Monday, July 04, 2016

Thoughts on Independence Day

Well, they went and did it.  The voters of England (except London) and Wales rejected common sense, the leaders of their political parties (except the once-shunned UK Independence Party), all the "so-called experts", and their own conationals from Scotland and Norther Ireland in the surprising referendum vote against remaining in the European Union.

I believe in the maxim that the markets overreact to every new piece of news, and in fact the downturns experienced all over the world, but particularly in the British markets and in the value of the British currency,  have already largely reversed, but I think they actually may have gotten it right the first time.  I have no doubt that Britain will move rapidly into a well-deserved recession, as trade will fall, with trading partners deterred by increased uncertainty. I don't feel that this--alone--will lead to a global recession, but, despite the denials by most of the Leave advocates, this result will contribute to a trend already underway, reciprocal raising of barriers to trade, which may do so. 

I still have some notion that the result of the referendum is not definitive and irreversible; the constitution of the European Union requires legislation by Great Britain (an act of Parliament) in order to invoke Article 50, which would commence the process of separation.  The Conservative party alone has a majority of seats in Commons, so they could do it without any support from the other parties, and I would hope none of the members of other parties (with the exception of the single UKIP member, and the possible exception of the Wales nationalist party, but I doubt that as well) are foolhardy enough to support this act.  So, the party would need to hold firmly together to this policy that many, but not all, of its members wanted despite the opposing position of its leadership.  This seems to include the probable new leader, Theresa May, who supported Remain but looks likely to inherit the party's burden due to the spectacular failure of the party's Leave advocates to have a plan to move ahead after it won the vote.  

A strong British Labour party leader--and one doubts that the current leader is such--could make the Brexit gamble so politically risky that some Tories might desert, or, more likely, when things go bad, could win a major electoral victory in 2020 and reverse the disastrous decision.  It might not be too late by then, particularly if the contrast emerges soon enough, to salvage the integrity of the nation and delineate some reasonable terms for re-entry. 

If not, then we are looking at a probable decision by Scotland's voters to separate itself from Britain, renewed trouble between Northern Ireland's Protestant majority and Catholic minority, and, regardless, continued centrifugal forces within the EU:  in the words of the Irish poet Yeats, "the center cannot hold".   

Britain's loss--of prestige, of business, of the strength of its currency and its debts--may translate into some gains for the US, but we should not cheer the English show of its independence.  In the long run, its weakness, and that of the EU, will do us no good.  I would hope that the EU will respond to this challenge by strengthening its legitimacy and capability to act in a unified way.   I would also urge all to show patience and avoid further hasty action:  I remind all that the US needed some 13 years to go from its own Declaration of Independence to the establishment of its Constitution, with the failed attempt of governing through the Articles of Confederation in the intervening years.

For a clear, simple, humorous, but factual review prepared especially for Americans to understand the current status of Brexit, I recommend the post at this link. 

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