Saturday, July 2, 2016

THE PRAIRIE EDITOR: Getting Post-Brexit Wrong, Too

Most of those who got Brexit wrong before the referendum
vote are getting it wrong again after British voters upset
them and their faulty predispositions.

Many commentators, themselves anti-Brexit, are preoccupied
with the short-term reaction in world markets (predictably
emotional), Boris Johnson’s withdrawal from the Conservative
Party’s leadership contest to replace resigning Prime Minister
David Cameron, and the trumpeted, but not disinterested
predictions of the vote’s economic aftermath.

After dropping worldwide immediately after the vote, most
markets, especially in the U.S., have recovered most of their
losses. Volatility will remain, of course, as markets and
investors more thoughtfully assess the true post-Brexit world.

Boris Johnson was not a long-term Brexit supporter, and had a
record more sensational than substantive. To those who know
British Tory politics, his not leading the next stage of Brexit
should come as little surprise.

The long-term impact of Brexit remains unknown,
notwithstanding the dire prophecies made before and after the
vote. Great Britain is the second-largest economy in Europe,
and, to use a phrase from another economic crises, much “too
big to fail.” It has a democratic capitalist economy, and remains
not only one of the world’s major financial players, the Brexit
vote has opened new opportunities for its trade with the U.S.,
Canada, South America and Asia --- places with enormous
economic room to grow.

There has also been a lot of self-indulgent talk by the Brexit
losers of somehow reversing or canceling the vote. That’s silly
talk. Democratic institutions don’t work that way. A majority
of UK voters made a decision. You can’t just wish it away. The
allegation that many who voted for Brexit now regret their
vote is propaganda. Most of those who voted for Brexit are
celebrating, and for good reasons.

It is true that there will be a period of complicated adjustment.
Some sectors and individual firms will suffer, but others will
prosper. Those which adapt and pay attention to the new
circumstances will have the best prospects.

Change is always somewhat painful. Brexit won’t take place
immediately. The Cameron government and its successor will
put the separation process into effect over two years.

The old European Union was terribly flawed and on a collision
course for failure before the Brexit vote. It is now up to Anglela
Merkel and her colleagues to re-formulate their goals and
structures to enable the European nations to continue to
cooperate and prosper under realistic and more successful
institutions and rules.

Neither the British island nation nor the its European neighbors
are going away. They will always need and trade with each other.
But the world is changing rapidly, and Europe will have find its
place in it.

Copyright (c) 2016 by Barry Casselman. All rights reserved.

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