My take on key issues from UK #Euref

By Baba Grumpy

I would ordinarily have wanted to write about football today but the recent decision of a majority of United Kingdom voters to choose ‘Leave’ instead of ‘Remain’ has motivated me to put my thoughts down this way. 

DEMOCRACY

As you might have seen on Social Media, it is obvious many people are only on the side of democracy to the extent that their choices are reflected in the outcome.  I think we should all praise members of the Monster Raving Loony party. Registered as a political party in the UK since 1983. They have never won an election and are unlikely to ever win one, they always lose their election deposit but you never see them throwing their toys out of the pram like toddlers after losing.

Democracy is quite simple. The majority carries the vote. And the beauty of it is that the people deserve the side effects of their choices. Unfortunately I have read from many people, bellyaching about old people voting to Leave and ‘ruining the lives of the young’. Personally if a life changing decision needs to be made, I will rather the old person decide than a 18 to 24-year-old whose understanding of the world is quite limited. And to think that more than 1 in 2 of the young didn’t even bother to vote. They were so concerned about the outcome that they decided to stay at home.

RACISM & ANTI-IMMIGRATION

Leavers have all been labeled as racists and anti immigrants. Without question, one of the fundamental cornerstone of the Leave campaign is anti-immigration. However you can be anti-immigration and not be racist. And you can be racist and pro- immigration. Racism is not the preserve of White people. South Africans resent Nigerians and have tried severally to keep Nigerians out of their country. Nigerians have kicked other West Africans out. Black people, white and brown people can be racist and can be anti-immigrant.

Do the poor in the UK have genuine resentment towards foreigners? Yes. You don’t need to have any logical reasons to feel resentful. There is a reason why Christians are exhorted to love their neighbors. This is because the Bible recognizes that resentment is a normal and ever present human emotion.  Also, parents tech their children about stranger danger and we then wonder why UK natives are resentful of strangers.

Personally, I stop short of where resentment turns into actual/ physical actions against the subject of your resentment. Looking at it from the prism of the  ordinary citizen of the UK, he has not benefited from the EU. The rich have their cheap labour and are getting richer. Same with the middle classes who have their high house prices. But the poor are expected to be gracious when receiving their dole money, which is sufficient to buy kebabs and cheap beer.

When there is a financial crisis like we had in 2007/8 and the budget needs to be balanced, the government takes an axe to the ‘barely – there’ dole money of poor people for ideological reasons couched in financial terms. The government then goes a step further by attempting to cut disabled people’s allowance while cutting the tax of well – off people and exercising hypocritical timidity in dealing with tax ‘evading’ multinational companies.  And you don’t want resentment. How?

Immigration brought me to the UK so I am not against immigration. Like EVERYTHING,  too much of everything is bad just as too little of good things is not good enough.

I personally believe that free movement of people in OLD Europe (Germany, France, Spain, Portugal, Holland etc.) was a good thing. The only reason a German wants to come to the UK and vice versa is usually because of some highly skilled work and probably love/hobby (weather, romantic etc.) not because of necessity. When the EU expanded eastwards  and also later when global economies tanked in 2007/08 all of that changed. People needed to move out of necessity. The UK under Tony Blair either deliberately or mistakenly did not invoke the hand brake it could have invoked and allowed people from Eastern Europe move to the UK in droves. Analysts are united in saying that this movement changed the face of the UK forever. I agree.

Communities have changed, the natives’ feel they are lacking in identity. I sympathize. Many have accused the natives of laziness and unwillingness to work. I disagree. I live amongst them and socialize with them. There are many who want to work and do work. There are many who are incentivized by the system not to work because the welfare system encourages them. There are many who can’t afford to compete with migrant labour because as natives their overheads are generally higher than that of the migrants. All of these have been exacerbated by the poor economy in traditionally strong Western European countries like Spain and Portugal.

Personally, as a professional and possibly middle class person, I resent the effect the free movement of labour has had on me. If I want to bring a new spouse or family member into the UK, it will be near impossible irrespective of their professional attainment. However the fruit picker from Slovakia can strut into Stanstead Airport or Felixstowe Port with all members of his immediate and extended family and settle in the UK. And you don’t want me to resent this free movement.

No matter the terms of the negotiation for the UK to leave the EU,  there will be a need for migrants. Especially highly skilled migrants. The UK is not producing enough doctors, nurses etc. and will need to bring more of these into the country. Nobody dislikes these type of immigration including racists loon. They might not want Dr. Dudu from Africa to treat them at the hospital but are quite happy with Dr. Blanco from somewhere in Europe. So voting Leave is not anti-immigration or racist in its entirety.

EXIT PLANS

The latest hoo-hah today is the fact that Leavers do not have a plan for Brexit. Unfortunately the people spouting this do not understand how government works. It is not Boris Johnson or Michael Gove’s place to have a detailed 1000 – page document detailing plans for Brexit. Also much of the plan will need to be formed before Article 50 is invoked and will require cross party, labour unions & Corporate UK’s input.

Boris & Gove’s role in campaigning in a referendum was putting out their broad plans – quitting the EU if it won’t work for the UK; taking control from EU bureaucrats; immigration reform etc. How will the nuts and bolts work? You and I as tax payers pay lots of civil servants in Whitehall to work out the details. At the moment, neither Boris nor Gove control any of these civil servants. If the government was doing its job, they should have a contingency plan for either a Leave or Remain decision. Can we direct our cannon at Whitehall if we are looking for the UK’s plan for Brexit. Personally, I hope the EU will see reason. I believe almost every analyst including the vehement Pro ‘Remianers’ are united in saying that the EU needs to be reformed.  There are several accusations of corruption and there are fundamental issues about representation/democracy.

From the financial angle, the EU project is not the success many think it is. Greece is an obvious example. The economy of Spain, Italy, Portugal are suffering. The Eastern European countries are not better off. Germany enjoins a competitive advantage because of the Euro. Many economic analysts are definite that without deeper political union, the Euro is doomed to failure and I do not think deeper political union in the EU will happen in our lifetime. So wither EU?

I have read this morning that Germany & Merkel have a ‘secret crush’ on the UK and will do all in their power to ensure the UK gets a reasonable deal in their negotiations with the EU. I believe this as it has been written by a senior journalist with The Economist who is on the Remain side. Also I am aware that all those BMWs/Audis / Mercedes Benz manufactured in Germany will not buy themselves and Germany will not shoot itself in the foot quite unlike bureaucrats like loose lipped Jean – Claude Junkcer who as the head of the EU must defend his fiefdom. If you want to read the Economist Journalist article, you can find it here.

Personally I am of the opinion that if the option came down to dismantling the EU or giving up / modifying free movement and other red line items, sensible people like Angela Merkel will have to make concessions. To this extent, I believe there will be a new referendum in 18 months not because 4 million people have signed it but because (I believe) the EU will offer concessions during the negotiations that will necessitate a new referendum. The EU will do this for self preservation and not love or hate.

SCOTLAND, LONDON, NORTHERN IRELAND

Scotland independence apparently looms and many are happy and are using this as another stick to beat the Leavers.  Yes dream on. For a 2nd referendum in Scotland to happen, Westminster will have to say yes. Also the people of Scotland will have to say yes too after Westminster’s ascent. The last Scottish independence referendum was close and took place in an atmosphere of high oil prices and a view that Leavers were all in the Farage camp. Now Bottled water is more expensive than oil and majority of the UK has voted for Leave.

So here is my view. I dare the Scots to vote OUT . They will suffer and Greece will be paradise compared to Scotland. They are net receivers/net takers in the UK. The English pay Scotland’s bills. Also the EU has shot down the idea of preferential treatment for Scotland’s membership of the EU. So Scotland will be behind Turkey in joining the EU. Also as it stands, Scotland  will fail the economic criteria for joining the EU. Since we have been told Turkey will never join the EU, I leave you to work out Scotland’s fate. I also wonder what Spain with its Catalonia problem will think of Scotland leaving the UK and its attempt to join the EU.

On Northern Ireland, the Republic of Ireland have shot down the case of both Ireland merging. They think they have bigger fish to fry at this moment. So again,  Wither Northern Ireland? In fact some in Westminster are already taking bets that the Republic of Ireland will be the next country to leave the EU if the UK navigates its way out with minimal impact.

London Independence is a non-starter. 5 boroughs of London voted for Leave. 40% of London voters chose Leave. I do not think there is political consensus for independent London and it wont happen. 

ECONOMY

Many on the Remain side were quite definite in the looming apocalypse if the country dare decide to vote Leave. While I understand the decision of politicians to peddle any line they want, I think economic experts ought to have been circumspect with their comments. I expected to see things like ‘worst case scenario’ riders in lots of the extreme pronouncements by experts. None were forthcoming. I was very disappointed with the Bank of England governor who should have recognized that his opinions were deployed to political ends and should have negotiated with both sides not to politicize his views or restrict his comments to balanced Bank of England commentary.

I am amused that so called experts are crying into their lattes about the common man’s derision of their so called expert opinions disguised as facts. First you prostitute yourself to big money, then to big politicians and you want the common man to drool on all of your pronouncement despite the fact that you no longer have credibility. How come? Reputation is key in any endeavor even in in criminal ones.

Economics is not a physical science. There is no law of gravity in economics. ALL economic theories & principles have exceptions.  Reminds me of the joke about the one-handed economist who is unable to recite that catchphrase beloved by all economists. “On the other hand” because he only has one hand. Economic experts are a just one notch above lawyers in their ‘spiviness’. A lawyer can defend a cold blooded murderer and can also appear for the prosecution depending on the size of the fee.

The same Economists didn’t predict the global financial crisis, the same ones who have backed Cameron and Osborne’s cack handed economic policies, the same ones who base their economic models on the common man’s economic  decision making are all of a sudden upset at the common man’s decision making on whether to Leave or Remain, Please Google how many times the IMF has had to say sorry for its wrong and pig-headed forecasts including recommendations made to Nigeria in 1984/85.

No. I am not surprised that the common man doesn’t trust experts. I know enough not to trust them as well because nobody has a crystal ball, not even economic experts.

All the prediction of doom has yet to come to pass. Yes markets have been volatile but that is their nature when monumental events happen. Exchange rates have been volatile. But lets see what happens in one week, one month, one year. Not one day. There is even talk mortgages might be cheaper. Who could have ‘thunk’ it? I think all Remainers should donate any reduction in their mortgage costs to Charity or to the Common Man if they are not to be seen as hypocrites.   And by the way, the Leave decision is impacting stock exchanges all over Europe.

On a final note, we should all realize we are in uncharted territory. The Conservative Party needs to elect a new leader and hence a new Prime Minister. There is talk of a general election. The UK will need to invoke Article 50 and negotiate the terms of Brexit. The negotiation will determine the way forward. But remember the EU has as much riding on the UK voters’ decision to Leave as the UK itself.

Baba Grumpy works in Financial Services in the United Kingdom. He blogs mostly about football at http://babagrumpy.blogspot.co.uk. His Twitter handle is @BabaGrumpy