. 45% of all of Germany’s homes are totally powered by solar panels already. They are a gold mine.
  • Cutting taxes on the wealthy has never and will never create jobs. Only more demand for goods and services from a healthy middle class will create jobs.
  • Privatizing Social Security and Medicare will not keep Big Pharma from charging $1,400 per month for a little bottle of stuff to cure toe fungus (nor will you hear that tea tree oil for $7.95 will do it just as well).
  • Somehow despite billions in research grants and modern technology they just can’t cure cancer or diabetes, while polio and smallpox were eradicated with little more than microscopes in college labs!! Surely it can’t be because we have healthcare-for-profit insurance companies.
  • Medicare, the largest payer of drugs IN THE WORLD can’t negotiate lower drug prices for the elderly in the same way Fred’s Dollar Store can negotiate, because it’s forbidden…by law?
  • Democrats can’t even reduce the $4billion a year our taxpayers pay to foreign-owned oil companies to pay their rent to other foreign-owned oil rig companies? For which we get nothing? Why do we pay it at all?
  • Why are Social Security taxes only levied on the first $118,000 of wages? Why is Social Security levied on productive income (wages) but not Investment Income? Why is Investment Income taxed at half the rate of Productive Income?
  • Dramatically increasing tariffs (see Tangerine Man) is extremely inflationary, will not add jobs, but will severely limit consumer choices. If Americans knew that Trump’s tariffs would make their iPhones cost $2,500 or tv’s and computers quadruple in price overnight, they might feel like those idiots in England who voted to LEAVE before they Googled why they were in the EU.

Government does not and can not run like a business any more than water can freeze at 45 degrees Fahrenheit. The laws of physics actually do apply even if you don’t personally understand them, as do laws of Economics.

No, Donald, you cannot “renegotiate” government debt. You obviously don’t even know what “government debt” means. With whom would you negotiate? 80% of U.S. debt is intra-government. You lose worldwide U.S. credibility, credit rating, the billions made from being the world’s reserve currency, etc., the first time we tell T-Bond owners, so sorry, we won’t pay you but half what we said we would. Maybe that works in business where you can file bankruptcy so you don’t have to repay your debts (like the self-proclaimed King of Debt does), but not our government! Besides, what would you re-negotiate?

  1. Would you “re-negotiate” what the pension fund owes Congress, Supreme Court Justices, etc. for life? Try to get that bill passed Donald!!
  2. Would you “re-negotiate” what the DOD owes Social Security? Or what Homeland Security, or the FBI, or Secret Service owes their own pension fund? Good luck going out for golf Donny.
  3. Would you “re-negotiate” the T-Bills China and Japan bought as safe-haven investments? They each only hold 7% of the total outstanding “debt”. Immaterial. The remaining is spread thinly among 30 other countries and U.S. citizens who own T-Bills and Savings Bonds.Immaterial. You might be the King-of-Debt-for-Profit, or King-of-Scams for which everything you “own” is highly-leveraged, but you cannot “re-negotiate” government debt like the blackmail you do with your every failed businesses’ creditors or the student money you swindled out of students with your bogus, unaccredited “University”.
  4. In any business in the world, is there a scenario where the Purchasing Department would owe the Sales Department? NO!! Businesses don’t operate the same way as governments!

Brexit may even increase worries in Congress about the blowback over the Trans-Pacific Partnership which partners the odd-couple of the GOP and the Obama administration. While this gets an A+ for shrewd Beltway tactics, it gets an F- if the goal is to build popular support for a forward-looking international agenda.

The Brexit vote showed regret setting in the very next day, when the euphoria of “stickin’ it to the man” started to wane and reality set in; like a young man’s first $20 “conquest” with a member of the world’s oldest profession only to discover this sudden rash beginning to itch the next day.

And if Tangerine Man, or any Republican President tries to emulate Herbert Hoover’s misguided goal of paying down debt and cutting taxes on the wealthy during an ONGOING economic downturn, it will bring us full circle back to the 1930s.

That’s the enduring legacy baby boomers want to leave?

Harvey Gold

  1 comment for “Brexit: The Day After-What Happens Now?

  1. July 12, 2016 at 11:18 pm

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