Friday, June 24, 2016

Brexit or the wages of frivolous stupidity

What an irony it would be if the Leave vote led the U.K. to break up before the E.U. does. But after a remarkable night and morning, that didn’t seem beyond the bounds of possibility. Very little did. John Cassidy - The New Yorker
British Prime Minister, David Cameron's totally gratuitous decision to convoke a referendum on Britain's remaining in the European Union, Brexit, is a perfectly amazing example of the effects of frivolous stupidity. The rest of us are to be helpless witnesses and perhaps direct victims of his decision for years to come. 
David Cameron, the British prime minister, has no one to blame but himself. In 2013, besieged by the increasingly assertive anti-European Union wing of his own Conservative Party, Mr. Cameron made a promise intended to keep a short-term peace among the Tories before the 2015 general election: If re-elected, he would hold an in-or-out referendum on continued British membership in the bloc. But what seemed then like a relatively low-risk ploy to deal with a short-term political problem has metastasized into an issue that could badly damage Britain’s economy, influence the country’s direction for generations — and determine Mr. Cameron’s political fate.  New York Times
If you like reading history, you'll come across many examples of such frivolity and stupidity doing massive harm to millions of people.  George W. Bush's decision to invade Iraq is a textbook example. Millions of people have lost their homes or lives and one of the world's most critical regions is in the process of disintegrating.  

Could Cameron's Brexit have an effect in any way comparable to Bush's opening the gates of hell in the Middle East? 

Knock-on effects are about cascading disasters. The world's economy is still shaky after the crash of 2008 and in today's globalized finance everything is interconnected. How could Brexit set off a chain of disasters?

An example: UK capital, London, is today the world's most important financial center:
London has swapped places with New York to become the world’s leading financial centre, according to a detailed study of 86 cities. Financial Times
It is axiomatic that money hates uncertainty:
One of the only things we can say for sure after the Brexit decision is that the U.K. and Europe are entering a period of great uncertainty. The New Yorker 
It is easy to imagine the knock-on effects of a major disruption of the intricate and intertwined activities of a place where the good and the great of the entire world go to trade currencies, bonds, shares, privileged information, launder and store their money, you name it. 
One likely outcome of negotiations is that banks and financial firms in the City of London will be stripped of their lucrative EU “passports” that allow them to sell services to the rest of the EU. The Guardian
You can't imagine the knock-on effects of disrupting such a place? Think Lehman Brothers just for starters. If one major financial institution starts to unravel, the entire shaky recovery of the world economy could collapse.

Leaving Financial Armageddon behind, the ordinary human effects of  Britain's leaving Europe are worth describing: British young people will now find it difficult to reside or work in EU countries or study in their universities and talented young Europeans will find it difficult to do the same in the UK. This will have significantly negative effects on generations to come.

The future of  Britain's young people is finally the greatest victim of Brexit, but not just the young.

Here is an example of the sort of micro-tragedies that can befall elderly British people here in Spain, where I live. Thousands of British pensioners on retiring have sold their homes in grey and rainy Britain and with their life savings bought homes on the coasts of Sunny Spain, where as members (till now) of the EU, they have a right to residency, socialized medical care and even get to vote in municipal elections. Imagine their distress as they watch all of these rights disappear and even the value of their investment sink.

All this disruption because of what the President of the European Parliament Martin Schultz, calls "a whole continent (being) taken hostage because of an internal fight in the Tory party”. DS

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