What will become of the Special Relationship between the United States and the United Kingdom in coming months and years?
What will become of the funds in peoples varied accounts and peoples varied investments in America and the world?
What will become of the European Union?
These are all questions brought to the fore by the recent event called the BRexit Referendum. They are important questions and will only be slightly ventured into within this post but it is possible that some more insight may be forthcoming from other portions of this site past, present and future.
This blog is a place in the wide world where very ambitious plans (which to many would seem absurdly ambitious and very unusual) are put forward. But the reason that I do put forth such plans is in part because the economy does not just respond to purely economic forces and purely economic plans made by typical economists are not likely to steer it all that well. Nor do I believe that conservatism — which I lay claim to here repeatedly –means having no plans at all. In fact I believe both planning and a limited socialist and communitarian element belong in any healthy conservative economic philosophy. Among many plans in this blog is a desire expressed to bring the United States to a floating quatrimetalism which is something like the gold standard. As I type this many are rushing to gold. Compared to either panic or the pure gold standard this standard might actually seem moderate. But in recent years it would usually have seemed very bearish and conservative indeed.
Do you come to this blog to get a sense of what stock market and financial trends are urgently important? Perhaps you should. I seldom discuss market volatility or warn of impending short term risk in that aspect of life but prior to one of the biggest crashes in my lifetime my humble blog warned of the possibility in time for a handful of readers to have called their brokers and accountants if they were inclined to do so . But I make no claim to being unique in pointing out the risk, nor to having given specific advice. Nonetheless, the overall pattern of advice here seems to have been better than that being offered in some other quarters.
Britain Exits — the United Kingdom is finding a path forward without EU membership. Company will not be kept by the same countries in the same way ant longer — or so it all would seem. The news which has been developing includes a seeming set of contradictory signals from various places as to how fast this split should be. Voices are urging speed in the EU, as seen in detail here. But there have been voices from Spain, the UK and several other countries that have emphasized the need to proceed at a measured and not overly hasty pace. The question on the most minds these days seems to be how severe the financial and economic impacts will be. Alan Greenspan. former Federal Reserve Chairman of the United States of America has been a voice warning that there could be extensive and extended effects. TIME has been able to put together an article that is much more optimistic, that is linked here.
France one would think is still France, Germany is still Germany, the UK is still the UK. Italy may even be Italy and so forth. One feels when a severe corrections sets in that there were reasons in the market for panic. One suddenly sees Europe, the U.K., stock markets and financial markets as well as other institutions in a different way than one saw them before. During the Chinese crisis a while back I urged a more moderate view of the crisis than was then in vogue but I did not produce any large autonomous piece on the subject which I can now locate. However in the case of BRexit I posted on this subject just a day before the historic vote. That post is here.
I began with these words:
The British who it seems are by far America’s closest association in the world — even if to me it is not obvious that this must or even should be the case or deciding whether of not to leave the European Union. NATO is surely in decline and is troubled despite being very big and victorious. As a Cajun I would like to see better relations between the US, France, Belgium, Spain and the UK especially. But realistically those relationships may be as good as they are going to get. the Brits who want to stay in the EU fall into those who see Europe as a country and say the sooner it becomes a superpower nation state the better and those who believe it is better for British interest to stay in the EU. Those who want to leave include people who fear woes of limitless migration, economic collapse and cultural corruption in the new order. But the real thorny issues are not simply resolved into two camps — but the votes are in tow camps. Some have said the shooting in Orlando helped the leavers most — called Brexit. BRexit can argue that families like the Mateens can arrive anywhere in Europe and strike anywhere else and nobody has a chance to know the risk. Some who want to stay in believe Europe must change and offer better collective security and that will be best for Britain.
Armed with a few links to various articles, I raised the alarm on a potential Stock Market Crisis to those among my readers who might not have been prepared.
The lack of certainty this vote has created in the stock market and elsewhere is discussed here. But this is an analysis mostly of how the markets will react if BRexit beats the Remainers. It is a bit more complicated to decide whether the current process itself is affecting financial markets and other economic indicators, perhaps some of that complexity can be recaptured here.
So BRexit has happened. Why did it happen that Britain left first because there was a referendum. Lord Norton discusses that here. TIME has put together an approach to why there was a referendum as well, a sort of history linked here. But here is a telling quote from Lord Norton in a post linked herein a post linked here:
In the post-war era, the issue of European integration has been a fault line of British politics. Both main parties have been divided internally and both have changed their stance on the issue. However, there has been no formal requirement for a referendum on the issue. Harold Wilson used a nation-wide referendum, a constitutional innovation, in 1975 in order to resolve conflict within the Labour Party. David Cameron moved to initiate one in response to conflict within Conservative ranks. The roots are to be found in the last Parliament. Details can be found in the chapters by Phil Cowley and me in Seldon and Finn’s The Coalition Effect.
There was no commitment in the Conservative 2010 manifesto to a referendum on continued membership of the EU. The crucial development was the decision of the newly-formed Backbench Business Committee to schedule a debate, initiated by Conservative MP David Nuttall, in October 2011, calling for a referendum on the UK’s membership of the EU. Had the Committee not come into existence the previous year, with responsibility for scheduling debates (which it did on the basis of proposals from private Members), there would almost certainly not have been a debate – the Government would not have found time for it. Despite a heavy whipping operation against the motion, 81 Conservatives voted for it.
The Referendum may or may not have been the right or best thing to do but it was note purely inevitable. Had it not happened the EU and the world would have muddled a long a bit longer on a more similar path. What happened after that is up for debate. I discuss reasons below why I think that things were not so secure as they seemed. But for now let us turn to what did happen.
This is the link to the speech in which David Cameron announced his intention to resign after the BRexit vote. Cameron invested his very considerable political capital very heavily in this referendum. We may well hear from him again but he is tied to it forever. Tizres a commenter on this blog on occasion has on her own blog posted a while ago a post linking Cameron and the EU over time and this has surely proven her right on that and other scores as well. The BRexit may well see a resurgence of the Commonwealth, a stimulus to improve the EU constitution, the impetus for liberty enshrined in better rules around the world. It may be a very good thing. Whether good or not it may be necessary. But today it is a scary thing for many and the most obvious sign of that is the crash in the stock markets and the worldwide wealth erasures. We shall see where all that leads. There is a great deal more that can be said about BRexit and that has to be said somewhere and perhaps many places if the current political environment is to be properly understood. Here is one place I have been discussing such things. Lord Norton had already had something to say on all of this issue which has led to BRexit, he tangentially discussed it here and has now said a good bit about the mechanic of the thing here in a brief and early post. The results of all this are likely to be significant for many people.
The European Union has 28 member countries, here is the list from the European Union’s own official website :
- Austria (1995)
- Belgium (1958)
- Bulgaria (2007)
- Croatia (2013)
- Cyprus (2004)
- Czech Republic (2004)
- Denmark (1973)
- Estonia (2004)
- Finland (1995)
- France (1958)
- Germany (1958)
- Greece (1981)
- Hungary (2004)
- Ireland (1973)
- Italy (1958)
- Latvia (2004)
- Lithuania (2004)
- Luxembourg (1958)
- Malta (2004)
- Netherlands (1958)
- Poland (2004)
- Portugal (1986)
- Romania (2007)
- Slovakia (2004)
- Slovenia (2004)
- Spain (1986)
- Sweden (1995)
- United Kingdom (1973)
On the road to EU membership
- Kosovo *
The list above shows the difficulties compared to the United States of America. In the United States we have the Senate where votes are equal and the House where votes are by population. Then we have an Electoral College where votes are identical to a State’s votes in each of these houses and they elect our President. We have a Supreme Court charged with seeing that the basic system is preserved. i think our own system is corrupt and this blog is a place where I have spelled out model constitutions for the United States and for Louisiana. But our Constitution as it was originally approved and as it exists today has the basic components to make it possible to preserve healthy state identity and a healthy federal union — just barely so in my view. However, the EU is made to work by will and skill without really having anywhere near and adequate constitutional framework. Whether others leave or not that is clearly the case. But it has been a socially and politically cheap arrangement and now it has failed a major test. The people who paid r it to survive as it as it was were equally the US tax payers and the Soviet and Russian people who kept up a nuclear terro balance that left Europe’s great powers and their vast depository of skilled diplomats and diplomatic resources free to patiently deal with many issues while not being pressured to clearly lead or fight for survival. Would it have been good for them to become a true United States of Europe? People will disagree for good reasons about the answer to that question. But they never built the structures we have. The comparison was always a misplaced one by any standard. Now what will happen next is a different matter — I am not making predictions in this posting.