The British vote to exit the European Union this past week, only goes to show that the United States has yet to corner the market on sheer, unadulterated stupidity. By a narrow vote, the normally staid and rational British decision to leave an organization designed to enhance free trade, facilitate easier travel throughout Europe, create a single currency, and grow the economies of all member states had deep-seated ramifications for the entire planet. Alan Greenspan who was Chairman of the Federal Reserve in this country for about 20 years called the Brexit vote the greatest financial disaster in his lifetime. J.K. Rowling of Harry Potter authorship fame stated that it was a victory for all the racists and bigots in the U.K. Indeed, the backlash among many Europeans to the migration of tens of thousands of Moslems into their midst because of all the horrors of war, terrorism and killings in the Mid-East, did provide a strong motivation among the British against continued membership in the EU.
On Friday, financial markets around the globe took a nose dive because of the Brexit vote and lost $2 trillion. Over $2 trillion of the world’s wealth evaporated like the morning mist.The Dow-Jones in this country dropped over 600 points and the bloodletting seems to be continuing as the Dow is down another 300 points today even as I write this piece. British Prime Minister David Cameron, as decent a politician and leader as exists in today’s world, was forced to submit his resignation (effective in October) because he strongly opposed the United Kingdom’s exiting the EU. Scotland, on of the 4 member states comprising the UK, (along with England, Wales and Northern Ireland) voted in favor of remaining in the EU and is now talking about leaving the UK so it can stay in the EU. Scotland had previously voted on whether to free itself from British rule, and that measure lost by a narrow margin. Now it wants another such vote which would likely succeed this time around. The British themselves are now having buyer’s remorse with over 2 million signing a petition to have a do-over vote. They’re asking for a mulligan, if you will.
As with the Trump fantasy in this country, education and economic status played a huge role in the vote’s outcome. Over 70% of those with a college education or higher voted to remain in the EU, while a similar number with only a high-school or lower education desired an exit. Similar percentages existed with those in higher income brackets favoring remain, versus lower income classes voting for exit. In the U.S., Trump’s demagogic and xenophobic candidacy and following also has its primary support from the lower economic and poorly educated masses. So what accounts for this type of division that now seems to becoming a world-wide phenomena. The answer may lie in the opening lines of Charles Dickens “A Tale of Two Cities” written in the 19th century, which goes-“It was the best of times; it was the worst of times.” Dickens was describing conditions in London and Paris during that period, but a similar description can be written of the economic landscape in the U.S and Europe in today’s world.
Those British favoring exit kept dwelling on the EU’s fault-lines. Yes, the EU had a cumbersome bureaucracy which added unnecessarily to the cost of membership. Yes, it appeared that the cost burden to the UK of being a member exceeded the financial benefits being derived. Yes, there were a lot of seemingly unnecessary rules and regulations emanating from EU headquarters that people became fed up with. But those on the exit side failed to acknowledge that a ton of trade and tariff barriers among the EU states had been removed and that goods and services throughout Europe now flowed more freely, to everyone’s economic benefit. Now, Britain will have to renegotiate dozens if not hundreds of new trade agreements with its European counterparts, which could take many years. For those British that were doing well financially, it has indeed, been the best of times. But those struggling in the lower income brackets, who are also generally poorly educated, seem trapped financially with nothing but poverty to look forward to. For them it appears to be the worst of times. Or an opportunity for opportunistic politicians to move in and blame all their economic ills on that bumbling bureaucracy known as the EU.
And so it goes in the U.S. as well. America has, by far, the most advanced economy the world has ever seen. For many Americans it’s the best of times with new innovations, new markets, new electronic gadgetry, and better living conditions seemingly advancing on a daily basis. But those on the lower end of the economic totem pole, usually lacking meaningful job skills, feel trapped by their lack of economic opportunity. Seeing how so many of their fellow citizens are living so well, while they’re engulfed in a financial quagmire, makes it, painfully, seem like the worst of times. Another opportunity for a power hungry demagogue such as Donald Trump to fill the vacuum. It’s not their fault that they’re living so poorly he tells the masses. Blame the Mexicans, the Chinese, our NATO partners in Europe, all Moslems, etc. for your economic difficulties. Peddled as skillfully as snake oil salesmen of the 19th century peddled their worthless elixirs, Trump’s neo-fascist demagogic skills now put him within hailing distance of becoming the most powerful man in the world.
So the 2 most prosperous English speaking nations in the world, have put themselves on a path toward economic and political ruin through mind-numbing irrationality. Kind of seems to me like, potentially, the worst of times.