Brexit vote fallout opens eyes
Richard Fulton
It has been a week in which Congress could not bring themselves to attack the dangerous Zika virus.
After all, it is a dangerous health threat to Americans and others, so why would Congress want to spend money on it when they are in such a hurry to get home for the 4th of July?
The long drawn out hearings by a Republican dominated committee on Benghazi finally, after spending $7 million to replicate five other investigations into that troubled incident, finally came up with the conclusion that there was no evidence Hillary Clinton had any fault.
The real shocker of the week, however, was the vote by the British people to exit (Brexit, as it were) from the European Union. The history of that iconic union of former enemies has been one of step-by-step integration of economic and social/economic policies and practices among the member states.
Ignored by the voters of Britain were the economic ramifications of an exit and the ramifications for its dominant position in European financial markets. The backlash has been harsh and immediate. Three million people signed a petition to have Parliament refuse to exit the union. The vote was an advisory one that theoretically the government could decidenot to follow.
There are some lessons to be learned from the experience of the British.
First, we must remember that we live in a world economy. What happens in major economic centers affects all economic centers. The EU, of course, is going through a wrenching reevaluation of its foundations.
America may be affected by the Brexit vote even though trade with Britain is not a very large percent of its overall economic trade, it is an avenue into EU trade.
Also, the American dollar has been strengthened by the move and this means it will be more expensive for foreigners to buy American goods.
Manufacturing will feel the some pinch. The financial industries that were not prepared for 2008’s disaster have been better positioned to deal with the financial implications of Brexit however. This, incidentally, because of the regulations of the industry placed by the federal government after 2008 that Republicans want to dump.
It is the British financial industry and its role as an important center of European finance that will suffer most.
International companies that have used London as a center of operations may find continental countries better suited for their headquarters.
The more general lesson to be drawn from the Brexit vote, and the campaign for that exit, is that campaigns too often vastly misrepresent and manipulate the potential outcome of elections.
In particular, beware of extravagant promises made by campaigners. Too often the promises made have no basis in reality.
Note the pro-Brexit forces promised before the election that the National Health Service would receive the money presently spent on EU membership costs — more than $425 million. Only hours after they won, Boris Johnson, the leader of the Brexit movement, began saying that the money wasn’t promised, only brought up as a possibility.
Immigration was a main reason that many Brits voted for Brexit and a main part of the campaign to get out.
Again, the next day, the Brexit leadership began a campaign to convince people that Britain should stay in the European Economic Area (common market) portion of the EU which demands free flow of citizens from one country in the market to another.
So Britain wants to leave the European Union but keep membership in its most important economic elements — regardless of the social obligations that go along with it.
British voters were sold a bill of goods.
Many see Brexit as a harbinger of the outcome of the American presidential election.
Remember, though, that the British integrate the two branches of government. They have a parliamentary system in which a strict party majority rules and chooses the chief executive. We have a separation of powers system in which all are elected separately.
Thus we have a messy system, especially as now when the president is a Democrat and the Congress has Republican majorities. Which means that a single issue as the Brexit vote cannot determine the leadership of the entire government.
Which seems to be the results of the British election.
