I’m depressed by the Brexit result and even more so by how it came about. Feel free to skip to the week’s good reads.
Some 25 years ago, I set off from the provinces for university in London.
My family waved me goodbye as the train began its journey through beautiful countryside that turned flatter, plainer, and more urban as I approached the South East.
Within hours I was in London – that vast city so near yet so faraway, which I had only visited two or three times in my lifetime and only then for a few brief hours.
I spent the first night walking around West London, astonished that seemingly every other person spoke a different language. Saw buildings from history books. Was amazed to find fabulously expensive cars that I’d only seen in TV adverts just parked out on the streets. Was bamboozled by one-bedroom flats in the estate agents’ windows at prices that now seem a bargain but back then – as I not-so-tactfully I informed my parents from a phone box a few days later – could have bought their semi ten-times over.
Give or take, I never left.
When Monday rolled around, it was time to become the first person in my family to go to university.
I learned two important things on that first day.
One was that they didn’t take a register of attendance, which I knew meant I would only be showing up when I felt like it.
The other I realized when I went to my first big lecture, alongside 150 or so other freshers on my course.
I entered the lecture hall and walked up the stairs towards the back, instinctively finding my level.
I kept going.
I sat down in the back row.
For the product of a 2,000-strong comprehensive school, the message of this seemingly trivial detail was clear.
I was the “hard kids” now. Nobody here was going to beat me up. Never again would I be fearful about the cast of violent, ill-tempered and stupid bullies that made each day at school a lottery as to whether you’d get a punch on the arm or worse – that forced anyone with a brain into unspoken alliances with robust friends, that made you laugh at the jokes of borderline psychopaths or accept the logic of a moron just because they were bigger than you.
I was free. Screw them all, I thought, as I remembered the yobs I’d left behind.
A design for life
Friday’s vote to leave the EU – and the sorts of places where most of those votes came from – was a punch in the guts that reminded me that you’re never really safe from the mob.
Of course, over the years my views towards the worst of my schoolmates softened.
As I began the typical thoughtful student’s grasping towards a political consciousness, I came to understand that to some extent it wasn’t their fault.
Most of even the dumb ones weren’t bad people. There were only a few monsters in each year group. They had almost certainly had terrible upbringings that I’d been lucky enough to avoid, and even if they hadn’t then perhaps they drew bad genes.
I also learned more about how economic changes had really hit hard the land where I grew up, and how even in the good times most of the profits had been siphoned off by owners who lived elsewhere.
I argued with girlfriends from the Home Counties who had no reason to know that not everyone grew up living next door to lawyers, newspaper editors, investment bankers, and directors at major pharmaceutical companies. That not every school was a safe place for learning. That not everyone was encouraged to be the best version of themselves.
Even after I cut my hair, gave up on true socialism, saw the reality of the workplace, and became the capitalist you know and tolerate today, I still tended to vote for Labour (though not exclusively).
In reality though, I’d become part of the metropolitan consensus that had everything to gain from global trade, open borders, and free markets, and saw very little to lose from the way the economy was headed.
I felt sorry for the marginalized, but I didn’t think their problems were my problems.
The second derivative
Perhaps this contrast between my past and my present was why I found a way to disagree with nearly everybody I spoke to in the run up to the Referendum – as I had for many years before that on some of the core issues that came to the fore.
Particularly on free movement.
As a Londoner who loves its polyglot diversity and all the cultural and economic benefits that accrue from it, I was all for it.
But I understand very clearly that not everybody feels the same way.
Some are flat out racists, and always will be.
But some are people who I can accept as wanting to preserve and be surrounded by a cultural identity they feel they belong to – John Major’s rosy vision of pasty-hued men playing cricket on the village green while their wives discuss kitchen extensions in the pavilion.
As I tried to explain to one of my innumerable London friends who cannot understand why not everyone wants to live surrounded by change and difference and colour, some people just find a universally frightening life more comfortable when they live near a pub where everyone they knew grew up with Fawlty Towers and The Spice Girls.
Are these people racist? I don’t think that’s the right word for it.
They have a cultural preference, just like me and my friends in London. I believe most of them would be happy enough in a workplace with (a minority of) colleagues from other cultures or races, although a good chunk probably wouldn’t ideally want their daughters to marry outside their ethnic roots. But even then, I think most are good enough people who would come to appreciate their new sons or daughters-in-law, given time to get to know them.
Rate of change is everything, always. Increase the UK population by three million in a decade and you’re going to have problems. I argued this again and again and we’ve just seen the results.
The same increase over 20 years? Not so much.
Then there are the security concerns. It is a tragedy – if not a coincidence, given that similar ideologues are involved in the backstory – that the refugee crisis on Europe’s borders has coincided with an existential battle against a new terrorist threat.
I don’t pretend to know exactly how Europe should have responded to the prospect of many millions of refugees arriving at the very same time when a large chunk of the population has rarely been so fearful of difference, but it’s abundantly clear – if only from all the subsequent backtracking, even by the Germans – that their first response was wrong.
Sometimes the perfect is the enemy of the good.
They’re not like us
UK politicians, European Union architects, and all the chattering classes should have been more pragmatic about the free movement of people long ago.
Clearly it’s core to the long-term project, but if there had been an honest appraisal of the fears it would provoke, then it might have been structured more sensitively.
Perhaps there should have been greater restrictions on the poorer Eastern European countries that joined the EU, or longer-lasting restrictions. Maybe there should have been a transitional process for new entrants that lasted 20 years or more, during which time Europe intervened to bring them up to speed. Clearly what curbs there were have not been enough to dampen the rate of change here.
I don’t know the solution, obviously. I don’t think anyone has good answers yet. But pretending it wasn’t a problem was never a solution.
Please understand that – as I’m forced to explain to friends who I have spent a decade warning about this bubbling resentment that was there to see for anyone who looked at it plainly – I myself am happy with the free movement rules of EU citizens as things stand, and even the consequent escalation of the UK population.
I can see the cultural benefits, the economic benefits, and the wider benefits for Europe of EU citizens going wherever they like.
And to return to a point raised in the previous section – I’ve fallen for women of all backgrounds over the years. (Sadly it hasn’t always been reciprocated!)
But I am not everybody. And you have to compromise.
There’s no point in me doing an amateurish rehash of all the arguments about this – you’ve heard it for weeks from better sources, and you can read more in the links below.
The bottom line is if you detoxify the perceived threat of immigration then you drain Leave of its pulling power.
Telling everybody that only racists fear migration isn’t detoxification.
The poor reason to vote Brexit
One reason it has been so hard to argue for free movement – and for the EU project in general – is because it is fundamentally a capitalist project.
Remove borders, remove tariffs, allow capital and labour and goods to move freely, and eventually most people across the Eurozone will be lifted up by the resultant greater prosperity.
You’re scoffing?
Exactly. Belief in capitalism has rarely been at a lower ebb.
You almost can’t blame the provinces for voting Leave, given that a chunk of them have seen their economic circumstances slide for generations.
And as an ardent believer in the good wrought by market systems, I’ve been warning for years that as a matter of self-preservation capitalists should be addressing income inequality as a top priority.
That really hasn’t happened, and Brexit is the first sign that there will be consequences for all of us, rich and poor.
I also blame my often lamented (if much-loved) left-wing friends and their Facebook posturing.
For years they’ve ranted that unemployment would soar to three million (employment is now at a record high) and that the NHS had been all but privatised and ruined (it hasn’t been and won’t be).
Rarely have they let the facts get in the way of their soundbites.
Well, now we see what happens when the other side picks up that particular ball and runs with it.
To Brussels without love
So the poor provincials get some of the blame. The rich elites also for their arrogance and indifference.
And the lefties played a part too, with their years of socially mediated scaremongering, and for telling the British people the country was corrupt and ruined for long enough that much of its population eventually believed it must be true.
Who else?
Obviously the Eurocrats. Jeremy Corbyn (who deserves a massive dollup of blame on a tactical level) famously said he was 70% for Remain. The well-argued gripes about Brussels put me at a similar level of conviction.
I never said Remain was an overwhelmingly slam dunk decision. Just that it was the right one.
To be sure, lots of the complaints about Eurozone bureaucracy are ridiculous. (It takes a massive organization and a big budget to administer to 340 million people in a dozen languages? Go figure.)
But the charges of aloofness and an anti-democratic impulse do ring true to me.
Again, I’m not smart enough to know how to address this, but surely we could have done more than we did.
In any event I don’t think the EU is sufficiently aloof, anti-democratic, and powerful enough to warrant pulling the pin. It has delivered economic gains for Europe as a whole, helped the rich get richer, and targeted money at the poor in places. It’s saved at least as much paperwork as it created.
And I’m happy to say it – it’s made violent conflict between or with Europe far, far less likely for decades. Not solely, but it played a role.
Seriously: How did we go from entering a partnership with the Germans just a couple of decades after they’d fought our relatives, murdered helpless millions and bombed our cities to smithereens to thinking the fact that they insisted fire alarms be fitted in all workplaces or that everyone should get a few paid days off a year1 was the source of whatever ails us?
The wartime generation really was wiser than us – once they’d lived through the evil education of the war.
Whatever the EU’s problems, it didn’t make our problems worse.
And we still had the pound, and our special opt-outs!
We had the best of both worlds and we might well have thrown it away.
Educated fools
The final group of people I blame is what I have called before the Grumpy Old Men brigade.
Well-educated, prosperous, ageing, and feeling themselves to be the owners of Pensieves recalling happier, better-educated, and even more prosperous times, I come across these people regularly in their guise as private investors.
In fact some of you fit right into this bracket.
Sure, we all have some wrong-headed views. However these guys are so pompous even as they’re so often wrong it’s not funny. Peak oil, the value of a manufacturing industry, the impact of women in the workplace, they get most things wrong and now they are on the wrong (albeit winning) side of the Referendum.
They are the supposedly financial savvy people who believe the poppycock money we pay into the European Union is an outrage, because they don’t understand it’s a force multiplier that delivers far greater economic returns.
At least the racists are right about one thing: Being in the EU surely means more foreigners in the UK.
The Grumpy Old Man brigade doesn’t even have that going for them. There is no economic argument for exiting the European Union. None.
Honestly, I almost wish London could enact the newly set-up petition to declare itself a City State just to leave these numbskulls to their dreams of returning ship-building to the Tyne and British-made bombers patrolling high above the channel.
I’d love to see how they got on without London’s smarts, its 21st Century business model, and its tax revenues.
Lies, damn lies, and the Leave campaign
Of course these grumpy men know better than the experts who have almost to a man and woman warned that Britain would be poorer in the event of a Brexit.
I certainly think we will be.
Perhaps not crippled, maybe we’ll even do quite well. But we would have been better off within – that’s been the case for the past 40 years, and it’s been abundantly so for the past 10 years. There was no reason why it wouldn’t have continued.
Britain has been, with Germany, the biggest winner in recent times from the project. London has boomed as hundreds of thousands of smart Europeans flocked to where the recovery was fastest and the prospects of getting a good job or setting up a new business was greatest.
London’s outward looking and increasingly digital economy thrived in a way that the regions should have striven to copy, not attempted to vote out of existence.
Everybody who knew anything said so – but who cares what the experts think?
This is surely the most worrying development, and many have already upgraded Donald Trump’s chances in the US on the same logic.
Politics has always been about exaggeration, and it’s true the Remain camp stretched some truths and forecasts to the limit.
But the Leave case was largely built upon fabrications and lies – not least evidenced by the fact that 24 hours after the win they’re recanting.
Boris Johnson – who was booed by the betrayed Londoners who made his political fortune as he headed off to deliver his victory speech on Friday – has already delivered a bewildering maiden speech, in which he explained immigration is a boon and that it will be business as usual under Brexit.
Let’s hope so, but that’s not what Leave said, nor what many of those who voted for Leave thought, Johnson.
Market madness
H.L. Mencken famously quipped, “No one ever went broke underestimating the intelligence of the American public.”
But many smart investors just lost a fortune by over-estimating the British people.
As skilled political animals, the likes of Johnson and Michael Gove have adroitly channeled the self-destructive mood of a huge swathe of the population to propel themselves within sight of the leadership role of a now-divided nation.
But for their part, global markets couldn’t believe we Brits would so dumbly vote against our own self-interest.
The resultant dislocations in the market on Friday morning were truly breathtaking.
Long-term readers will be aware of my active trading style that sits completely at odds with what this site in general and my co-blogger in particular strongly suggests you do. (In short, you should probably be a passive investor in index funds).
And the Referendum has been the most confounding event I’ve faced as an active investor.
I felt confident enough through the various Greek issues, the US fiscal cliff, the tumult earlier this year. Even the financial crisis felt logical, if sometimes terrifying.
But trying to figure out the best collection of assets to own in advance of and through the referendum was a mind-bender, and I changed my exposure many times.
While I tried to stay fairly balanced throughout, for weeks I was tilted more towards a Brexit. I sold out of much of my UK exposure, and at one point I had a pretty large wodge of gold.
A savvy friend in the finance industry didn’t see the need for this caution – like most in the City he thought the chances of Brexit were very low. Perhaps 8-10%, he estimated.
I was nothing like so confident, as I emailed back: “The danger is this is the mother of all protest votes.”
But with the horrible and pointless murder of MP Jo Cox, you could feel the market turn. (My first thought before I saw the news but felt the impact in prices was that Johnson had resigned from Leave, perhaps in disgust at Farage’s misleading migrant poster.)
As this shift continued, my current style meant I sought to reflect it in my positioning, and I sold the gold and upped exposure to some small cap UK cyclicals.
However I just couldn’t bring myself to the same sanguine position that everyone else evidently felt. And so my portfolio shed value daily as the anti-Brexit positions I held (mainly US stocks) wilted in sterling terms and the pound climbed.
All that changed on Friday night, as reality homed in. Before the markets opened, my portfolio notionally soared as the pound tanked. Stocks hadn’t yet had the chance to respond.
They got their chance at 8am.
My plan was basically to dump the less obvious positions I owned in UK exposed companies inside tax-sheltered ISAs and SIPPs, hopefully while the major funds and algorithms were concentrating on offloading the big blatant stuff like UK banks and major housebuilders.
I’d then reverse direction, buying certain blue chips they were throwing overboard in the panic, and hopefully the net result would be I’d get through the day fairly unscathed.
(Again, don’t try this at home!)
It half worked. I was able to get rid of a few UK positions, some in decent size, but for many I couldn’t get any sort of live quote.
I wasn’t prepared to buy “At Best” in a market in freefall, so my attempt to raise liquidity before the price rout took its full toll was only part-completed.
More surprising though was that I couldn’t even get a firm quote for the big companies I wanted to buy.
I was looking at huge banks down more than 30% and certain construction firms down over 75% in the early minutes of trade, and I just couldn’t buy them, at least not with any firm price guide.
The brokers at least stayed up-and-running – in the financial crisis you couldn’t log in at the worst times.
But they blundered, too, for example routing one of my orders into purgatory where it was neither executed nor could it be cancelled. (My fellow blogger Ermine saw his portfolio disappear for a while!)
By the time the US market opened, sanity had returned to UK trading – and then we were off on another rollercoaster.
At the end of the day, I’d achieved my aim; I’d lost less than 1% on what had become an all-equity portfolio.2
Sure, as Lars Kroijer noted to me later, it would have been far easier to hold a few index funds for a similar result, since most of the returns were down to currency swings. Home currencies often tank at the same time as home markets, he reminded me, which means overseas holdings in a diversified portfolio will see coincident gains. Another notch for his belief you should just own a global tracker.
From my point of view though, Friday was about survival in the chaos. I’ve done better by stock picking and trading over the long-term, and I hope to do so in the future.
I didn’t see the Brexit as a profit opportunity, but rather I had to negotiate a chasm of potential downside.
Young, less free, and singularly shafted
You’ll see more in the articles below about how the prospect of Brexit caused chaos in the global markets.
Glib comments to the effect that you shouldn’t care because your US shares went up 10% may well prove to be wide of the mark.
Uncertainty has massively increased, and Europe faces an existential threat.
Global growth will be without doubt slower than it might have been – simply because there is no mechanism by which this vote and this shock can increase it, though we can argue about the scale of the decline.
Yes, life will go on. The UK pound might even eventually rise as a haven, if the Euro goes to hell in a basket and even a stodgy, self-strangling UK economy looks like a better bet in comparison.
I have no doubt though that Britain is going to be poorer as a result of this vote. The extent to which whoever gains power in the aftermath implements the professed wishes of Leavers will determine exactly how much poorer.
It’s easy enough to paint apocalyptic scenarios – a run on the pound, soaring interest rates as we lose our triple-A status and foreigners refuse to finance our deficit. Maybe some localized violence.
However the truth will likely be more mundane, economically-speaking.
London will come off the boil, much global capital will head elsewhere. A few Northern exporters irrelevant in the grand scheme of things will sell a few more widgets to China and India. If immigration is massively curbed, then there’ll be fewer jobs but hourly wages for the crappest jobs might rise by a few pennies. But most things will be more expensive because labour costs will increase and for as long as the pound is weak we’ll import inflation. The poorer regions who voted for Brexit will see less money as tax revenues dwindle and growth slows.
Something like that.
But while I feel somewhat sorry for these poor and marginalized communities – and as I say I was concerned about them long before this vote – I save my greatest sympathy for the urban young.
The aging provincials voted in their imminent decline. The clever young overwhelmingly voted the other way.
As an FT comment that went viral on Twitter pointed out on Friday, young Britons may be about to lose their generation’s single biggest advantage.
They can’t see how they will ever afford a home of their own, job security and pensions are long gone, and they are crippled by student debts.
But free movement in Europe gave them the incredible opportunity to live elsewhere and to enjoy an entirely different life if they chose to.
That freedom, that potential – and all the living that would have gone with it – may just have been voted into oblivion, by old people.
In the worst versions of what happens next, the drawbridge goes up, those freedoms are lost entirely, and they’ll be stuck in the UK even as their bright young European peers drift home and their foolish parents who voted for Brexit wonder why it takes so long now to be served a coffee in Costa.
At its pre-Brexit best, Britain was a large cap version of thriving Estonia.
At worst, it’s now on the path to becoming a less socially ordered version of Japan.
Some Brexiteers are all for this, incidentally. On Friday I re-tweeted a comment by The Reformed Broker that sardonically congratulated the Brexiteers – they’d still have the immigrants, but now they’d have a whole lot less money, too.
One reply: “Good. To kill a tape worm you starve it out.”
Get poor and the immigrants go home. Genius.
Down with the revolution
I feel I haven’t said half of what I was going to say, but I doubt many people even read this far and I don’t blame you.
I avoided Brexit articles in the run-up to the vote, which I now slightly regret. It seemed a kindness to readers, but perhaps it might have swayed a few Leavers not to be so silly.
I know plenty of Monevator readers will agree with my sentiments – because about a quarter of this site’s readership hails from London.
We know London has its problems. Some persevere with it just for the salary. But others of us love the place as much as it has confounded and frustrated us, and know that this vote against the EU is as much a vote against our home.
They – and certainly many other Remainers around the country – will agree with a friend of mine on Facebook who wrote this morning:
Nigel Farage described the result of the referendum as a “victory for ordinary people, a victory for decent people”.
So I am now proud to be extraordinary and indecent.
Anyone with a passing knowledge of history should shiver when politicians with ugly views start championing the cause of the common man. True lasting progress nearly always happens slowly – populism virtually always end badly.
From the demise of the Roman republic to the rise of communism in Russia, even when (as so often) the populace had every right to be angry, they typically cut their nose off to spite their faces and uprisings made things worse.
Some of you disagree. Some of you – mainly grumpy, mainly old – voted for Brexit.
That was your right, just as it’s your right to be angry (and wrong) about what I’ve written today.
I hope soon enough we can talk about expense ratios and using your new ISA allowance. I don’t think you’re bad people.
But don’t look forward to a vibrant debate about the pros and cons of the Referendum to follow this article.
And I wouldn’t bother explaining your vote to Leave.
I am likely to delete all but the very most thoughtful pro-Brexit contributions. My site will not be another platform for the wail of stupidity that has led to this result.
I doubt any of my old school bullies or their like read this website. But do I know some Blimpish investors do.
Well, Monevator is not a democracy.
You had your vote. You can take your views elsewhere.
Brexit articles: Quarantine box
- England just screwed us all – Felix Salmon
- After the vote, chaos – The Economist
- Brexit will reconfigure the UK economy [Search result] – FT
- Boris Johnson’s Pyrrhic victory – Guardian
- Evan Davis loses it with one Brexit liar – Huffington Post
- Petitions: For London to declare independence; for a 2nd referendum
- The sky has not fallen, but we face years of hard labour – Telegraph
- Owen Jones: The escalating culture wars have to stop – Guardian
- Brexit is a wake up call: Save Europe – Guardian
- Britain is not a rainy, fascist island – Guardian
- World’s richest people lose $127 billion in Brexit chaos – Bloomberg
- The golden generation leaves a tarnished legacy [Search result] – FT
- London just threw its race with New York – Bloomberg
- So it’s Brexit. What next for shares? – The Motley Fool
- Bag a bargain post-Brexit investment trust – Citywire
- Star fund managers on Brexit’s impact on shares – ThisIsMoney
- EU exit expected to end UK house price boom [Search result] – FT
- More: What does Brexit mean for UK house prices? – Guardian
- Why Brexit is so bad for the global economy – The Atlantic
- Europe makes Brexit-voting UK a safe haven [Search result] – FT
- Revenge would be the wrong E.U. response to Brexit – Bloomberg
- My secret plan for surviving after Brexit – UK Value Investor
- Voted Brexit? How to forgive yourself – Aeon
Have a good weekend.
From the blogs
Making good use of the things that we find…
Passive investing
- Portfolio turnover: How high is too high? – Oblivious Investor
- Introducing… Index Funds: The Movie – The Evidence-based Investor
- Questioning the wall – Tom Brakke
Active investing
- How not to blow yourself up trading – Adam Grimes
- Warren Buffett went out on top – The Irrelevant Investor
- The new normal: Living with negative interest rates – Investing Caffeine
- Q&A with Tobias Carlisle about concentrated investing – Abnormal Returns
- There are better ways to earn 7% then Argentinian Government Debt – T.V.P.
Other articles
- Excellent deep dive into last week’s cash vs shares debate – Finalytiq
- How I’ll be invested in retirement – Retirement Investing Today
- The secrets to changing your habits – The Escape Artist
- Some thoughts on investing $1,000 [US but features me!] – Wallet Hacks
Products of the week: The Guardian rounds up a collection of financial services that come with freebies. Why not get a free iPad with your mortgage, or a free eye test with your insurance? Well, perhaps because such deals will rarely be the best all-rounders. These companies are targeting an old part of your brain – the primitive beast within you that seeks a short-term pleasure hit. Better to get back out into the field to till the earth and mull over what’s cheapest in the long-term.
Mainstream media money
Some links are Google search results – in PC/desktop view these enable you to click through to read the piece without being a paid subscriber of that site.3
Passive investing
- Mispricing underlies profitability premium – ETF.com
Active investing
- Do experts know anything? – Bloomberg
- High household equity in the US is bearish for the S&P – MarketWatch
A word from a broker
- The investment outlook following the Brexit win – TD Direct
- Winners and losers from the EU Referendum – Hargreaves Lansdown
Other stuff worth reading
- Top 10 destinations for Britons looking to work abroad – ThisIsMoney
- Interest-only mortgages are back, for some – Guardian
- The Forrest Gump of the Internet – The Atlantic
Book of the week: Fancy some topical reading in the aftermath of the Brexit vote? Why not pick up a copy of Edward Gibbon’s The History of the Decline and Fall of the Roman Empire. O Fortuna!
Like these links? Subscribe to get them every week!
- Or whatever, I can’t be bothered right now to look up the “red tape” that has supposedly crippled our growing economy. [↩]
- I have a massive slug of cash and cash equivalents, but they sit outside my trading accounts and tracking, as they’re earmarked for a house purchase someday. [↩]
- Note some articles can only be accessed through the search results if you’re using PC/desktop view (from mobile/tablet view they bring up the firewall/subscription page). To circumvent, switch your mobile browser to use the desktop view. On Chrome for Android: press the menu button followed by “Request Desktop Site”. [↩]
Comments on this entry are closed.
This is the most comprehensive (yes, I read all the way to the end!) opinion / reaction / analysis of Brexit I’ve read thus far. And I see not so surprising parallels between how you’re parsing the eventual success of Brexit to our own situation here in the US and the rise of, I find myself tempted to say “You-Know-Who”, the bombastic perpetual lying machine that is the Republican nominee. I hold both sides accountable as well, and though many UK friends have pointed out that we should only expect 8 years of suffering, others of them have pointed out that people like him tend to change the laws to suit themselves and who’s to stop them? They bluster or charm or other eeled their way to power in the first place and no one stopped that.
In any case, returning to the topic at hand, I don’t know what we can expect in the days to come after the Leave vote. Just as navigating it in your portfolio was turbulent and unpredictable, we’re facing quite a strange journey ahead, I expect. I wish you and all of the UK, particularly the poor who always get hit the hardest by such things, all the very best.
Lovely poetic article TI !
Am going to raise one question.
Could circumstances conspire to halt the Brexit?
Just a thought.
Thanks for these wise words; they are consoling on a miserable weekend.
I enjoyed your article and most certainly voted Remain, even if I am a Grumpy Old Man. But London was not the only area to vote remain. I’m from Manchester, and I’m proud that we also voted in favour of the current century. I was just in shock yesterday, but today was cheered up by my colleagues at work who were trying to think up ever more preposterous ways to show that they are really, in their hearts, actually Scottish. In my case, my mother’s maiden name was “Scott”, but I fear it only means that my family (from Jamaica originally) was at one point *owned* by someone named “Scott”. Still, it might be worth a try!
I feel I should preface this comment with a) I normally really like your blog, and b) I voted remain. But I have to say this post comes across as yet another London-centric whinge of the kind I’ve had to put up with on my Facebook feed the last 24 hours. I think we’ll be fine – but then what do I know? I’m just an irrelevant provincial manufacturing worker. 🙂
The most pertinent thing you wrote in the entire article was that you should have made your views on Brexit clear before the referendum
The margin of victory was only a million votes in a country of 65 million
Thanks for your words. It was cathartic. I am slowly recovering from what feels like a car crash. I live in Wales and I can’t believe that so many people think leaving the EU is the answer to their problems. Oh well.
A good read, TI.
> Belief in capitalism has rarely been at a lower ebb.
There was a telling chart of opinions from one of the polls published recently. Capitalism was the one thing both sides agreed on, or rather were equally split on. The magnitude of feeling on some of the other issues is stark, though may just have reflect what was a very divisive campaign.
https://pbs.twimg.com/media/CltVc6WWMAER8qd.jpg
> You almost can’t blame the provinces for voting Leave, given that a chunk of them have seen their economic circumstances slide for generations.
Several people have said it was an anti-austerity vote, not about immigration. But the provinces who voted to leave are the same ones that returned the Conservatives to power last year with an even larger mandate. It doesn’t wash.
Will Scotland leave? It would be interesting if they siphoned off some of the talent from London. Smaller cities in the US have benefited from knowledge workers fleeing Silicon Valley lately.
At the outset, let me say that I voted In and that I am as gutted as the next Bremain voter.
With that out of the way and assuming that Brexit is not somehow reversed, we are where we are. No amount of moping or anger is likely to change that.
My thesis is that within just about every ostensibly negative situation, there also lurks an upside if you’re prepared to cast sadness and anger aside and search creatively for it. Indeed, speaking as a psychologist, the chances of creatively discovering an upside are significantly reduced if your affect (mood) and attitude are negative – because negativity shuts down creativity.
A lot of people – including me – look to Monevator for creative solutions to our investment conundrums and you seldom let us down. Therefore, as dispassionately and as soon as possible please, try to view this as yet another investment challenge; a magnificently challenging and complex investment problem, but an investment problem nonetheless.
I look forward to your continued positive and creative thoughts, and thanks again for your excellent writing.
Max
I am another grumpy old Bremainer. But I am deeply uncomfortable with classing many Brexiters as dim. Many are poor and perhaps low-skilled, they have been having a crappy time with precarious dead end jobs, and free movement of people is a hard sell to the poor of wealthy countries when there is such a disparity of living standards across the EU. There used to be some respect decades ago in being a cleaner – the pay was crap but you were on the staff. When agencies and outsourcing came along people doing that sort of job took the shaft, and zero-hours contracts were where it ended up.
And then in the 200os we decided to give free movement of people to people poorer than our poor. With vim and enterprise they got on with the job, because poor in London was well off for them, something to do for a few years. So we threw the existing poor under the bus. You idea of a long transition period was probably the way to go, but it didn’t happen that way.
There are two constituencies to Brexiters as I see – the ones who did it for sovereignty and high-falutin’ ideas like that. They can accept the challenges to come, and perhaps consider it a price worth paying, fair enough. I don’t agree with their reasons, but that’s democracy for you.
But the poor who became poorer as a result of free movement of poor people in the EU weren’t unreasonable, they were desperate. Sometimes if you have nothing then perhaps you feel you have nothing to lose. The people that screwed up here IMO are the wealthy who didn’t bring in an universal income of something like that to protect the poor before they brought in free movement.
It makes me uncomfortable when Remainers sneer at this part of the Brexiters. We have enough money, and many of us have never been that poor. I was poor as a student, enough to do without food at times and rent crappy digs, but I had hope. I don’t know what it’s like to live poor and without hope. I just don’t move is these circles. But they are human beings too, they are our fellow countrymen, and there seem to be a lot more of them than I had been aware of. The referendum was a numbers game, and I suspect a lot of the numbers were made from desperation, not principle. I agree with the general thrust of your prognosis, which is largely why I voted Leave. But it’ll be a shame if the divisions robbed us of remaining compassion.
Damn. I meant voted Remain 😉
Thank you, interesting piece on lots of different levels.
Sticking to the investing aspect, your trading strategy sounds very…errrr…brave(!). For any UK investor (measuring their portfolio performance in £) with a sensible low cost and properly internationally diversified portfolio, last week should just have been another week of solid portfolio gains.
Great rant. Couldn’t agree more. I remain very angry.
This was a poke in the eye to London and the South. What those in the rest of England do not appreciate is how utterly dependent they were on both London and the EU to pay for them. They will find out soon enough.
Anyway, those who had a diversified global equity/bond/cash portfolio would have seen little “action” yesterday. Ignoring FX I was pleasantly surprised to find my portfolio had notched down just over 1%. So what for chaos in the markets…
There seems to be some regret in the air, which is good, although pointless.
I personally don’t know anyone who voted out, everyone around me voted in. It’s going to be an uncomfortable ride.
@Matt
I would suggest respectfully provincial manufacturing workers are one of the sets of workers likely to be most effected by the UK losing privileged access to all of its largest export markets
https://fullfact.org/europe/uk-eu-trade/
Depends which industry and where their markets are. Mine (aerospace) sends most of its products outside the EU – so as long as the Chinese, Arabs and Americans keep buying, we’ll be fine. Same goes for the likes of JCB, Dyson and JLR.
@ermine — Yes, you’re right, not all Leavers are stupid of course, and some may even be fully prepared for the likely consequences of what I see as a stupid decision.
In particular, maximum sovereignty does come from a Brexit — provided they don’t just accept EU laws by the back door anyway as a consequence of the trade deal (how ironic).
Some of the Tories fit into this bracket. Perhaps Rees Mogg for example.
However I don’t for one moment think they got 52% of the vote on the sovereignty concerns of informed individuals.
They got 52% of the vote from an unholy alliance.
Excellent article thanks. I did wonder how people attempting to trade on the Friday fared… I’d been accumulating cash over the last few months with a vague idea of buying referendum dips… but a couple of weeks ago decided I’d be happier with it in USD than GBP and swept the lot into a US bond ETF. Didn’t have the guts to rotate any funds back into UK assets on Friday when it came to it, and it sounds like trying would have driven me bananas. I was surprised to find myself a few percent up in GBP terms when I eventually dared to check at close of play (portfolio is perhaps more “global with a tilt to UK” than “UK with global exposure”), but of course it’s an illusion when the pound itself has been mauled by more, and it’s still far too early to conclude anything, and all those other worries about China and President Trump and Greece are still out there…
I’ve just finished my first year of university and well…crap. I’ve no idea what my prospects are like when I graduate now.
Michael Gove stated that we “have had enough of experts”, but since when do we substitute the knowledge of others for blind optimism? More often than I can count, when we see warnings of the impact of leaving the EU, we get dismissive replies of “they were wrong about the euro”, a fallacy that attacks the messenger rather than the process in which the message was formulated. I’d be less despondent with the result were it not for the sheer thoughtlessness in which some have arrived at the decision to exit.
And now today, we see the defensive backtracking starting already. We have Farage denying that he said the EU contributions can now be given to the NHS. Hannan denying that the immigration argument was about minimising the numbers, just “more control”. Boris in no hurry to trigger Article 50, despite it previously being of utmost importance that we leave the EU as soon as possible. These nit-picky defences might be technically correct, but it doesn’t excuse the fact that many were misled by these claims which they were in no hurry to correct until after such an important decision was made. Such a willingness to deceive turns my despondence into anger.
Still, whilst I agree with much of your post, I think it’s wrong to blame the old for screwing us when in reality, at least some of it is our own doing. Our generation simply doesn’t engage with decisions like this. Sky Data suggests that the turnout of 18-24 year olds was 36%. That of 25-34 year olds? 58% (for comparison, it’s estimated that 83% of eligible voters aged 65+ voted). Quite simply, whilst we can complain over how the old have voted, we failed to get our own to go out to vote and have as much to blame for allowing this to happen.
@Matt
All of the UKs current trading treaties with the rest of the world are via passported EU agreements
These will lapse when the UK leaves the EU and new agreements will need to negotiated
Good luck 🙂
To my mind, in England, there were three campaigns
Give/ Johnson
Farage
Cameron
I voted ‘leave’ and I did so along the GoveGove/Johnson lines. I’m not averse to being part of a huge trading Union , or to the free movement of people within that Union in principal – I was opposed to the one we had.
I don’t think immigration will necessarily fall – at least not where I live in London, and Gove has said he doesn’t expect it to… However I didn’t vote on immigration
I think my rights are better protected by parliament here. The EU is widely regarded as being extremely positive for worker rights…but how it’s assumed it’s position in the liberal mind as a Bastian of civil rights I just don’t know. There are 11 EU member states where gays cant get married and three where they can’t join the army… I didn’t feel safe with the highest laws being made in an organisation that would allow me to the treated second class if I lived in another part of it. I feel safer now, my right to a family life protected by a democratically elected Parliament here.
Also, it is too glib to say the bureaucracy is necessary – there is nothing capitalist about CAP spending for eg. I hope we will go on to be richer as well more Democratic and liberal.
There were 4m Ukip votes and 17m leave votes…your characterisation of all leave voters being illeberal is incorrect
Yesterday travelling into work.. I one thought repeat itself over and over again, i didn’t feel like being in Britain. Yesterday was a sad day, genuinely sad…. Once I arrived at work, I got the sense that everyone else felt that way……
Long time lurker, first time poster. Great article, your point articulated brilliantly.
Yesterday, I jokingly spoke to my work colleagues about how I was going through the seven stages of grief about the result.
However, the actual reason was that I neglected to place my bet on Leave at 10/1, even though I personally voted for Remain.
This wasn’t due to Mencken-style sentiment regarding the demos either. Pure speculation was my reason, due to uncertainty.
And this is my point: we haven’t actually Brexited yet, much as Greece didn’t Grexit.
Lots of people seem to be talking as if Article 50 has been invoked, but it hasn’t. Yet.
In my opinion, the events in the markets early on Friday were down to expectations stoked by the Prime Minister’s statements from a few months ago about Brexit being enacted immediately. Once he’d given his resignation address, but pushed actual Brexit further down the line, everything bounced back.
I’m reading Taleb’s “Antifragile” and this quote seems prescient:
“War could cause a rise in oil prices, but not scheduled war—since prices adjust to expectations.”
Hence, on Friday, I decided to sit tight and see what happened (mostly passive investments that nary fluctuated, a few active investments but only one that was still down by the end of trading) and not waste the fees.
Therefore, I think Friday was a precursor, a mere blip, a tiny indicator of what could happen when Article 50 is invoked.
I feel almost “Dr Doom”-esque typing this now!
Amongst the gloom it is reassuring to see so much sense spoken here. The result was a shocking act of national self-harm, chiefly by the old and the ignorant whipped up by demagogues, and the consequences will resonate for decades. Particularly upsetting that younger people and children will be permanently impoverished and lose the same rights to work, study and travel across a continent that we enjoyed. But we are reaping the results not just of 4 months of a brutally mendacious campaign, but also decades of lies, bigotry and misinformation peddled by the tabloid media (especially Daily Mail, Express, Sun etc) and which politicians of all stripes failed to challenge sufficiently.
Like Tim I moved heavily into USD denominated bonds a couple of weeks ago when things were beginning to look very unpredictable – and was not wholly convinced by the complacency of the markets this past week. I suspect the uncertainty will persist for some time, which favours risk-off assets, so in no hurry just yet to rotate back into the market.
17 million people cannot be written off as being uneducated, economically clueless or racist. This is just the road to bad faith. People will do it anyway for the political capital. Which is a shame because it epitomizes the idea there are no bad tactics, only bad targets…
Like those who voted the Conservatives in, many people are now afraid of talking because of the abuse they get.
It is okay to feel right but always leave room for being wrong and the world for not living to your expectation, such as this result for example.
I agree with ermine. Free movement of labour at the lower end of the market must be a very brutal place. I am very grateful I don’t reside there. It’s a very unpragmatic EU ideal.
One possible course of events could be contagion exits. Possibly the only way we come out of this looking smart with the benefit of hindsight, ie we were the 1st to jump ship.
I would have loved to hear more about the systemic problems in the EU in the lead up debate but heard nothing. It may be the case it’s doomed anyway and will disintegrate in due course.
I don’t buy the lack of opportunity for the kids angle. The sort of UK kids who get cool jobs overseas will undoubtedly still get cool jobs overseas. It’s the opposite end of the labour market
@rhino @ermine — Except that didn’t happen. Report after report showed no impact on lower paid jobs or pay, not least because immigration boosts demand and GDP and increases the need for work and workers.
From memory one study, I think by the BOE, showed a tiny blip down in pay from free movement. That’s it.
Some might say it’s a price worth paying for higher economic growth and lower prices for all (not least for the higher tax revenues). I’d also suggest if the Brexit camp was really so motivated to improve the lot of the poor worker from this probably non existent threat (according to, you know, experts) then there were more targeted ways to do it than the ruinous upheaval of Brexit.
I’m the last to deny its tough at that end of the workforce. That wasn’t the vote.
Basically IMHO it’s another of the many Brexiteer myths that appeal because they sound right.
If you did vote remain, please ensure you sign the petition for a 2nd vote and encourage others to do the same,.
Grand
Yes I m only arm chair analysing here. I ve put no effort in. Maybe it’s 8 years of austerity then. Either way. Giving a vote on an issue that you could argue is too complex for anyone to understand to a load of people who are monumentally pissed off is a disaster
Like most people here, I voted Remain. Like The Investor I’m the spawn of proletarian stock, albeit born in an outer London suburb widely stereotyped as as chavland, rather than some post-industrial Northern town. But like him, I’m devastated by the result.
Where we differ, perhaps because I don’t live in London but still reside within 20 miles of where I grew up – albeit now in a leafy, Conservative-voting enclave a little further out – is that I’m with Ermine in not blaming the working class, or even the golf-playing Shire-dwelling Tories, for yesterday’s result.
Whatever the aggregated data may indicate, I believe that large-scale immigration has had a significant negative effect on employment levels, pay rates, working conditions and job security for the British working class. I fully understand why people like my sister and her partner, who would be classed as long-term benefit dependants, voted Brexit. I don’t believe they’re racist, any more than I’d label those who seek to apply that label snobs. The problem is about misunderstanding, born of the geographical and social segregation that has characterised the UK in recent years.
In central London, there is sufficient demand for labour, and a lack of housing offers adequate constraint on supply, to ensure that immigration has not materially worsened the lot of the settled working class. Not that many remain, since most have moved out to the ‘burbs, if not further. Same goes for the smart university cities that also voted Remain.
In the depressing, low-income city peripheries, the market towns and the post-industrial cities, supply of migrants exceeds demand for labour.
As investors, we all understand statistical concepts such as a normal distribution, colloquially known as a bell curve. I believe it’s uncontroversial to suggest that it applies to the availability of talent in the labour force.
Put bluntly, most of the East Europeans that have come to the UK, and many from elsewhere who’ve arrived as asylum seekers, students or ‘entrepreneurs’ (a popular wheeze in the Blair era) are from the middle of the distribution and above. Meanwhile – and I say this as someone born into the demographic in question, but who had a couple of lucky breaks – I’d submit that many of those on long-term benefits in the UK are from the lower end of that range.
Put bluntly, employers would rather hire a smart, motivated, probably university-educated, likely young Pole than a morbidly obese, poorly educated, long-term unemployed possibly weed-demotivated, tattooed, British chav. Which explains why most of the new jobs created in the UK in recent years have gone to immigrants.
Turn off the EU supply and employers have to hire the settled population, even if that forces them to provide training and supervision and accept lower performance than Piotr or Agnieszka might have needed.
More, too, would be asked of the British proletariat in this scenario. Back in the 1980s, builders and others from the North were bussed down to London and the South East on Sunday nights to service the property boom; they stayed in dire B&Bs and returned on Friday nights. Look at the warehouse conversions and new builds that flourished in Docklands in the 1980s; you’re admiring the work of Scousers and Geordies, far from home. Today, Poles, Lithuanians and Romanians are the muscle behind London’s construction boom.
It has been pointed out that the areas that voted for Brexit are those that receive the most financial support from the EU [probably also from the UK taxpayer]. Some commentators have hinted sniffily that this is to be expected; after all, they’re thick, aren’t they, is the unspoken implication.
An alternative, more respectful hypothesis might be that they resent having to live on hand-outs, and believe that exiting the EU – even if, or perhaps because, it could weaken the City and the job opportunities of the affluent – might give them a fighting chance of standing on their own two feet.
And what of the blazer-wearing, golf-playing provincial Tories? Racists who hanker after a return to the 1950s? Perhaps. But remember they hail from an era when very few people, mostly those born into privilege, went to university, and when social mobility was far more widespread, largely due to an unprecedented post-War expansion of the middle class, but also to some extent thanks to the grammar schools, which provided a ladder for a lucky few sons and daughters of toil to climb. They may have greater understanding of and empathy toward the settled working class than many younger people of equivalent affluence, most of them the result of assortative mating and hence less likely to understand the precariat than their grandparents.
While I remain of the view that remaining in the EU, perhaps with more assertive renegotiation of membership terms, would have been the better outcome for most Britons, I think it’s important to respect and try to understand the reasons why those who voted leave did so. While a few pointy-heads were driven by sovereignty concerns, I think the large turn-out by the white working class is a signal not of racism or stupidity but of wholly legitimate economic concerns that politicians would do well to understand and act upon.
@mark good comment, food for thought in there. I too feel like I d like to resist the ‘they re all just stupid line’. It’s got to be more interesting than that.
@Mark – I agree. However I don’t subscribe to the theory that you have to look for work in the area you grew up and that’s where I agree with TI that immigration is good for jobs (not wages) at all parts of the spectrum. The woman who is paid next to nothing for ironing my shirts presumably spends the money on shopping / getting her hair cut etc… If she hadn’t come over and the price went up I’d iron them myself and her hairdresser would miss out…and etc…
Fully agree, the stupid racist name calling is not helpful. These people have a point of view. It may differ to others, but it doesn’t make it less valid. The issue for me here is the re-negotiations with the EU didn’t address these concerns properly. A decent deal with the EU and I think the vote would have been very different. I blame the government and the EU for not listening and acting and reaching the right deal, not the people who voted leave!
Will it be a disaster? Who knows. I think the Germans are already wising up to the impact it will have on their own economy. This could set Europe crashing down. So I think in the end they will negotiate reasonably. But who knows.
@PA ah, but does it remove jobs from ‘local people’ because their cost of living expectations are higher than your cleaning lady? She will probably share a bed sit, send the money home and eventually leave to her much cheaper homeland. The local lady expects to buy a UK house and live a decent working class UK lifestyle. So less immigration means fewer jobs as only more wealthy people will take up the local cleaning lady, but in your case there is in effect no jobs for local cleaning ladies as they can’t afford to live off it in UK…..
I am also grieving for our withdrawal from a project that, no matter how flawed or tortuous, was a great force for good in the world.
Also of working class stock (London originally and now living in Wales), I do understand the anger and fear of many people either in or close to the ‘precariat’. However, most of what I heard them complaining about in the endless vox pops over recent weeks had naff all to do with the EU, but were directly the result of Government policy. A Government that takes the view that being poor or unsuccessful is a moral failing (trust me I have met a number of our current ministers).
What is particularly enraging is that a few rich white males have persuaded the people they have thoroughly screwed over since 2010 to vote for policies that will mean they are most likely to be screwed over again. Leave has promised action that they are unlikely to take and almost certainly lack the capacity to deliver. They are already pulling back on those firm promises.
Like others I have signed the petition for a second referencdum (over 2.4m now), and am imploring my MP to make sure that Parliament and not the leaders of the leave campaign are in charge of negotiations.
Very sad and very angry
Old_eyes
That was beautiful, and covered a lot of ground. Thank you very much for writing it.
Awesome post. You have articulated a lot of what I have been feeling in the past 48 hours. I am still not ready to engage or even speak to some of my extended family that voted for ‘Leave’.
The ‘Leave’ camp through their lies and demagoguery have whipped up fear of immigrants and ‘foreigners’ and have consigned us to years of lost opportunities (aided by an insipid Labour leadership).
As a long-term worker in the pharmaceutical industry I fear the immediate consequences for one of our leading ‘hi-tech’ industries and source of several highly rewarding stocks:
1. The European Medicine Authority, which manages the smooth regulation and management of medicine across the EU will now have to leave London
2. There will also be an EU grant shaped hole in the research budgets for many universities that provide many of the novel ideas and candidates that become world-class medicines developed by some of our FTSE100 stalwart pharma companies
3. Do you think the next more right-wing Tory administration is going to back fill the gaping hole in the UK’s pharma development infrastructure? Of course not! They will pass it on as a tax break and look for entrepreneurs to sort it out.
Because of my career and much more importantly the long-term life chances of my kids I am angling to ‘leave’ and get to Switzerland/US as soon as possible.
To Richard’s point, I’ve noticed a wide spectrum of tones to the pronouncements emerging from the EU and the leaders of its nations since the poll result was announced. Some are playing hardball, others being conciliatory, with many nuances in between.
The problem, I think, is that big businesses in major exporting countries, particularly Germany, want us in the single market and are happy to make concessions on freedom of movement of labour and on sovereignty to achieve it, while politicians – especially those closely involved in the EU – fear that such a deal (which would be unique) might set a precedent that could encourage others to vote to leave and seek the same terms.
Business versus politics: time will tell which triumphs!
Immigration was not the primary reason to vote.
The key was sovereignty of the UK from Brussels.
I think UK should start building EU replacement with some key countries.
I don’t say that Leave voters are stupid, but I have seen a number of television interviews with young men living in deprived areas whose reason for voting Leave was that they wanted “change, because things can’t get any worse”. This does suggest that they hadn’t carried out a sophisticated analysis of the situation. Early in my career I was told that there is no situation so desperate as to be incapable of further deterioration, and in general I found this to be true.
I can understand people in Boston voting Leave because they are uncomfortable with the large number of European migrants in the town. It is less easy to understand people in Cornwall voting Leave when they receive so much EU investment. Moving control of that investment from the EU which definitely provides it to a right-wing Government which might not strikes me as being a bit risky.
If by October BoJo is PM and there is a serious prospect of a second Scottish independence referendum (HM won’t be happy) and disquiet in the country about rising prices and job losses and cuts in services, I wouldn’t put it past him to shrug his shoulders and say “look, the whole thing was clearly a big mistake, let’s just leave things as they are”. He might even get away with it.
Good article.
My take on the referendum result is that there’s been a change of management at the asylum. I do fear this might delay my early retirement by a few years.
A very long and for the most part self centred rant.
The first thing we need explode is before Brexit Europe had no intention of changing. Will it now? Maybe. Tony Benn explained it best. In the UK you have a government it listens to you and if it screws up it gets booted out. He became anti EU as he gradually realised that the intention was to create an edifice that would not be bothered by such a tiresome construct.
I also could go on (and on). But for a moment look at this objectively the EU did not give David Cameron a deal he could sell and that was deliberate given the consequences I’d say heads should roll. In the UK the prime minister himself resigned.
The 5 presidents of the EU upon whose watch this occurred however are still in place and show no signs of accepting any culpability and there is no way to make them.
To be fair they have a lot of other cockups they’d made a porridge of dealing with prior to miscalculating on Britain. The simple and unarguable point is they screw up and we can’t get shot and replace with someone more competent.
If you are worried about blood on the European mainland, how likely is is that an EU in it’s final state, ie an undemocratic empire could not trigger this? History in Europe tells us, I would suggest that such an enity inevitably ends in war (and it does want it’s own army).
If you are interested in how Juncter got appointed read this. I hold him in about the same reguard I hold Machiavelli. He probably cost the EU the UK but he is untouchable, is that healthy?
https://www.theguardian.com/world/2014/jun/27/eu-democratic-bandwagon-juncker-president-wanted
It the EU as dangerous as a 1933 Germany? Who knows? I hope not. What we do know is if Britain has been brave in 1938 there would not have been a second world war. We WERE brave on June the 23rd, well at least some of us anyway.
One of the most sensible things I’ve ever read (and not just on Brexit).
Thank you, that’s a keeper.
Thanks for sharing your thoughts. As an American investor, I truly am IMPRESSED by your people’s willingness to take the short term pain for hopefully long term gain.
I’m not sure many people would be willing to lose 10-50% of their investment values, housing values, job market, etc for the right to be more free from EU rule. So for this, I admire you guys.
May I ask you or any British folks some questions for a follow up article I’m doing? My first Brexit article has a a lot of good commentary so far, with 55% of the 640+ votes saying it was right for you guys to leave.
* Would you agree that freedom to choose your own mistakes is all anybody ever wants, even with financial consequences so dire?
* Do you think one of the reasons why you guys voted out was because you are already very wealthy, that such short term financial consequences don’t mean much? I wonder this particularly for the older generation since they seem like the ones who were more aggressive in voting out versus the younger generations.
* The older generation voting out runs CONTRARY to the “skin in the game argument” e.g. they have more to lose and should have voted more to remain. Why do you think this is?
* What percentage chance there’s ANOTHER referendum w/in 2 years to vote to STAY if things get really bad? It seems like a recession is an inevitability right now.
* How do the British view the US Presidential race? Are they more for Trump (Brexit) or more for the establishment/dynasty (Clinton’s 3rd term)?
Thanks guys!
Best,
Sam
I’m sorry to feel that I yet have to read or hear anyone who voted leave that sounds liberal. It is true that there are countries in the EU that really need to sort out their human rights legislation and probably they should’ve been accepted into the EU after they did so. However it is also true that reform especially in human rights happens quicker when a country is under the influence of the EU. Countries, communities hold on to their old fashioned beliefs/ on what they’re used to/ on what they feel comfortable with, for as long as possible, that is human nature. They might take a long time to get accustomed and understand certain human rights, but it would take a much longer time to do this outside of the EU or if they didn’t have the wish to get in. The UK has its own problems with this, for example the constant battle on abortion in Northern Ireland. At least by being part of the EU these countries show to be an ally in the grand scheme of things and accept that they need reform, instead of standing on the other side and blaming the ‘western world’ for imposing their beliefs on them. In stead of staying in and being part of something that encourages reform on human rights, helps these countries on their way there, you decide to leave it. Yes there is a truth in everything and you could unpick all the faults that there lies within the EU. I’m afraid that if you really start unpicking both sides there’d be enough mess to hate everything that surrounds you and start looking for something completely different, which in the end would also end up being something vastly imperfect simply because you can’t make a perfect thing if it has to involve more people than just you. I also think that there is a positive in everything and there surely are in exiting the EU, but I’m afraid they don’t outweigh the negatives. I think the EU is a unity that has done good largely more than bad. As everything else in life it’s something that needs constant change and improvement.
Can I “hijack” this just briefly…I don’t check my funds very often but they are more or less in the £150 range they usually are…
…should I continue with my strategy of only buying 1/6 of my funds in the UK… I can’t help but feel I’m spending a lot of pounds to get not many dollars/ euros/ yen etc to buy shares with and will get ‘hurt’ when the pound strengthens…
@FS My view is the remain campaign pushed the financial Armageddon argument to far and people started to ignore or even laugh at it. I just shrugged when Osborne made his ‘crisis’ budget statement and I pretty much ignored things like the FTSE chiefs singing the letter just before. And I am someone who is worried about the impact of this on the economy. The leave guys had an advantage here – they could draw on patriotism and say ignore that, we are a great people and country, 5th largest economy, we will be stronger on our own. That has a certain appeal to it, rather than being reliant on others.
Older people probably have less to lose than younger in this case. Many will own their home, have fixed pensions and some savings behind them. I doubt many who voted leave are massively in the stock market (perhaps just the pension managed by someone else) so may be less bothered by this. Young people will have huge morgatages (so negative equity), job issues, pension issues etc. Though interestingly those older people I know who voted leave state they did if for the future of the children….
Are they in favour of Trump, not sure. Trump is a big character and gets lots of press coverage. If it wasn’t Hilary Clinton I wonder how many people would know the ‘establishment’ candidate over here (among your average joes).
It does feel like the world is becoming a lot more protectionist and in my view this is the result of the 2008 financial crisis. Huge cuts, no wage growth for many, children unable to afford homes, the rich getting richer and the poor feeling left behind. Of course whether this is really different to before 2008 or if the commentary after 2008 has just made people feel like things are a lot worse I don’t know (high employment suggests the latter)
@TI
I respectfully disagree, though I agree on the big picture of freedom of movement being a plus for the UK. The Labour Effects of immigration (I presume the University of Oxford is capable of intellectual and analytical balance) makes the general case that immigration is a plus for the receiving economy for all the reasons you observed and a few others, there’s little doubt the UK as a whole is richer for the A8 freedom of movement post 2004.
The devil is in the detail
and
We heard from people on the short end of the stick on Thursday, along with others who did so for political reasons. We could have forestalled the dispossession with a universal income, on generally a less cruel benefits system that didn’t systematically mentally torture the unemployed with sanctions and pettifogging rules. It is true that London makes more and more of a contribution to the economy than it used to. And skill requirements of the economy are rising, it can makes less and less use of unskilled labour, and wants to pay the least for that. Not all of Leave was from the dispossessed, but a lot of it was, the difference in the vote was about a million, I can see that perhaps there are more than that number of dispossessed; it came as a surprise to me that there were so many. I was in an middle class bubble too, perhaps it should have been obvious – food banks, look at some Northern cities where whole streets seem to have been abandoned.
I am not sure sneering at the smarts of this part of the Leave vote reflects well on us Remainers. As a lady who ran a Pay as You Can cafe I interviewed recently said ‘we are all human, we all eat’. The cafe used unsold waste food donated from supermarkets and local suppliers. Her customers looked like normal humans to me, and this is happening in Britain even if it is in the tails of the stats. I don’t think Leave will help them, but I can just about understand the desperation, though I believe it will get worse in the years to come.
@Mark +1
I voted Remain and now I’m grieving for our country. I hope you won’t expunge my words TI when I say that Brexit is a victory for ignorance and myopia. It’s not beyond the realms of possibility, that the “UK” may now eventually only be England and maybe Wales.
I’ve signed the online petition, because although I don’t expect there to be another referendum I do think that it’s hugely important that those of us who feel as I do make our anger as apparent as possible; it may influence our policy makers
How will things pan out in the shorter term? Show me the interest rate, exchange rate, unemployment and inflation numbers in six and twelve months time and I’ll tell you.
Keep calm but you have permission to weep!
Surely once the negotiation team has actually spent the many hours agreeing all of the compromises needed to agree an exit deal we need to have a 2nd referendum. Only at this point will it be clear what the IN and OUT options are. The simplistic leave and take back control message will be popped by the reality of what will be needed to live and trade with our neighbours. Hopefully then it will be clear that IN provides the best option for the UK?
Out of interest, those who are signing the petition to re-run the referendum. If remain had won and leave started a similar petition, how would you view it?
I think the almost 50:50 split already tells policy makers how they should think about proceeding.
Nice article TI thanks.
I’m not sure that the economic case is quite as pessimistic as some here seem to assume. Even assuming some fairly pessimistic possible outcomes the long term effect on GDP is not predicted to be critical. I’m not for one second suggesting this is a desirable or optimal situation, and there will be pain for some, just that it can be dealt with.
To try to give this some perspective, based on my 27 years working in the economics dept of a London bank I would rate this as a lot less significant than 2008 (because apart from Friday’s monetary shock it is not a global event (yet?)), but more significant than say ’92. A serious but not catastrophic event. To really go back in time it is nowhere near as bad as the early/mid 70’s.
So… this means a short-term slow down in UK growth (recession possibly) as the uncertainty puts investment projects on hold and after, when the trade arrangements become clearer business gets to grips with the new normal. In my experience, business and the dynamic, creative entrepreneurial people that run them have an amazing ability to deal with the clusterf*cks that come their way.
The message to my investing self is:
1. do the keep calm and carry on thing.
2. keep in mind what my investment objectives are and relate my actions to those.
3. don’t see the point of dwelling on the whys and wherefores of it all.
For me this event has brought home the importance of global diversification – assets and currency, even a normally sensible country like Britain can do stupid.
Disclosures, I voted remain. My own portfolio is long equities, global, mostly passive.
@TI I am sorry to hear that you are depressed at the Brexit result and even more about how it came about.
The result ultimately is about numbers not about what is right or wrong, so the prevailing view overall wins.
It’s harder to stomach when
a) nearly everyone around you and within your environment shares your opinion
b) the majority in the media and prevailing political powers are relentlessly promoting your opinion and rubbishing the alternative view
c) Spokespersons for your field of expertise and operations (familiar and established players you respect and trust) are on your side of the argument and confident that this side will prevail
d) bookmakers and most commentators are predicting a win for your side, even the leaders of the opposite campaign.
Regarding how it came about, well that is the democratic process, for all its flaws. As I keep telling my friends, you can’t keep rerunning a vote or referendum until you get the result you want. It’s only as good as the cognitive function of the majority of its voters and the honesty and competence of its ballot counting processes.
Democracy demands a respect of its processes regardless of the results it produces, otherwise we may as well just have a dictatorship or a revolution. I am grateful that these processes are fair and well executed as I do remember a referendum which was held by the military dictator General Zia-ul-Haq in the 80’s. I remember reading the question regarding basically whether I wanted this idiotic megalomaniac of a military dictator to continue his despotic military rule. Of course I didn’t but the referendum papers had a caveat demanding a name and address if you didn’t want military law to continue AND if you didn’t put your address down (which was only a requirement if you said No) your vote was invalidated.
I would say the media and politics does a similar job in scaremongering, threats and misinformation in order to influence results and that there is a responsibility to be prepared for votes based on that as well as a backlash but that actually that people will ultimately be free to vote as they wish in a fair and well run system despite their brains being potentially washed or non existent.
The In Out vote was binary but the logic behind any such decision is not binary but the result of considering many factors to come to a decision.
I was In but my internal reasoning was 55:45, i.e. I thought Remain was a better choice than Out by a modest margin.
Life as we know it will not end and we will continue to prosper in the medium term. When the anger subsides then there will be accommodations such that the Out campaigners will be somewhat disappointed and the those who voted Remain will find the outcome not as bad as they feared.
Thats how politics and democracy works, whilst there will be losses, there will be gains as well.
Life goes on !!!
” Tony Benn explained it best. In the UK you have a government it listens to you and if it screws up it gets booted out. He became anti EU as he gradually realised that the intention was to create an edifice that would not be bothered by such a tiresome construct.” Martyn
Yes the inability to ‘kick the rascals out’.
This is the democratic deficit, the reluctance of the Euro State to listen and respond to the electorate, who did not vote for this behemoth construct, and feel helpless as a result to influence the direction of travel.
Many who voted Brexit (and possibly some of the Brexiteer leaders) did not expect to win. They voted Brexit as a protest against their helplessness and the deaf ears of the ‘establishment’.
Could things change ?
The more one ponders, the less certain the conclusion that Brexit will happen. There are so many problematic ramifications!
Let’s say Theresa May becomes the next Conservative leader?
As a Eurosceptic but not an Brexiteer, she might be able to get less intransigence from the Eurocrats, with the UK Referendum results very much in their minds, and the threat of popular movements in other countries moving in an Exit direction?
That might open up the way for a second referendum with new, more reasonable, terms on the table, as mentioned by several others above?
Investment-Wise, like others here, we have seen little action in our portfolio over the past week! Have put in one small sell order this weekend for International, and a watch alert on a few other positions.
With investment methods, try not to anticipate events/market moves, but simply respond as opportunities/fluctuations present themselves.
Watch those portfolios !
Excellent discussion, perhaps better than my admittedly rather emotional post deserved. While as I said I’m on a short fuse on this, I’ve only felt the need to delete a couple of comments. Maybe this is self-censorship on the part of the sort of commentators you read elsewhere given I’ve warned I’m a benign-ish dictator here, or perhaps we just don’t have many in the Monevator audience, but anyway, good stuff.
(There’s a couple of comments I have left up to give air to a particular sort of view, but I wouldn’t go piling on…)
Far too many interesting points to address individually, but a few further thoughts.
Firstly, there’s an admirable resistance here to calling people stupid. I understand the motivation, and I’m certainly not saying stupid people are wicked, ignorant in a wider sense, that they had every opportunity they might have had to improve themselves, or that they have nothing to contribute.
Clearly the world takes all sorts, and amen to that. However the fact is intelligence in the human race is distributed on a bell curve, and if words mean anything than a chunk of our population sits well to the left on that curve and we might as well call them stupid. It’s a reality of the situation on the ground, not a criticism, and I believe it’s a valid point to raise because this Referendum choice was not a trivial decision to make even for people with above average analytical and information processing skills. It was however an easier decision to make on an emotional level, and when you look at the distribution of Remain versus Leave votes, I think it’s pretty clear what happened.
Saying Leave voters were more inclined to be less mentally capable does not make every Leave voter stupid. Of course not. However we’ve all surely now seen enough Vox Pop interviews, campaign rallies, newspaper interviews, and comments on (other!) websites for a strong pattern to be emerging. I don’t think any unbiased observer would hesitate in drawing the obvious conclusion from the bulk of this evidence about the sort of people who made up a large proportion (not all) of those who voted Leave. The fact that many of these people have voted against their own self interest only adds to my conviction.
(Does anyone *really* think the sort of people who led the Leave camp are the sort who are interested in or equipped to roll their sleeves up and sort out entrenched disadvantage, which even if it was their most pressing concern (it is nothing like it) is one of the toughest problems of our time? Come on… — and I say that as a floating voter, not a tribal lefty.)
If these people shouldn’t have voted Leave for good economic reasons but weren’t well-equipped to realize it then should they have voted this way as a protest, or to try to make things better?
Well, perhaps. They haven’t got many tools available to them and with this huge stick they’ve effectively struck back at “us” for whom the modern working world is to our advantage. But however much sympathy one has for the bottom couple of rungs on the economic ladder, that doesn’t make their disaffection with the modern world represented by a vote on Leaving the EU a good reason for leaving the EU. Not even for them, let alone for us urban globetrotters. For me it means, as I tried to say in my piece, that the elites should have been paying more attention and concern earlier.
Regarding free movement and the economics of their plight, as I have said I don’t believe this is the reason for these people being in this position.
Most of the big dislocations in the working classes happened back in the 1980s, when the Poles couldn’t have come here if they wanted to. More or less the same thing that ails them is also evident in other big economies, especially the US but also other EU members that don’t attract so much inward economic migration. And as I say, even if I was personally persuaded it’s had a small downward impact (I’m not), I do not believe that halting migration, leaving the EU, and taking the short and long-term economic hits that will surely come are going to reverse their situation. I am very confident in fact that such an extreme solution (which many of them would advocate) will make their plight worse.
I say all this even while agreeing unconstrained free movement is the weakest link in the EU project. Mainly because I agree it’s made people fearful (regardless of whether it should have) and it’s changed some locales in a way many inhabitants don’t like (regardless of whether a metropolitan thinks they should or not). But also because it’s the toughest part of the capitalist component to the mission of the EU to get right.
Move goods around the place more freely? Easy. Play some great game of trans-continental musical chairs for five or six decades until people have found their right level and are deployed most efficiently by the market — by leaving their friends and families, their culture, and setting up shop far from home? Infinitely tougher. I have long admired the Poles and others who’ve come here for having the gumption to do this but of course it’s not for everyone. Just look at how hard it is to get people to move from say unemployment black spots in the Welsh valleys.
That UK language skills are so poor (particularly among the disadvantaged group we’re mostly talking about) while at the same time the UK’s national language of English is the common tongue of the global economy that their even poorer working class EU counterparts can speak to some extent only exasperates this. Realistically, not many people from Hartlepool’s council estates are going to learn Romanian or Estonian to seek a better fortune abroad.
So while I’m still disagreeing on the economic impact point, as I said in my piece I fully agree something should have been done much sooner about the numbers for pragmatic reasons (even though it would have meant an economic hit for the UK as a whole) and to soften/think about the cultural impact. Not because I wanted it, but because the country seemed to need it and we are all in it together, to borrow a blighted phrase.
Finally, on sovereignty and Brussels, I don’t think even many Remainers are saying the EU is perfect or even three-quarters perfect. However it’s at least halfway there, in my view, and it was a work in progress.
I really struggle to think of truly terrible things the EU has got wrong that are so much worse than what nation states have got wrong. Fine, we can argue about fishing policy in this decade or some financial initiative in that. But national governments make mistakes all the time, too. In fact, huge policy blunders by the EU are notable by their absence (a stronger gripe would be that too often they do nothing) with the arguable exception of their stance on free movement and I’d say potentially on the implementation of the Euro. Perhaps they enlarged too quickly in the east.
All those things happened slowly, though, and were enormously complicated issues. In terms of more sudden dramas where the EU hasn’t covered itself in glory, say the refugee crisis or perhaps the financial crisis, they were/are again massively complex problems, and national leaders soon stepped in anyway (which gives lie to the no sovereignty argument).
Meanwhile the vast bulk of what the EU has done from day to day has gone on unnoticed and without celebration, which is perhaps how such things should be. Comparisons with Germany in 1938 are beyond the pale.
Probably every one of us has some issues we’d prefer the EU had taken a different line on. That’s the nature of compromise. Not getting your own way all the time isn’t a lack of sovereignty, it’s a reality of human life on Earth. As we all trivially understand, nobody will get their way all the time even if all power is repatriated to London.
You can add up the more reasonable Leave concerns about free movement, sovereignty, and have some empathy for the emotional impact on certain segments caused by a world changing too quickly, and even if you agreed with them all, in my view you’d get to about a 30% justification for Brexit.
To get to more than 50% I think you have to start turning to the strong stuff.
The potential exception is sovereignty, since it’s hard to argue that a nation (for what a nation is worth, we can debate nationalism another day) cannot be more in charge of its own laws* than if it makes them all for itself. But the idea that fears over our Parliamentary democracy was what really motivated anything but a minority of Leave voters is fanciful.
*Note I say “make it’s own laws” not “be in control of its own destiny”. In today’s hyper-complex and inter-connected world, very many issues need so much involvement and compromise with other countries that I’d argue you get more control by working with more of them from the get-go. (E.g. Environment threats and global warming, international crime, tackling extremism, and many more).
p.s. One last thing from me and then I’ll shut up. It’s true, as some are saying, that we have to deal with it. However I think some navel-gazing just 48hours after the biggest political and (potentially) economic and cultural shock since Thatcherism is not just justifiable, it’s vital. This is especially because some solutions/coping strategies on a personal and a national level will only come about from such reflection.
Thatcherism turned out to be (at the least an approximation of) just what the country needed. I can’t really see how a true Brexit would be anything like that, obviously enough from all I’ve said, but perhaps the Protest element to the vote could be some kind of useful wake up call.
If we’re still wallowing in hopelessness in three month’s time you have my permission to apply the bucket of ice water. 😉
Spot on post. Mirrors my own thoughts too.
I do however believe many factors came to pass in remain not winning. Cameron “winging it” – I think he felt remain was a no brainer and only put effort in last February. Secondly whilst we talk about 1.25m vote delta, it’s actually only 625k vote delta if you had changed people’s minds. So the referendum actually feels undemocratic since a few right wing Tory newspaper owners peddled propaganda – eg the Sun, Torygraph, Daily Mail. They are puppets to their owners. Of course Osbourne stoking the fire with that stupid Leave budget when he won’t be Chancellor didn’t help.
It really does seem like a perfect storm just for Cameron to appease some MPs in his party. Oh well at least history will judge him.
Most of all I’m disappointed for the young generation. This decision means more debt, more taxes, no freedom of movement for them. Ironically the hardest hit will likely have more taken away – the government will be right wing remember.
For me the biggest issue is economic malaise. No business plan, no idea what’s going to happen and 27 heads of state that can each veto a negotiated trade deal – some with an axe to grind! Eg France and Spain
The best we can do is roll up our sleeves and get on with it. Johnson is not the person to heal the rift in our country.
@TI ….. “intelligence in the human race is distributed on a bell curve …..”
My 50 years membership of Mensa is something that I normally avoid mentioning, because it tends to raise hackles and wrongly provokes accusations of elitism. It was through my membership that I learnt of, bought and read the now classic book “The Bell Curve – Intelligence and Class Structure in American Life”, Hernstein and Murray, Free Press Paperbacks.
The book raised a storm of politically correct criticism but the authors stood their ground, supported by a raft of evidence. They were right, and Brexit is an example of their predictions writ large.
Isn’t the root cause of remains failure the fact they had nothing to offer other than fear? No message about how they would allay peoples concerns of the EU? Brought about because the EU would not compromise on its own position during DCs negotiations with them last year. Even a small concession I think would have swung it easily the other way. But no, remain had nothing to offer other than the status quo and fear of deviating from the status quo. That doesn’t win political campaigns. Leave had fear sure, but they also said they would be able to keep the economy going and address people’s concerns. They offered hope as well as fear. Hope is a winner.
To the point on Europe wanting to hurt us, I feel they won’t. They have their own nationalist parties on the rise and if they hurt us they will hurt their own economies. If their people feel poorer they will probably turn to the nationalist parties making break up of the EU more likely.
Always enjoy reading your articles.
There are some inevitable flaws in your argument. So this is just a fun take.
As someone who lived and worked in London but now lives in provincial and poorer” West Sussex I can see it from both perspectives.
The fatal mistake you make, my friend, is that you assume that London is progressive, richer and by inference happier. It is not. Life satisfaction is higher outside London, despite all the boons you and others understandably list. London can learn from the provinces in some areas.
http://www.bbc.co.uk/news/uk-england-london-24641185
The second mistake is to assume that mass migration and diversity in London is overwhelmingly a wonderful thing. I grant you it is a fascinating social experiment and the fact so many different people can generally integrate well (not just tolerate each other which is defeatist to me), more than possibly any other city on the planet is an inspiring thing.
The flaw is you, nor The Economist below (watch the video), take account of cooperative games. Paul Collier, the Development Economist, cautions against the “gung-ho” attitude of how society is changing. More than 50% of people in London were born outside it and that has long-term implications about how people co-exist. I am not even talking about Ben Judah’s bleak assessment of London.
http://www.economist.com/news/books-and-arts/21586813-costs-and-benefits-mass-immigration-mobile-masses
Social cohesion and democracy are like fresh air – they are taken for granted. All the utopias of the past – nationalism, communism and fascism – all ended in mass bloodshed. Liberal utopia is no different. Just ask the Greeks.
The trick is to better balance the nation state with globalisation. It’s hard and no one has that answer yet.
“Probably every one of us has some issues we’d prefer the EU had taken a different line on. That’s the nature of compromise. Not getting your own way all the time isn’t a lack of sovereignty, it’s a reality of human life on Earth. As we all trivially understand, nobody will get their way all the time even if all power is repatriated to London.”
One could direct the same argument at remain voters who didn’t get their own way and are now very upset about it :)……..
If leaving is so bad, why have a referendum in the first place? Why not have a vote in parliament with our elected representatives. Who have the time and ‘intelligence’ to consider all the expert opinion. So either we are all over exaggerating the economic impact of this (and I would challenge that even the experts don’t really know what will happen) or the blame for this sits with the government who should never have called a referendum in the first place.
@Richard — Let’s let some other people have a say now, eh?
@TI – 🙂 It’s a slow Sunday…….. It is an interesting discussion but will leave it before I get sent to the Monevator gulag
So where is Boris and what’s his/their plan?
Where is Boris?
https://www.buzzfeed.com/matthewchampion/four-brexit-promises-that-have-already-gone-up-in-smoke?utm_term=.xeXZjQ7pN#.fm9pXPr10
@above – remain was the status quo so we had to argue the alternative was worse and something to fear. Also, you say it would be logical for europe to give us a sweet deal. The leave campaign has been saying logic rarely comes into the EU’s decision making all along and i bet you agreed then. Besides which, will europe want to make jumping ship look appealing to sweeden, holland, front nationale etc?
Yeah, I agree, feels like the risk/reward favours short UK/EU assets here. Either art 50 is invoked and we get another big leg down, or it isn’t, and uncertainty remains elevated, so it’s hard to rally.
This was well written and I appreciate you sharing your personal views on this having grown up in almost two worlds, you can give us some insight and perspective you won’t get anywhere else.
We have friends who live in London and they’ve been absolutely crushed by this, since they are paid in pounds but all their family is in the US (and they will eventually move back). Fortunately they’ve been there long enough that they’ve earned UK and EU citizenship, but the currency haircut has been brutal.
May we live in interesting times. 🙁
Friday’s moves looked more like a pause to me. 3 months of uncertainty alone is likely to mean another leg, or two down.
Some interesting comments raised here – not so much the “poor me/us” comments [I’m clearly at the mentally-challenged end of the IQ curve :-D] but for those looking objectively at the situation and considering the opportunities – those viewing the world “as it is” rather than “as it should be”; after all, isn’t the central tenant of Financial Responsibility to take responsibility, rather than blame others?
@Felice_Pazzo
“A person who neglects what is actually done for what should be done learns the way to self-destruction.” –Machiavelli
It also happens to be the opening quote of a superb piece posted today by Bent Flyvbjerg
https://www.linkedin.com/pulse/power-has-rationality-does-know-bent-flyvbjerg-傅以斌-?published=t
Thanks for the rant, much of which I agree with.
The media’s 15+ year propaganda campaign against the EU has succeeded; their lies repeated so often that they’ve become fact in the mind of the public (see: http://blogs.ec.europa.eu/ECintheUK/euromyths-a-z-index/ – including the infamous straight bananas and square tomatoes BS).
I think we’ve had a severe and growing issue with wealth inequality and lack of opportunity for the poorest segments of society; the misdirection of blame for this onto the EU has been one of the biggest achievements of the leave campaign.
Anyway, onto my main point:
I guess I can’t be the only skilled young person seriously considering leaving UK? I’m fortunate enough that I could likely get a job in a variety of different countries, EU or otherwise.
Perhaps we’ll soon need a “Monevator Special: Leaving UK”, with guidance for how best to financially handle the move abroad!
I’ve got a bit of time to figure out what I want to do and make it happen, at least.
I am curious about the lazy assumption that the British media is fundamentally hostile to the EU.
The Mail on Sunday and Times backed Remain along with the usual suspects on the liberal left, such as The Guardian, FT and The Economist. Most would accept that the BBC is pro-European. A powerful and influential group.
http://www.independent.co.uk/news/uk/politics/eu-referendum-which-papers-are-backing-brexit-and-remain-a7089876.html
What I do think is that the media has indeed been reporting bad news about the EU for years. To take one example: The Economist has been criticising it for years, such as one front page on Jun 21st 2003, “Where to file Europe’s new constitution.”
http://www.economist.com/printedition/covers?print_region=76981&date_filter%5Bvalue%5D%5Byear%5D=2003
To suddenly do a u-turn a few months before the election and unremittingly support the Remain, ignoring all its criticisms of the previous 15 years, comes across as utterly embarrassing by The Economist. They were not alone.
No wonder people distrust the media of whatever persuasion and I agree that they have contributed to bad feelings about the EU, whether they intended it or not.
I live in Wales. I work for Local Government, and am a post-graduate. I am also born of immigrant parents. I am married, and have two young children. My salary is below 40k. I also resent being referred to as the bumpkin, the thicko, stupid, the closet racist, and all those other things that you would like to label me to try and understand why we are where we are.
I guess I see myself as a moderate Brexiteer. I voted Leave. Why? Sovereignty. The ability to vote in *and* out those who govern our lives.
I know why others have voted out. Instead of the sour grapes that I read here and the existential angst of ‘remaining’ in a country where half the population holds a different view to your own, perhaps you could spend the same amount of effort trying to understand your fellow man, instead of the usual vitriol that I see replicated. They feel marginalised, left out, sick of politicians blaming each other and then Europe whenever promises are reneged on. They are the globalisation losers.
I’m sure many of you won’t give a toss, but try and get outside of your own bubble and talk to your countrymen, not just those that are in the same socio-economic demographic as yourselves.
And as for your last couple of paragraphs? I can take my views elsewhere? Well, thanks. You take the ball home, I’ll go find some other friends to play with.
@all — If you’ve the stomach for any more, this take on the Brexit vote from PERC is thought provoking, especially on the nature of ‘facts’ today:
It goes on to make some pertinent comments about the markets.
Personally, I’m bound to agree with *most* of the conclusion:
Thank you for this article. My strong impression was that the leaders of the Leave campaign were also taken by surprise by the result. I think what Gove, Johnson and Farage were expecting and planning for was to lose narrowly but emerge from the vote looking like heroes “standing up for Churchill’s Britain”. This would offer the best of all possible worlds heading into the next election – with Britain firmly inside the EU, so facing a prosperous future, but with all the goodwill from the Leave voters to support BJ’s bid to become PM. Now I suspect they don’t quite know what to do. They didn’t offer any real plan for how Brexit would work and the reason for that is they probably don’t have one. I therefore have some hope, not a lot of hope but some, that Brexit may not become reality. Certainly there are huge numbers of people in the country who vigorously oppose it and as many have been pointing out the referendum is not legally binding, despite the fact that feelings about it are currently running very high.
What gives me less hope is the EU’s response – “Go, and go quickly”. That’s not conducive to any potential discussions.
Either way, I don’t think those who voted Remain should simply give up and say that all is lost. I think with so much at stake we should keep up the fight.
@Cathy I think that must be the explanation. They didn’t expect to win, so they have no plan.
I do try, no doubt imperfectly, to understand these sentiments, and I referenced some of those sentiments in the article.
What saddens me is they’ve just voted to make things worse for themselves.
To “valmiki”, from The Guardian…
…extract begins…
Wales isn’t just a net EU beneficiary, EU capital funding has been an essential part of attracting firms to come here.
All around town are signs marked with the EU flag for the Ebbw Vale enterprise zone. The website notes that as an EU tier 1 area, “companies can benefit from the highest level of grant aid in the UK”. Earlier this year the sports car company TVR announced it would build a factory and create 150 jobs there. Will it still come? Will the Circuit of Wales, a multimillion-pound motor racing circuit a private company has been proposing to build on the town’s outskirts creating 6,000 jobs?
Will the £1.8bn of EU cash promised to Wales for projects until 2020 still arrive? And what happens after? Will central government really give more money to Ebbw Vale than the EU has?
Even Kelly looks like he could be doubtful on this point. “David Cameron got a good kicking,” he says. So, what about Boris Johnson? Do you want him? “No way. He’s London through and through. He’ll just forget about Wales.”
Or as Michael Sheen, the Welsh-born actor from Port Talbot, tweeted:
“Wales votes to trust a new and more rightwing Tory leadership to invest as much money into its poorer areas as EU has been doing.”
…extract ends…
https://www.theguardian.com/uk-news/2016/jun/25/view-wales-town-showered-eu-cash-votes-leave-ebbw-vale
Thank you for your link to Aeon. I had a terrible shock on Friday morning. My Leave vote was a foolish whim and Remain was going to win wasn’t it.
Very sorry to all the young.
I read your post to the end and was sorry to read how disheartened you seem to be, especially as I generally find your blog to be relentlessly upbeat and encouraging. Personally, however, I’m less upset by the result, but perhaps that is because I am, as my wife accuses me, passionately in love with Merryn Somerset Webb, an intellectual siren in a world of boorish, frat boy traders. Given that she was for Brexit, I surmised it couldn’t be all that bad. Meanwhile, I reckon we’ll soon see another Conservative female leader against those obnoxious Eton boy Tories, that Mrs Merkel is already looking to cut us a good deal and surmise that Wee Nicola is a far too canny and smart Ayrshire lass to rush Scotland toward Europe. Therefore, as ever, we lads will be saved by the fairer sex. As we should be.
@valmiki – Well said. I support all you say.
Well, I would. I am a stupid, grumpy old man – a true provincial who does not appreciate the wonders of London and the financial blackmail it has imposed on the manufacturing industries of Manchester and Birmingham where I worked for many years. I worked with many human, caring but stupid people who worked on the production lines I supervised. Strangely, the most stupid person I came across was a CFO who wrote a budget assuming that brand new products could be introduced at the same yield as long established ones. Needless to say, it was our night shift that paid for his mistake with their jobs, not the CFO.
I note that the rant states that Britain has benefitted from EU membership but then equates that to London booming and Londoners being made rich together with all the Europeans who have moved in to London to share the benefits. Not much sign of those benefits out in the sticks.
London and Britain are in a very similar situation to Germany and the EU. The fact that you – London – generate the money and support us provincials does not make you any more appreciated than Germany is in Greece. Perhaps if OUR government had made the Northern Power House a reality years ago then we would not be in this situation. Perhaps if the Poles had stayed in Poland the Polish economy would have been dynamic enough by now to be a contributor to the EU.
Why did I vote Leave? The intransigence of the EU during DC’s negotiations; the stupidity of accepting Greece in the first place and crucifying it now; the gravy train of failed, second rate politicians who rule in the EU bureaucracy; the very different political culture of the EU parliament; the stupidity of Project Fear in misusing statistics and over-egging every disaster they predicted – maybe lies, maybe not quite -but certainly not the truth; special relations who abandon us when we don’t follow their demands; remainers who accuse brexiters of lying when it is the remainers who have not listened, who are simply stirring for stirring’s sake.
Incidentally, so far the armageddon has resulted in my portfolio increasing in value (in £’s). Thank you Monevator, it was your advice to diversify that ensured that increase.
@ Duncurin, I don’t disagree that some of the comments made by Leave voters interviewed on TV have demonstrated a lack of understanding. However I’ve found many of the Remainers at least as ill-considered; one of the depressing characteristics of the campaign has been the poor quality of the debate and hence of the public reaction.
This will be thrown into sharp focus as exit negotiations begin. Leave promised ‘an Australian-style points system’ for immigration but has also hinted at remaining in the single market, perhaps through EAA membership – something that requires a commitment to freedom of movement across that bloc, including the EU. This obvious contradiction was in my view insufficiently challenged during the campaign, but will become very clear in the coming months.
@Financial Samaurai, Yes, democracy is about freedom to determine our country’s future, even if some other people think we’re mistaken. At the same time, history and economic theory both indicate that co-operation is usually preferable to isolationism, and it is a cause for concern for many of us that we’ve chosen the latter.
You asked whether we voted out because we’re already very wealthy and can afford the short-term hit. No, that’s largely not the case. Those who voted out are, largely, a coalition of the poorest in society and the oldest. Some of the oldies have a lot of money; many don’t. The single biggest determinant of EU voting behaviour is terminal level of education: graduates voted about 70:30 for Remain; non-graduates by the same margin for Leave. So, excepting a few older voters who may remember the original vote to enter what was then the Common Market in 1973 and are alarmed at mission creep, this is mostly a last roll of the dice by people who feel they’ve been left behind (shades of Trump populism) rather than an exercise in deferred gratification by the wealthy.
Could there be another vote in a couple of years? Wouldn’t rule it out. I doubt it’d be a full-on vote to rescind the exit vote, but rather an endorsement of something other than splendid isolationism. I could see the Government negotiating some kind of semi-detached relationship with the EU, which would have to be called something other than ‘membership’, which they would put to the vote, with the alternative being full exit. My guess is that it’d get 75-80 percent.
As for how we view the US Presidential race, I can’t speak for 65 million Britons but can convey how I and those close to me see things. It’s encapsulated by a short comment piece, I think from the New Yorker, that has gone viral here since Friday. It observes that the Leave vote has deprived us Brits of something we prize, namely the opportunity to feel superior to Americans. Dubya, people campaigning against universal healthcare, police shooting unarmed black people, crazy citizens being allowed to buy guns and shooting each other (most recently, someone on the FBI terrorist watch list); we see these things and quietly congratulate ourselves for having more sense. On this occasion, we’ve lost the right to shake our heads, as we appear to have taken a step that is against our collective best interests.
The article’s pay-off line is that we very much hope to regain our sense of moral and intellectual superiority in November when you choose either Trump or Clinton as your next President. I think a lot of us see Trump as your equivalent of Boris Johnson, but with added racism, misogyny and guns and Clinton as your Blair: in the pay of the banks and big business, detached from the people and lacking in deep-seated principles.
@Magneto, are you a fan of game theory? I detect more than a hint of it in your thinking. It wouldn’t surprise me if Theresa May becomes the ‘stop Boris’ candidate for the Conservative leadership. Many grassroots members consider him a flaky opportunist and, being mostly elderly and small-c conservatives, worry about some of the more colourful aspects of his private life, some of which are not in the public domain but are whispered at party conferences. Possessing the qualities BoJo lacks – detail, persistence and diplomacy – I think she would be the ideal person to negotiate the mutually face-saving ‘EU member lite’ deal that would serve the economic interests of all parties.
Yes, the same status might be desired by the peoples of other EU nations, but is that a bad thing? The Eurozone needs much closer fiscal and supply side integration to function – a painful process that will take many years – but for the countries that haven’t taken that plunge, only the egos of some Europhile politicians and Brussels functionaries stand between the peoples and achieving a looser affiliation of the sort that I believe the UK wants and, if the stars are aligned, may yet achieve.
@The Investor, we differ in our assessment of the intellect of those who voted Leave versus Remain – I think there were smart people and idiots on both sides of the debate – but we share a view that one factor that motivated some of the former is a desire to hit out at those for whom the political consensus of the past 20 years has been advantageous.
I’m no Marxist, but I wouldn’t entirely disregard the possibility that this was a wholly intelligent and rational action, correctly designed to redress an imbalance. As people at different points on the journey to early retirement – I’m over the finish line, and assume you are too – we share an aspiration to live largely on the returns generated by our capital, rather than our labour. To do so is to live on the surplus profits generated by the labour of others. This is, largely, a zero-sum game: for the indigenous population of Shirebrook, where Sports Direct is based, to improve their lot, it is necessary for the firm headed by Mike Ashley to be deprived of a limitless supply of Eastern European workers willing to be strip-searched in their own time every morning and to risk being carted off by ambulances for fear of being sacked for attending doctors’ appointments.
Furthermore, wealth and poverty are relative, not absolute. One thing that saddens me about London is the extent to which it has been socially cleansed: increasingly it is occupied by the global rich (‘blocked’ may be a better word, as many spend little time there), a handful of middle-class Brits lucky enough to have done well out of working for rent-seeking professions (financial services, law, multinationals) and a few token proles lucky enough to have secure tenancies in legacy social housing projects. Deliberately harming London by making it a less attractive place for the global rich to park their money and eliminating the economic rents drives down the cost of London property and the cost of buying the services of the former oligopolists, which improves the lot of those hitherto excluded. Another zero-sum game,
@Topman, I too qualified for Mensa membership, some 25 years ago. I attended two meetings before quitting. Two things surprised me. First, members are drawn from all walks of life; I met no QCs or investment bankers but befriended a sous chef, a primary school teacher, a plumber and a provincial accountant. Second, they seemed to spend their time together doing quizzes, attending WI-style lectures and pursuing hobbies rather than harnessing that collective intellect to solve the world’s most pressing problems. Yes, there was some intellectual snobbery, but in my view it was ill-placed since the demographics of the organisation undermined any suggestion of meritocracy and in any case it felt like an organisation more interested in self congratulation than in giving something back. Which might be an accurate description of the economic elite, as well as the intellectual one…
@Dustofnations, were I in my early/mid 20s now I would doubtless emigrate. Perhaps not to the EU (with the possible exceptions of Germany and Malta, I suspect they face headwinds) but possibly to New Zealand, a country that combines high transparency and ease of doing business with self-sufficiency in food and water, plenty of natural resources, good trade links with the growing economies in Asia and, in my humble opinion, some of the world’s nicest people. I’m now 47, financially independent, and depending on how the Brexit negotiations play out, will explore whether the Kiwis might consider allowing me into their amazing country on an investor visa…
@Richard – Thanks for sharing your thoughts. I didn’t think about the older folks losing less b/c they already have their pensions and homes. It is too bad the vote was so narrow. Now perhaps there will be a lot of civil unrest.
@Mark – Thanks for the clarification. So in other words, it seems that people who have LESS at stake voted to leave, which makes complete sense. In the US, we have a group of people who always vote for MORE spending, LARGER government at the expense of a certain group who have to pay for increased spending e.g. homeowners through property tax, and wealthier people through a progressive income tax system. Of course you would vote for more if you don’t have to pay for it.
I’d be surprised if there wasn’t last minute negotiations or a revote. Come on, the MAJORITY of people in Great Britain will SUFFER financially long term. People will eventually come around to realize, THEY ARE STILL FREE even if they are a part of the EU.
Sam
I’m sure for many leave voters sovereignty trumped all other considerations.
On the economic issues opinions were varied. Some leavers will have been reassured to read that “it is plausible that Brexit could have a modest negative impact on growth and job creation. But it is slightly more plausible that the net impacts will be modestly positive.”*
* https://woodfordfunds.com/economic-impact-brexit-report/
@Mark
For the record, Mensa is protean, welcoming all who take and pass the selection test irrespective of their life situation.
It is common for newcomers to agitate for a collective output from the members but that is wholly to misunderstand the nature of the Society. No two members are the same and quite often they will be polar opposites. You have more chance of fitting an octopus into a set of bagpipes than getting majority agreement on any matter. Tolerance accompanies the high IQ of those who stay the membership course.
The richness of Mensa is the diversity of its membership, and its enduring attraction is the extent to which you can guarantee that someone “on its books” will have the right answer to any particular problem and that someone else will doubtless disagree!
As for New Zealand, I lived and worked there for a while, with the intention of staying but I very soon couldn’t wait to get back “up over”. All that glitters etc ……
I suspect that you would have taken out and paid off the mortgage on your long awaited house purchase TI long before the UK government get around to submitting any formal letter invoking article 50 in this latest brouhaha between the protagonists.
In the interests of disclosure, I’m long fudge.
Perhaps the ultimate irony.
BOJO campaigned on how undemocratic the EU was. How the key players were un-elected.
Now he will stand for election as leader of the Tories, and maybe elected as the Prime Minister by that comprehensive quorum of the people in the UK that is the Conservative Party membership.
Will he call an instant election to obtain a mandate from the wider electorate, I wonder?
@JimH — I am trying to understand (and I believe I do a bit, though not like those who are there of course) some of the frustrations of the provinces, and I tried to show that in my piece. I guess not sufficiently for you. That’s fair enough.
As with @valmiki, I believe that if you get what you’ve just voted for you’ve made your situation worse.
The EU was a force for redistribution from London and the South East, and given that our country has just lurched to the right and the provinces have made plain, as you mention, that their citizens don’t much appreciate the redistribution anyway, I fear the taps getting turned off in the worse potential post-Brexit incarnations. (Like many this weekend I’m currently hoping the whole thing will be kicked into purgatory somehow).
Brexiteers are not going to find away to take us back to the UK economy of the 1950s and 1960s, which is what some of the sentiments I hear seem to suggest. I suppose they might find the 1970s, but much more likely they’ll go down an uber-free-market route of somewhere like a Singapore.
I’d have picked a better target for my protest vote, personally.
@david m — Yes, read that report when it came out a few months ago and I believe I linked to it. It was compiled by a company headed up by Roger Bootle, a noted Eurosceptic. Still, I don’t recall being able to detect biases within it, not that I’m sure I’d be equipped to unless pretty blatant.
Regardless, I don’t think there’s any point in us engaging in a tit-for-tat link war with *old* articles/research. There were only a small handful of pro-Brexit economic studies and opinions. The Remain side will definitely win such a link war. We’d just fill the comments with old links, and eventually I’d have more to point to than you. 🙂
Most commentators and even the Leave leadership admitted at some point the ‘expert’ economic evidence was overwhelmingly against the Leavers, who argued a combination of “they would say that, wouldn’t they?” and “wait and see” in response, and, as has been discussed above, even made the case that this vast weight of informed opinion was wrong / best ignored / should be rejected almost as an act of patriotism. That became a feature of the Leave campaign.
Well, perhaps they were all wrong. Perhaps I am. Time will tell.
As I say in the article, I think we’ll most likely pull off some version of muddle through, economically speaking. But I doubt it will be as good as what we gave up, especially with our special positioning in Europe and our own currency, and I doubt it will have been worth the risk.
I remember most things and I believe am not bad at admitting when I’m wrong. My rant will stay up on this site. If the UK is thriving in five years having undergone a true Brexit in any meaningful fashion, I’ll hold my hands up.
Hi everyone. Stand back and look at the whole picture the UK is still part of the EU today and tomorrow. The referendum didn’t convey the result to automatically become law. The result of the referendum was only advisory. David Cameron didn’t trigger Article 50 (which is the only official way to leave the EU) he just snookered the next PM. What PM is going to go down in history as the one who fried the UK economy and broke up the UK. Expect a lot of excuses and fudges because my bet is that Article 50 will never be triggered. Have a read of this http://jackofkent.com/2016/06/why-the-article-50-notification-is-important/.
I feel very much understood and represented by the main post and most comments, so I will keep my opinion mostly to myself…just wanted to add something to this:
“Put bluntly, employers would rather hire a smart, motivated, probably university-educated, likely young Pole than a morbidly obese, poorly educated, long-term unemployed possibly weed-demotivated, tattooed, British chav. Which explains why most of the new jobs created in the UK in recent years have gone to immigrants.
Turn off the EU supply and employers have to hire the settled population, even if that forces them to provide training and supervision and accept lower performance than Piotr or Agnieszka might have needed.”
The opposite is true – I am an immigrant and work in hospitality in London, so I have some first-hand experience in this matter.
I have been working in the same restaurant for almost three years from 2012 until 2015, and we got several applications each week from people from all over Europe. In those three years, we had one (ONE!) application from a British person, and my manager took her on with open arms and a big smile on her face, just because her mother tongue was English – it would be easy to train her and she would be able to have a proper conversation with customers (turned out she was good! not stupid at all!). This is no exaggeration. The restaurant was used to hire people with no experience and mediocre (waiting staff) to poor (kitchen staff) English skills, because nobody else applied although there was a good HR department in place. I am now working at a different restaurant, and all staff was offered a bonus for successful headhunting among friends because we. can’t. find. proper. staff.
Don’t think that a university degree makes a good waiter or cleaner, by the way. Big mistake. Also, don’t think that Eastern European, degree educated waiters don’t have tattoos, are never lazy or don’t enjoy their little weed cigarette after their double shift. People are not so different from each other.
My point is this: there are very, very few English/British people applying for the jobs that immigrants do in London. I think we can also agree that these relatively low-paid service jobs will not magically move up to Northern England after Brexit, hence the poor people there who were willing to vote out immigrants of the UK because they supposedly make everything worse, will actually have no gain out of the situation. And maybe we can further agree that there are not many (legal) ways how a national minimum wage can get any lower by supply and demand of cheap workforce.
On the other hand, the British poor are, like everybody else within the EU, free to move where the jobs are. They are free to move to London, pay a hefty rent for a room in a flatshare, have a lovely daily commute in a red double-decker for hours, all that for a way below than average salary. The difference between “the poor Northener” and the “the poor immigrant” is that the poor Northeners can catch a train to visit their families on their days off, that they don’t have to learn a new language and that they will have it even easier to find a job. But because they don’t want to use their right for free movement (not even within their home country, FFS!), they decide to take that same right from other people. So yes, I am really pissed, and my fascination for the stupidity of people is momentarily stronger than my compassion for “the poor” or “wealthy old Tories” or whoever. SORRY.
It all sounds so easy, you know (@ermine, I love your blog and hate to criticize you, but I must.) – immigrants come here and make everything worse because they are willing to put up with bad living conditions and it is still better than in their home countries. No, it is NOT better. London is a challenge for everybody who comes here, no matter where you are from. I see 19-year-old girls who are still babies in their head leaving their family and their nice sunny beaches in Spain or Italy to come here and work 50-hour-weeks for 7.20 per hour and getting told off by their managers for being late for their 5a.m. shift, which happened because they don’t know what “this bus is on diversion” means. they are afraid to lose their jobs for minor mistakes, because how shall they pay their rent…actually, how shall they pay their rent? They don’t have a bank account and to open a bank account you need a proof of address and they don’t have a proof of address because flatsharers seldomly have their name on utility bills, and their NINO appointment is only due in four weeks. They are tired all the time, because they spend too much time commuting, and running errands or shopping for groceries takes five times as long in London as in any of their home towns. When I say that my main reason for being here is that I love to be here, they look at me as if told them that I love to swim naked in the Thames every morning. I could go on forever. No wonder that Londoners get a sense of pride and smugness after the first culture shock has fallen off. We couldn’t stop the waves, but we learned to surf, baby!
By the way, I don’t know anybody who siphons pounds off the UK economy to send money home to their family…usually low-paid Londoners spend it all to ease the pain. Except me, I read monevator and invest 😛
@oldpro
I read the same Guardian article and my conclusion was that throwing money at a problem is not always the right answer, relying on handouts can be deeply humiliating – people still want a voice. Even Gordon Brown learnt that lesson, too late. We in South Wales have much experience of firms coming in creating jobs whilst grants are plentiful, alas they don’t hang around for much longer.
As for the companies that wrote to their staff to ‘inform’ them about the pros and cons of how to vote – an indirect threat if nothing else – it wasn’t that long ago in this country that factory and mill owners would have engaged in similar behaviour. Nobody likes to be threatened, especially by modern, global companies that would not hesitate to move jobs abroad if it was on their best interest. Have we not learnt anything? I’m sure that pushed a few votes away too.
@JimH I was born in Manchester, my parents moved to the UK in the late 60s to work in the cotton mills and I was born there. Then of course, they closed and so we moved to Wales. Thank you for providing some coherent and intelligent points to ‘our’ side of the debate. It heartens me to hear me rational views such as yours, there are not enough of them. But, I’m guessing you don’t need to stand on a soap box and tell everyone at length. I concur with your points, to me regardless of immigration, funding or anything else the right to self-determination is paramount, which cannot and should not be bought.
Yes there’ll be some short term volatility (in the markets and politics), plenty of navel-gazing and angst, the outpourings of grief on social media. It’ll be worth it, I have faith in the future, for all of us.
@claudia — Thanks so much for sharing your long post and insights, which add a unique contribution to this discussion so far. (I also know exactly what you mean about pride in ‘surfing’ London. Be careful… it becomes a drug that’s hard to unhook. 😉 )
When you say:
…I couldn’t agree more.
While I have some sympathy for how income inequality/rapid economic change is challenging certain regions and demographics, this is one big difference between me and the people in the provinces who complain about a lack of opportunity.
I left. They won’t.
I left too and never regretted it less
I am a provincial grumpy old man and the only reason that I abstained rather than voting ‘leave’ was to avoid the wrath of Mr and Mrs Accumulator.
Rightly or wrongly my reason for wishing to vote leave was because of the disconnect between the establishment and me. Being part of Europe was what I voted for in 1975 and it has achieved the main objective that most of us had at that time – that of reducing the possibility of conflict in Europe. Conflict in Europe is now slightly less likely than Nicola Sturgeon declaring war on England. Job done.
The problem is that Brussels is even more remote than Westminster and I and my fellow provincials don’t know which is responsible for our laws nor to whom to complain. I think the role of MPs has diminished as a result of Brussels and the increasing strength of the whip’s offices.
I have been an honest financial advisor for years and I have been aware of the blind eyes looking away from highly questionable practices at the top of the financial institutions we provincials are dependent upon. It must be the most self-serving and unscrupulous industry of all so the remain claims that the countries most valuable asset, it’s splendid financial services industry was at risk after it having cost us a decade of growth infuriated me.
My belief is that there should be less emphasis on the financial services industry and more on exploring the potential value of the rest of the U.K. work force. London appears to have raised the drawbridge and left us to contemplate our irrelevance.
Once free of European rule the focus may turn back to the whole of the United Kingdom and, in export terms, to the wider world. Our parliament can create a more equal value driven society that is an example to the world. We will continue to value immigrants as much as ever but will place greater emphasis on improving conditions in Africa and the Middle East to reduce the immigration pressure on Europe. This is probably the most important and most urgent task we face.
I know. Just the rankings of an aging idealist……..
Immigration is good.
Thanks for a great and cathartic article. I am very depressed about the outcome and increasingly angry that the leaders of the Leave campaign are now admitting to misleading the electorate with their claims. Your quarantine box gives some good flavour of that, but I am extremely disappointed that whilst journalists are now expressing their true feelings and incredulity it did not happen in the campaign when it mattered.
As for the areas outside London. Message received; it isn’t just the bottom of the social groupings and although I understand the point of Owen Jones’ article there is a vast reservoir of discontent and a long history of neglect that has resulted in this collective two-finger salute from a much wider demographic.
But two days out those who gave you a vision of freedom are furiously back-tracking. I voted remain, so am glad for any amount of damage limitation that prevents this becoming a gratuitous exercise in self-harm but what of the leave voter? Does it taste like freedom or has the realisation started to sink in that your campaign was led by cynical and lying opportunists?
Anger vented. I’d truly love to hear how we can rebuild trust in this fractured society. The EU is not the underlying issue, but it has acted as the touchstone for a longstanding and deep resentment.
Likewise, I moved from Yorkshire over thirty years ago to live in London as most of the pharmaceutical industry jobs were down here. Living in London is not that great, particularly the commuting but it does have a certain vibrancy that might be said to offset the disadvantages. To be honest I don’t think I would fit in if I moved back to Yorkshire. I have changed too much.
@barryM if that had been the leave case I could have voted for it .. but Farage took it in a whole different direction
@Financial Samurai, Yes the Leave voters include a lot of people who don’t have a lot. But they differ from people in the US or UK who vote for more spending and bigger government because they want less of both, or more accurately to remove a layer of both (the EU).
So they’re probably more like the Tea Party or Trump supporters – people who believe that a corrupt establishment, in hoc to the banks and multinationals, are to blame for their misfortunes.
@Claudia, thanks for your insights. I think the observations that Ermine and I made are based on our observations of the interplay between the native working class and (EU) migrants in the UK’s post-industrial provinces, not London. I appreciate that in the capital, it’s difficult if not impossible for employers to find sufficient staff for lower-paid roles without heavy reliance on immigrants. In areas of higher employment, this isn’t the case, but immigrants are often preferred because they tend to be more skilled and motivated than the long-term unemployed.
@The Investor, you’re right that something really important separates you from disadvantaged people in the provinces, namely that you left and they didn’t.
There’s a wealth of good writing on this topic (check out Chris Dillow’s Stumbling and Mumbling blog and Malcolm Gladwell’s Outliers book) that suggests that people who’ve achieved success in life oversubscribe this to ability and hard work and underestimate the impact of luck, and external factors such as those contributed by the state, in their good fortune.
While I don’t want to underplay your contribution to your present circumstances, consider for instance whether your move to London (I assume to work in financial services) would have been possible had your parents chosen to conceive you at a different time. Had your graduation coincided with a period of downsizing and recruitment freezes in your chosen industry, that form of mobility would not have been available to you. The son of a Home Counties professional might have dealt with this by taking a gap year or series of internships until the market recommenced hiring. I don’t know your family circumstances and how well placed your parents might have been to support you after university, but I know in my case these options were non-viable, and I suspect the same would apply to a bright young person from a similar background today, eyeing jobs in investment banks but seeing graduate programmes on hold due to Brexit.
@Barry M, your comment about “the blind eyes looking away from highly questionable practices at the top of the financial institutions we provincials are dependent upon” resonates powerfully with me because one of the things I do now I’m freed from the pressures of 9 to 5 work is advocate on behalf of victims of misconduct (as the FCA euphemistically calls it – I prefer the word “criminality”) by the financial services industry.
In this regard, one of the few chinks of daylight since Friday morning has been the resignation of Lord Hill, the man nominally responsible for ensuring that EU-wide financial services regulation serves consumers well but, in reality, a powerful advocate for City interests. Outside the Square Mile, he won’t be missed.
Just coming out of hiding to say that I think it is a bit much to expect poor people from the provinces to move and live the rest of their lives in a tiny flat share in London they will never escape and to be grateful for it. Esp when they see old school ‘friends’ living the high life. It just drives the feeling of inequality. It also drives the feeling of a serious drop in living standards (esp if they were raised in a proper house in a proper neighbourhood etc).
Of course if you have a degree and prospects of a grad scheme at an investment bank then moving to London is a no brainier and you would be stupid not to. I don’t think many of the provincial poor are in this position.
Then again you could argue they had the same opportunities to get educated and didn’t take them and it is their own fault. This is probably the reason the government tried to get all Brits to go to uni, but don’t think the aim of that actually worked out in the end (Brits in the better jobs being ‘served’ by an immigrant workforce). I don’t think knowing that would make them suddenly start voting differently though.
@Richard — And yet that is exactly what many of those derided immigrants do, with knobs on.
As a wicked smart friend of mine emailed me today (a friend who has seen firsthand professionally how EU redistribution makes a big difference, incidentally) in-between her crying and smashing things up over this result:
@Mark
> New Zealand, a country that combines high transparency and ease of doing business with self-sufficiency in food and water, plenty of natural resources
.. and some of the world’s most expensive property, relative to wages. London look reasonable in comparison. Though if you are in FI and have the capital it is certainly appealing. Personally as a poor middle aged NZ+UK citizen expat, I’d be more inclined to move back to the UK – even in recession – than back to NZ.
@david m
> I’m sure for many leave voters sovereignty trumped all other considerations.
I keep coming back to that point, though it’s a foreign concept to me. Theories that it was a protest against Westminster or austerity don’t add up when these same regions returned the Conservatives to power barely 1 year ago.
@Barry M
> My belief is that there should be less emphasis on the financial services industry and more on exploring the potential value of the rest of the U.K. work force. London appears to have raised the drawbridge and left us to contemplate our irrelevance.
That would be a very positive outcome. I sincerely hope it comes to pass.
@Mark — Since I’ve made some of this about me and this whole weekend feels personal and a bit emotional, here’s a bit more detail than I usually share.
For most of my working life I was a media freelance. I have quit three full-time jobs and in total had a regular job with a paycheck and paid holidays for roughly three years out of my 20-odd years of working life.
Until 2010 or 2011 I’d only paid higher-rate tax once, in a particularly good year. The last 2-3 years though only SIPP contributions have prevented it, so I am earning more these days.
My first job paid from memory £15K. I took a 25% pay cut after six months to do something more fun. In 2005 I co-founded a company, put a decent chunk of all my (house deposit) savings into it, earned £10K or so pro-rata for 18 or so months before extracting myself at cost. (I later made up for the lost earnings when I sold my residual shares that I’d retained at a higher level).
I then didn’t work for 3-6 months and lived off the refunded Director’s Loan, before deciding this is no way to spend my days. (This experience taught me that — health willing — I have no aspiration to retire early.)
I had a student grant and a loan through university. My parents would have put me up in their house back home, though by then they’d moved and I’d have had to share a room with a sister or sleep on the sofa. They’d have gladly fed me at the dinner table with my three siblings. But they had £0 spare to support me in London, or indeed support any sort of post-University life/spending.
But you’re right, I was lucky. 🙂
Chiefly I had wonderful parents who didn’t teach me to blame everything and everyone else and especially Thatcher for my problems.
Instead they taught me to read books and learn and to make something of myself.
My dad was smart but there was essentially no prospect of University; his very upstanding and solidly working class parents didn’t or couldn’t disagree. He did pretty well given all that, but could have done much more if he’d been born into exactly the same situation as me.
I was born fairly smart. Not everyone is. That’s helped, as has discovering a love of investing.
For most of my life I’ve been healthy, though the past few years have been a bit harder for reasons we don’t need to go into. Health is everything.
I don’t need or expect much. I have porridge with soya milk most mornings for breakfast, and fancy toasted seeded bread with peanut butter and banana for lunch. I am happy enough on a spare fine evening to walk around my leafy-ish London suburb listening to a good podcast and nosy-ing about on the neighborhood. Not being very materialistic helps in innumerable ways.
I have saved/grown my money enough that I could move back to the town I left on that train all those years ago, and never work again.
@TI – in case there is any doubt, I did vote remain. Rather than get angry I am trying to understand why the vote went the way it did. To my mind, it is the (at least perception) of ever decreasing living standards among a large portion of the population. I think this was probably driven by the 2008 crisis that we have never really recovered from. Jobs feel insecure, pay is static or in some cases dropping, services are being cut, benefits are being cut, schools are over-subscribed, houses are unaffordable and the list goes on. Who gets the blame for this (typically)? Immigrants. Why? Because they are willing to put up with a much lower quality of life than many UK people expect when looking at their own upbringing and their parents lives. They are seen as putting strain on services and taking benefits. Then you have the rich, who obviously don’t pay any tax etc.
Even the middle class professionals ‘put up’ with a flat share. But I would guess that they plan to get out of it at some point in time, and they expect their incomes to grow as they go into their 40s. The poor are unlikely to be able to do either.
Whether it is right or wrong, this is the line I have read in the media for years and will have driven a lot of dissatisfaction. The EU wouldn’t budge on even a small confession and the result is what we now have. Of course I am probably overly simplifying it and am happy to hear contrary views to this.
I do like your friends point around not seeing redistribution at work – but again this begs the question ‘why put it to a referendum?
I haven’t got through the whole article yet – but like you, I always thought that the poorer eastern European countries should be “brought up to speed” over at least 20 years before given the same freedom of movement rights as the better off states of the EU. The eastern countries had a completely different economic (and political) history since becoming communist Soviet colonies after the second world war and it was wrong to assume they would not immediately take advantage of freedom of movement to seek a better (working) life in the richer parts of the EU.
Saying that, I don’t believe the EU is responsible for as much of the immigration the Brexiters have blamed it for. More than half the immigration into the UK last year was from non-EU countries which the government has full control over regardless of the EU.
@TI Yes, your health is your wealth though it’s usually only the sick that realise this (or those that care for them.)
You absolutely do not have to justify your family or any other background on here although it is your prerogative. Assumptions will always be made, I laugh when people get me wrong as they very often do, it just shows how genuinely uninterested people can be in others or they would surely have got to know eachother better.
On a lighter note, I like your food routine! Rather like mine except I have half an avocado on fancy seeded toast for lunch. Supper of course is a much more exciting affair! 🙂
@richard
Could it have gone this way because the low income/education demographic knows they’ll genrally be rescued by social benefits provided these are not squandered by immigrants?
However the knowledge that they’ll generally be rescued by social benefits also means that their motivation to get an education is not high.
Leaving the EU therefore sounds attractive because on the surface, it appears to reduce immigrant competition for social support; but their lack of education means that they don’t fully understand that the economic consequences of Brexit will not give them what they want.
Hence their Leave vote.
@The Investor, Thanks for the personal information. It means a lot to me to understand more about you and your journey to financial independence.
We have more in common than I suspected, as I too have worked in the media industry for a chunk of my career and have been self-employed and run small businesses for much of that time.
I admire the fact that you’ve defined your good fortune in terms of the culture and expectations your parents bought you up with, rather than any monetary factors. For me, one of the sadnesses about economic disadvantage is that it often expresses itself through a lack of aspiration that parents have for their children, and poor examples that they set. To have had parents who were supportive and emphasised the importance of learning and hard work is one of the most valuable, but intangible, blessings any person can be born with.
@Max – yes, I would say very much so. If I remember rightly one of David Cameron’s key asks when he was negotiating a better package was around limiting benefits to migrants (4 year rule). If it wasn’t in people’s minds before then, it most certainly was afterwards. Of course the EU ‘compromise’ on this point (something like if it hit a certain number they would debate allowing us to reduce benefits) was easily ripped apart as not being worth the paper it was written on by the leave team.
I think David Cameron knew exactly where the risks were and what the EU needed to do to head them off. They just gave him nothing to work with. Of course they would say he was holding them to ransom by having the referendum in the first place and the U.K. got special treatment already so I don’t completely blame them. This game of Machiavellian politics has ultimately backfired on all of them.
Shock
Denial
Anger
Negotiation
Depression
Acceptance
Work through them quickly, or at least ensure your portfolio is insulated from your moods and any possible fall-out.
Thanks for posting, TI, I made it through. I shook my head at some of it, enjoyed the market bit and tutted at other bits. I’m not going to rehash old arguments here. We lost, and it’s unthinkable that we are going to go against the will of the people and not have unrest unless the EU comes up with a substantially better deal that can be put to a “u-turn” referendum. The public worked through Shock pretty quickly on Friday. Denial (we might never leave!) and Anger have been available to anyone with a facebook login. Name-calling and motivation questioning have been rife – how dare they put their X in the wrong box for the wrong reasons? They’ll be the worse for it! I might even have done some of it myself, and it’s not pretty. Negotiation (the petition, Holyrood will block it! etc etc) and soon the slow acceptance that we’re off unless the world changes.
Is it going to be a disaster? Probably not. Not my first choice answer, but it has some things going for it. We’re a nation that thrives on immigration and a government that has the choice of letting in EU people or not paying for the NHS will fling the doors open just as wide. Is there a non-racist problem with immigration? Well there’s only two countries in the EU which speak the world’s most common second language, so London is a natural target for a disproportionate amount of immigration. Bring them on, I say, but there’s probably a limit. Will we continue to trade with Europe? We have for the last 2,000 years, mostly without the EU, so I imagine we’ll keep that up. And we do have a habit of trading well round the world. And the EU is clearly an imperfect organisation — we are mostly still of our country rather than of Europe, my Roumanian Uber driver admitted the other night. Would I really be as happy with Chinese and Indian drivers? Turns out racism cuts both ways. Historically we’ve negotiated an A1 ringside seat where we opt out of the really scary bits but still get to profit from them, but time change. Let’s move on.
I too had a scary Friday morning. iii seemed better at getting firm quotes than TD waterhouse in my sample of two brokers. But then it turned out the apocalypse wasn’t as bad as I hoped. I cashed in my S&P500 at an all-time-high (Trump, interest rates, goodbye), hoping to nab some cheap FTSE, and the thing was so damn resilient it refused to get into bargain territory. At least I hadn’t sold my gold beforehand… This week might yet be interesting. Be nice if the Chancellor showed his face at some point…meanwhile there’s all this cash…
I think you all need to [section deleted by @TI because I want to preserve the generally friendly tone of this discourse] realise what just happened
As far as the EU machine is concerned we left on Friday. Everything else is just details
If you know any Europeans you work with they feel betrayed, scared and very pissed at you
Their friends, relatives and their governments back home feels the same way
Britain has no friends left in the governments that can control the EU
At the very luckiest we might end up with a Norway style deal where accept every single EU rule (including free movement of people), have no say at making those rules and pay about 85% of our current EU budget contributions. I do not believe Norway has the ability export services into the EU
At worst we won’t agree a trade deal and end up relying on World Trade Associations tariff schedules which will be detrimental to put it mildly
In the two year interregnum meantime almost no major multinational corporation will embark on any new investment project in the UK
The movement so far in sterling and the domestic stockmarket has been pretty muted
There is still plenty of time to move investments out of the UK
I am not particularly sure this window will be open for long
Perhaps if TI is so kind he will allow me to share my story as well – and explain why I am so disappointed.
I am deeply sceptical about the EU. As an economist by training, it is clear that there many differing interests in the EU, some of these are malevolent. It is also clear that the interests of the UK and other key people and groups (think Germany et. al.) are clearly dis-aligned. That leaves us two options as I see it: (i) fight for our interests within the group and run the risk of being marginalised; or (ii) leave and run the risk of being ignored. It’s not an easy decision – I was on the fence.
What upsets me is that the vote to leave has been based on intolerance of our fellow man (our neighbours, friends and colleagues) and predicated on lies.
I am a second generation immigrant of Cypriot origin. Many of my family fled their country because of war – they lost their homes, livelihoods and some of their family members. Moving to the UK was a great hope to them – just as it is to many western and eastern europeans. The Cypriots (as well as many other communities, African Indians, Jews, Turks – the list is endless) have become immensely successful. Both financially and culturally. We are a better country because of it.
I am from Great Yarmouth (5th highest leave vote). This is a post-industrial town. Very few immigrants. Old population. No university level jobs. I left to move to London because there would be no jobs for me. The following is why.
My father joined the second largest employer (manufacturing) in the town in the 80s. He started as lowly book-keeper. By the end of the 90s he had become the MD of the plant (most of the other managers had also worked up from shop floor). Over time things became very difficult for the plant. Mainly, local labour was expensive and unreliable. The same plant in Germany was twice as productive. Gradually, foreign labour became more common place – like most of the agricultural industry – locals just didn’t want to work the jobs and when they did, they did a poor level of work. This caused great resentment in the company. Following a great deal of internal politics (including the parent company refusing to invest further in a ‘dying plant’) my father and most of the management left. Less than 5 years later the plant shut and 100s lost their jobs. This wasn’t a one off – the same happened at all the major employers in the town.
Great Yarmouth is now a post-productive town. The industry is gone. The people are either retired or unable or unwilling to work. They have been let down by the government who have consistently since the 70s (and the death of the North Sea) refused to invest in the town. In contrast, the EU has given hundreds of millions to the local area to develop, in particularly the tourism industry, in the town.
The vote to leave is a vote against the ‘establishment’. This is a town that has been economically ruined over the last 50 years. But the people have been misled, rather than seeing the real problem – the malevolence of ‘Westminster’ against rebuilding our post-industrial towns – people have attached this to the (almost non-existent) immigrants and the EU. The immigrants (from eastern Europe but earlier from Portugal) are the ones that have kept our agricultural industry alive. The EU has kept our tourism and North Sea Oil/Gas industries alive. Make no mistake, the vote has been based on the lies and misinformation spread by people such as Boris Johnson and Rupert Murdoch. These individuals do not care for the well-being of Great Yarmouth (replace with Wales/Cornwall/NE/NW etc.) – they didn’t care 10/20/30 years ago, they don’t care now.
So what dis-heartens me most is this vote has almost been to spite the most successful elements of our country. Namely, the wild-success of London built on the endeavours of people such as the numerous commentators. People from all walks of life with one goal – to better themselves and their society. It has also been to spite immigrants (such as my family) who have contributed so much to this country – both economically and in the tolerant and vibrant culture that we have helped to build. I can understand the bitterness that people in my home town feel – but nobody wins when envy and resentment overrides reasoned and rational analysis.
To come back full circle, I could have accepted a win for leave if it had come down to reasoned and rational analysis. The IN / OUT question was a very difficult one – with a lot of unknowns. But the answer we got was not reached from the public weighing up this difficult question. It was from the siren call of manipulative compulsive liars. We can blame those liars as much as we like, but individuals must be responsible for the choices they make. I fear they will be.
An enjoyable read for the most part.
Maybe its the quality of reader here, but its heartening to see people like e.g. Richard, whose view is “OK, not the result I personally would have wanted, but I want to understand why so many people did vote leave, and I’m not going to fall into the trap of automatically smearing them as racists / bigots / xenophones etc”.
If only both sides could show such maturity.
Some have alluded to it already, but fundamentally, Remain’s problem was twofold:-
(a) all stick, no carrot (as someone said above, Leave offered hope, and hope sells), and
(b) far too much personal attacks (people can see this happening, they are not stupid, and this turns a lot of people off politics).
To all those who thought that we’d be better off “staying in and reforming it from within”, please look at Mr. Juncker’s comments on Wednesday evening I think it was, where he basically said
“There’s no more reform, even if you vote to remain”.
Intransigence by a well off bureaucrat does not play well with those who feel disenfrancised.
He’s not from my side of the political spectrum, but Mr. Benn sums it up quite neatly:-
“1. What power have you got?
2. Where did you get it from?
3. In whose interests do you exercise it?
4. To whom are you accountable?
5. And how can we get rid of you?
If you cannot get rid of the people who govern you, you do not live in a democratic system.”
The EU’s problem is that the perception, rightly or wrongly, is that it’s officers only cared about 1, and either didn’t think about or didn’t care about 2 – 5.
Final thought: the EU’s democractic deficit.
Let’s imagine a group of countries want to trade more easily with each other. They started a free trade area. Then, they realised that if you want a free trade area, it makes sense to have common rules and standards. Common rules and standards need someone to administer and enforce them. The administrators / enforcers need power to administer and enforce. The free trade group was doing well and more countries wanted to join it. Unfortunately, the club was getting a bit unwieldy now. Too many members, and too much bickering. So, they had to gradually start dispensing with democracy as otherwise, nothing would get done.
Unfortunately, by the time things had got to that stage, you had a group of people at the top who were simply concerned with preserving their own position and a functionary class who did well out of administering the system.
The road to hell is paved with good intentions…
@Elef, I share your concern that Leave won by misleading the electorate, particularly the disadvantaged. It promised to cut immigration of low-skilled East Europeans and to contribute an extra £350m a week to the NHS. On Friday, Daniel Hannan said the former wouldn’t happen and Nigel Farage admitted the latter was a mistake. Today, Iain Duncan Smith described Leave’s pledges as ‘not promises but a range of possibilities’ and Philip Hammond, who is likely to play a major role in EU negotiations, confessed that we’ll have to choose between the single market and controlling freedom of movement. Naturally, being a Tory aligned with capital rather than labour, he favours the latter.
None of them expressed any of these concerns during the campaign. Less than three days after the poll closed, the principal reason why many people supported Leave has been snatched away from them without consultation. And Westminster politicians wonder why people don’t bother voting and hold their elected representatives in contempt…
I’m well educated, socially liberal and financially comfortable. I’m a strong believer in capitalism. I’m also one of those who voted for Brexit. How does this add up? My reasoning is that I care about the people at the bottom of society who have been disenfranchised by post-democracy crony-capitalist globalism. The European Union is an outrage to democracy. EU laws are made in committee rooms of un-elected persons and these laws cannot be repealed by the so called European Parliament. This is unacceptable to me. I voted for Brexit on the principle that the UK should be a self-governing democracy. I also happen to believe that Brexit will be good for the UK economy in the long term because it frees us from costly red tape and trade barriers with the world outside Europe. The EU is a failing enterprise that needed to be shaken up if not broken up for the benefit of the UK and indeed the rest of Europe.
TI Thank you for sharing. I’ve treated your post as therapy to try to deal with the anger, anguish and disbelief at this stupid decision. A decision, I believe, which is largely based on ignorance and sheer prejudice. I am new to thinking about money in a more sophisticated way and have learned a lot from this site. I visit often, but this time just had to comment.
@Cathy, I think your views are spot on. BoJo has been blatantly careerist and no doubt thought he’d been very clever until the result. One fear is that there will be no one, with the possible exception of Theresa May, with anything like sufficient gravitas and negotiating ability to steer us though. We have almost non-existent opposition with Labour leadership. Corbyn going to fight for his job apparently, even though he couldn’t be bothered to fight for the country.
@agranny – really?? I would have assumed your post was a spoof had I not heard the same ‘protest’ argument in real life today. If you want to protest, write a letter, vote MRLP in a GE or join a demo rather than irrevocably changing the course of history FFS. ‘Sorry’? so will future generations be.
@Claudia – Well said.
@Paul EU laws are proposed by the commission (which is unelected — but is appointed by the heads of state of the member countries). But they have to be passed by both the Council of Ministers (portfolio ministers of each member country — mostly elected in their own countries) and the European Parliament (chamber of elected MEPs). Either can block it. It’s remarkably similar to most legislative processes.
If you’d like to pursue the “undemocratic” argument, then a better approach is that Britain loses a lot of these votes (all democracies have losers) and so you might argue that it’s “not the right club for us”, or you can go down the sovereignty route where you say that only people in Britain can vote on British matters, rather than the peoples of Europe being able to vote on European matters. (Although that does leave problems with the Scots, and occasionally Londoners).
@Mathmo. I think the crucial democratic deficit in the EU is that whilst the EU parliament and council of ministers can block new laws they cannot repeal existing laws, correct? I’m not an expert on EU lawmaking but it is my understanding that only the unelected commission can repeal laws. If so then that smacks of a dictatorship to me.
Regardless, my decision for Brexit was also about having a nimble low regulation UK economy outside the EU.
@Paul – The Commission typically proposes legislation but the European Parliament — the chamber of elected representatives has the both the power to ask it to initiate legislation (including that which would superced or repeal other acts) and it also has the power to dismiss the entire Commission. By the people, for the people etc etc.
Again, your line of argument here is more that the bloc system within parliament makes it less effective (than say our own) so the Commission is allowed to run unchecked and the political hue of the elected parliament does not determine the hue of the leadership (which is effectively the European Council). You might look to the US and note that congress does not share the same hue as the President and note that perhaps we should have a directly elected EU President. Although the creation of a federal state that comes along with that election is usually something that’s not supported by sceptics.
A better argument still might be that these people are just rubbish at their jobs. Juncker’s not upto the job, according to Cameron in 2014, his qualifications being running a country the size of a postage stamp, and the MEPs are the scrap heap of European Politics. Anyone good is off running their own country. Not so much an argument about the over-bearing state so much as a lament, but possibly a good reason to either be further in or further out.
Elef,
There’s a fundamental imbalance in your stance. You say you are deeply skeptical of the EU and sat on the fence before deciding to remain. You then go on to say:
“I could have accepted a win for leave if it had come down to reasoned and rational analysis”
Just because most of the debate wasn’t reasoned and rational doesn’t mean that those who landed on the other side of the fence didn’t apply reasoned and rational thought process.
My only regret is that I shared a vote with racists.
I know quite a few UK-based Europeans, mainly working in the Thames valley corridor, about half of whom are Poles. They are all saddened but not overly surprised by the xenophobia, they know the range of attitudes of the ‘genuine, normal people of this country’ who they deal with every day, so are aware they are scapegoated by many for all the ills of society.
Those most settled, and/or with children who are now effectively of hybrid culture are most disturbed because their lives will be upended. The Poles aren’t too bothered because they can now work in Germany which is crying out for excellent skills, will pay much better and they would then be right next door to their families at home.
Europeans and even Brits not in possession of a snowy complexion, as clearly depicted in Farage’s unending rivers of immigrants poster, are also nervous about their future. History has shown that once the bigots smell blood, removing one set of scapegoats only shifts the searchlights to the next. The cruellest blow will fall on the children of hybrid unions who will increasingly belong neither here nor ‘back to where they came from’, even if they were actually even born here. (due to the enlightenment of recent times there are millions of people now in this category)
Because we quickly take things for granted, often you don’t know how much you valued something until you lose it. The subtler benefits of Europe will now be clearer, in a union of many parts for example, minorities are safer because it’s a given that not everyone is the same.
As for the UK, if the Europeans are driven out or leave, the normal, decent people of this country will then be able to fully concentrate their grievances and intolerance on each other. It is polarising society as never before along US lines and bad-feeling is easy to start, while very hard to heal. Since when did we have politicians executed in public for exercising their freedom of speech here? Who wants to live in a country like that? This civilisation has stumbled badly and we all need hope now.
@Paul — I accept and respect your arguments about sovereignty and democracy. But (and I know I am repeating myself):
This is the tragic aspect of this result (beyond the even more obvious tragedy of rocket booster for racism, which I understand a great many Leave voters want nothing to do with, but which is the reality.)
Poor, disenfranchised communities have en masse voted for an EU Referendum that has come about after 30 years of agitation among the most right-wing, economically liberal elements of the Conservative party (and outside it their fellow travelers who moved further to the right with UKIP).
These people want to get out of the EU for a variety of reasons, of which sovereignty and concerns about mission creep at the EU are by far the best ones.
But they also want to the ability to remove red tape and regulation (i.e. in many cases worker’s rights and environmental protections) and they want the freedom to trade freely, globally, without being held back by the inertia, laws, and left-wing tilt of Brussels.
i.e. They are very much for exactly what you and some in these communities have voted against.
See for just one example further up this comment thread the article about EU funding into Ebbw Vale in Wales. Does anyone really believe that in a Government led by the idealogy of the free market right-wingers like John Redwood the first order of business is to redirect even *more* money to such places?
The first order of business will be to scrap all that, and to try to let the market do its job. (i.e. Thatcherism).
Now for my part I have mixed feelings about that; I am a self-described capitalist, but one that comes to the view that checks, balances, intervention and safety nets are required because human beings are involved.
But these people — and the direction of travel Leavers have voted for — almost make me look like Jeremy Corbyn by comparison.
The one “win” you may get is that immigration — which is not really a factor in many of these Northern and Welsh and Cornish towns at all, anyway — may go down, and the lowest rung on the ladder may see some steadying in their wages (though as Claudia said earlier, we already have a minimum wage (which the Tory eurosceptics would scrap in a heartbeat…) so I wouldn’t hold your breath.
The ‘benefit’ of that will likely be much diminished by a fall in GDP and tax receipts for the foreseeable future though, as well as higher inflation from a weaker pound and so on.
Now, there’s Brexit scenarios in which this doesn’t happen. But those are scenarios where you don’t actually get what these Leavers seem to have been asking for. In that case it was all a big drama where only the racists will walk away with any sort of victory because they will claim (/believe) many millions of British actually agree with them.
As I’ve said before, I understand the feeling of kicking out / standing up for this slice of community. But that’s not in practice what this Leave vote does, IMHO.
@The Investor, I share your concern that Brexit is actually a campaign by the right of the Tory party, and fellow travellers, whose underlying concern is actually that the EU imposes too many restrictions on business. It is a credible scenario that they’ve hoodwinked the left-behind provincial working class into supporting their project because of legitimate concerns about the effects of immigration on the availability and attractiveness of less skilled jobs.
FWIW, while I note your self-description as a capitalist, I think we’re now moving into a world in which many of us, myself included, feel increasingly uncomfortable with that term. I’m a free marketeer, not a capitalist. For me, unfettered capitalism means a rule-free environment in which the firms and individuals that gain an initial advantage through luck are permitted to entrench and build on it, for instance by anti-competitive measures by a firm or buying advantage for an individual’s offspring.
As an investor, I don’t like that. I’d rather than markets operated freely, which paradoxically means they have to be regulated to ensure that all participants can engage in genuine competition. Same goes for individuals. Those provincial, post-industrial kids who didn’t follow you down to London or me off my Croydon council estate may have lacked certain intangible advantages that we possessed. I would like the state to plug the gap for the next generation. Does that make me a socialist? Perhaps, though I’d rather think of myself as a ‘red Tory’ who yearns for a more participatory economy.
A good read but I take issue with your implication that everyone in London voted Remain and everyone outside of London voted Leave. I live in Devon and I voted Remain. Yes, I was in a minority but there were still quite a few of us. In all of London’s boroughs 40.1% voted to Leave, quite a sizeable chunk. It is this kind of sweeping generalisation (London = right, Everywhere else = wrong) that actually increases resentment towards The City and the “Political Elite”. Not everyone in “the provinces” is bright enough to see passed this resentment.
As it turns out, it now looks like those people that voted Leave to stop immigration will be very disappointed.
Interestingly, on the immigration angle, an acquaintance who works as an immigration lawyer within Whitehall told me that the Attorney General came in on Friday and told them that no contingency plans had been made for this outcome.
I live in Cambridge, a small City about as University educated as you can get and which voted 73.8% Remain. I grew up in the provinces but have lived here for nearly 20 years. I am under 40 and a graduate. I have never voted Conservative.
I decided to vote Leave for the simple reasons that I do not think the UK should be part of the pan-European project in its current undemocratic form, and because I think immigration levels have got out of the control to the point that it’s doing more harm than good. It has not affected my job prospects but I have been forced to move house for example because there aren’t enough school places in Cambridge now.
I don’t believe I am stupid or racist, but I am keeping away from social media because nearly all of my friends disagree with me, and they seem more interested into trying to overturn the result or explain it in a multitude of patronising ways than in understanding why it happened and how their attitudes annoy people.
I am surprised at you, “The Investor”, for being so certain that you are right about this. I noticed you said you will change your mind if things don’t turn out as badly as you expect in 5 years, but frankly you seem so sure that the decision is “wrong” and of what will happen you’re actually agreeing with Neverland for a change!
For what it’s worth, I think what we will see now is a fudge that means we end up with just the kind of “EU Lite” that I would have been prepared to vote for in the first place. That won’t please the hardcore Eurosceptics but it will re-take the political centre ground. I wouldn’t rule out another referendum as a rubber stamping exercise for the better deal. If that led to a 2:1 majority in favour then it would go a long way to legitimising both a watered down version of what people voted for, and the new government post Cameron. Such a clear mandate would also hopefully unify the country and heal some wounds.
@Dragon – well summarised.
I voted Leave. I’m not racist, and I clearly see a difference between Europe/Europeans and the EU. Like the former, don’t like the latter.
I don’t like being called a thick, uneducated northern working class racist, by people who don’t share my views. Nor do I like the riposte that Remain are just a load of gilded trust-fund London-centric bankers out to continue to feather their own nest.
It was a nearly 50:50 split – cheap insults and crass characterisations benefit no-one.
Many Leavers are genuinely concerned about democracy – having a parliament and judiciary that cannot be over-ruled willy-nilly by distant unelected bodies.
Many Leavers are concerned that the EU will never compromise / accommodate views that diverge from “ever greater union”. Juncker was one of Leave’s greatest, although unintended, assets.
Many Leavers are concerned that the EU will continue on its sorry decline. If I thought the EU could be reformed or would get “better” (as I would define it) then I would have voted Remain. But in 10 or 20 years I simply see the EU as being in so much trouble that I want to get out while I can.
Many Leavers were disappointed by Project Fear (especially when it was so overblown). But it was Project Condescension that really got my goat.
A lot of the press (and some on here) have basically said “we’re clever Londoners, so do as you’re told”. That was never going to garner votes.
The 52% who voted Leave are not wrong. The 48% who vote Remain are not privy to some secret knowledge. It’s a judgement call, and everyone will base their vote on their circumstances and their beliefs.
Many Leavers are worried about the short and medium-term financial impact on them and the country. But they believe in a better long-term future, and so voted for that. They may be wrong. But so might you.
@Elaf, like yourself I am an economist and your post has motivated me to respond with some fairly random thoughts.
I agree that this is a slap in the face to those that benefit most from globalisation and there exists a powerful latent racism. But it’s only a slap.
If I could sum up the situation at a macro level I would say that since the ’70’s our economy has been managed in a way that best suits those likely to benefit most from globalisation. There has been an event and after the dust settles the economy will be managed in a way that best suits those likely to benefit most from globalisation. Or to put it another way the interests of capital over labour before the event the interests of capital over labour after the event.
I can’t think of any industrialised country with a different economic model at the moment.
I agree with your sentiment that the leave campaign will not deliver anything to those globalisation losers. Plus ca change…. And all that.
Over the years I have benefited from this situation and that’s why I voted remain, but I accept that a lot of people haven’t.
@Paul, I am not qualified to comment on your view of the democracy of the EU but I would say that;
1. The UK is already one of the least bureaucratic industrialised nations – room for some improvement, but can’t see it being a game changer.
2. The notion that the UK could negotiate in aggregate more advantageous trade terms than the EU – beggars belief.
To start, I voted leave based on classical liberal lines and great optimism in the UK. I moved to the UK in 2001 from Australia as backpacker and took out British nationality as soon as I could in 2010. London is my home, although for employment purposes I’m currently in Madrid. As such I’m certainly in for criticism in view of the apparent conflict between my vote and my circumstances. But we’re all in the world essentially on our own outside of family and a relatively small group of friends who might have our back, and we’ve got to do what we’ve got to do. My lack of prospects in the UK are more associated with global movements in resource pricing and I’m pretty sure Brexit is unlikely to motivate that sector, even if in the short term the exchange rate makes the UK more competitive in engineering services. EU citizenship has given me some short term relief, but medium term I’m concerned for my industry. Nevertheless, even as a Leave voter I am pro-immigration and pro-free trade, that’s just the classical liberal in me I suppose.
There are a lot of good arguments that people prefer economic freedom over personal freedoms and democracy, and I don’t discount them, the success of Singapore and others is testament to the human desire for economic security over more esoteric rights, Maslow’s Hierarchy of Needs is starting point in understanding this. On the surface it would appear those voting in downtrodden areas are shooting themselves in the foot. But I’m not sure I’d describe a factory worker whose livelihood is underpinned by subsidies and largesse of the EU as a winner of UK membership of the EU. They may have employment, they may be raising families and having holidays on the Costa del Sol, but they’ve made lifelong commitments to industries that aren’t competitive without protection, without subsidy, and they are very less likely to take advantage of freedom of movement within the EU in the event that the winds of subsidy, technological innovation or innumerable potential changes take their jobs away from them.
Ahh, but what about the Poles, the Bulgarians, the Slovaks, they picked themselves up and relocated for work, why wouldn’t the British working classes? Well, they do. Except they move to the US, Australia, Canada, New Zealand, where shared language, culture and history make them feel less alien and ease the transition to life as an immigrant. Maybe the anglosphere is simply more open to newcomers, we certainly have less barriers to employment for immigrants, which might explain why hundreds of immigrants bypass the EU miracle to sit in camps in Calais to get to the UK rather than seek work in Paris or Berlin. Freedom of movement works really well for the British middle class looking for a gap year in Italy or a holiday home in France, a tradesmen to build their loft extension, a waitress to take their order or barman to pour them a pint, but not so well for the working class.
Don’t get me wrong, the Poles and the Bulgarians and Slovaks benefit the UK immensely, but these are the same fraction of the working classes with the same moxie as the small proportion of British who move to Australia have. Immigrants are a self-selecting group of risk takers with more motivation and self-belief than the average individual. The myth of the doll-bludging migrant is largely that, a myth, proven by the highly visible exceptions that the red tops love to point out.
But the indigenous British working classes are failed by domestic governance, which present them with the option to look for support from the state rather than live by their own hard work. I don’t blame them. Life on welfare doesn’t sound very life affirming or rewarding to me, and certainly hurts the prospects of those trapped and their future generations. But the marginal cost of escaping is so high. Working brings you in to the tax system, it takes your housing benefit, it brings new costs like commuting and work clothes, and it’s scary.
The welfare state in Britain has created a client of the state population, reliant on welfare for their income, their housing, and a leadership within the main political parties which are unable to offer an alternative except more of the same and in the EU an unelected executive and legislature that is hell bent on defending the status quo and drawing more power to the centre.
The UK gets the motivated, hardworking labour from the East and South, the middle classes get the benefit of their labour, the government their taxes, and the main political parties get to sit on their hands while working class towns crumble under the weight of indigenous unemployment. Freedom of movement and the EU do not have the solution for these people and undermine any attempt to change direction. The Little Englanders and UKIPers might have voted Leave as a cry against the establishment and would mock me for my classical liberal ideas, but it is for anyone who believes that the state’s existence is underpinned by working for the least able to raise their own prospects to make sure the UK builds a better future for all of Britain.
Free of the EU, of the scapegoat for all out problems, the regulations, the protectionism, the unaccountability, the UK has a chance to reshape the direction of our nation and remove barriers to opportunity for all and not just for those who are most able.
ps. Even farmers who have a direct relationship with the EU through CAP have voiced significant concerns with the EU and the regulation placed on their sector to normalize trade within the Common Market. Farmers who voted Leave did so knowing that the Tories aren’t committed to subsidising their way of life and Labour aren’t interested in their Conservative voting constituencies as much as the French are committed to protecting their farmers. There was no abstract relationship between their livelihoods and the EU, they sucked directly on the EU teat and benefited from cheap European labour to bring in their crops. And yet many voted Leave, some pre-polling suggested at a rate greater than the overall vote.
Rant over!
I really doubt the interests of the disenfranchised are best served by the Brexit side of the Tory party, as they need a government committed to wealth redistribution. What is needed is a general election, not a new referendum, where a range of parties offer their team, and manifesto, as a detailed as to where we go from here. I’ll be voting on the primary consideration on who I think can best keep us in Europe. But with both major parties in disarray, and the LDs invisible, I’ve no idea who that would be.
My favourite suggestion, persuading the SNP to become a national party and put forward candidates south of the border….
@ John B
I suspect that all the major (and, indeed, minor) parties will have pro-EU manifestos. Other than UKIP, of course.
The referendum was a single issue vote, whereas a general election is not.
However for none of the previous parties of government to support Brexit would be a rather odd form of democracy. But we live in strange times…
“I avoided Brexit articles in the run-up to the vote, which I now slightly regret.” – I felt exactly the same way TI!
I was basically completely bored of the whole thing and also just assumed most people would do the sane thing and vote remain. I wish I’d done more now although it wouldn’t have made a difference (apart from maybe me feeling I’d ‘done my bit’), I think on aggregate the quiet remain voters all felt the same way and so it maybe came across as apathetic?
Anyway good rant, much more in depth and eloquent than my one, and I hope you felt better after all that 🙂
I voted Remain because I wanted more red tape and less sovereignty.
Why?
Because I’m old enough to remember what it was like when we had none of the former and all of the latter.
Nothing was regulated adequately; industries, companies, agencies of the state and the state themselves were allowed to pollute, exploit, neglect and abuse us; our health, safety, rights and the environment around us.
We had the cherished ability to boot governments out for some one to change this and never did.
That was a really good read and it’s refreshing to hear someone actually discuss honestly their feelings of people they know who voted for the Brexit whilst also addressing some of the failings in the EU as well.
I’ve lost count of the articles I’ve read which just ram their strong opinion down your throat.
Being 100% in cash, I’ve had very few tools available for dealing with this outcome. In the last week I’ve moved 65% of savings into USD at rates between 1.48 (on 22 June) to 1.31 (today). The only only actionable question on my mind now is how low that rate can go. 1.2? 1.0?
I wouldn’t bet on a snap election being called let alone a new referendum so I wish they’d just invoke A50 and get on with it, to provide some certainty at least of timeframe. But we don’t even get that step until October at the earliest, then 2 more years as a lame duck economy.
Our own special little financial crisis, as if the last one wasn’t enough, and entirely self-inflicted. Simply unbelievable.
I do wonder, now that we investors have lost a lot of money, whether it’s better to SPEND our money now to live it up or keep investing and ask “what’s the point of it all?”
During downturns, I’m always thinking to myself, “I should just bought the damn Range Rover Sport HSE!” At least I would have had something fun to drive around instead of losing it in this market. 🙂
@TEA (all the way back at #12) I just succumbed to the lure of checking the old portfolio, well I don’t feel too guilty – I did manage to hold out a few days since Armageddon and it is almost the end of the month, i.e. when I normally update the spreadsheet.
What do I see? A few % up on the month. Chimes with your observation TEA
On the investment side, I think TI has been doing a whole lot of sweating for not much getting.
First time post. Great writing as always. I don’t normally post as I usually have nothing of value to add. But on this I will – even if there is nothing of value.
I support the positives of mixing with our European friends, the open borders, and liberal tolerant legislation.
I identify with enjoying the variety and cultural mix of London and London was also my home.
However unlike you, I left London and the UK, to live, work, and raise a family in Europe and experienced living in both Western and Eastern Europe.
If I were still living in London I think I would have been a firm Remainer.
But based on my experiences over the last decade I think the UK made the right decision to Leave.
The EU is, as you said, a capitalist project. But even more the EU has become a proxy for NATO. When the US says the UK goes to the back of the queue, because it wants to negotiate trade deals with a block rather than individually it also means is that it wants a system that allows it to garner support of US foreign policy en masse too.
You ask why there were not greater restrictions on the poorer Eastern European countries that joined the EU? Ask yourself who benefits. The US wanted the EU to expand East so that NATO can too.
The US can be a power for good, but there should be some checks and balances.
I have no answer as to whether an EU without the UK, or even the eventual dissolution of the EU may lead to Europe having a more balanced relationship with the US. But if the EU were just about free trade and Europeans living in harmony, I’d be at the front of the queue to support it. But at the moment it isn’t, and so I’m not.
The FTSE 250 has fallen 13%, which is interesting as I was planning to diversify away from the FTSE 100 into it. Do people think it is now good value?
http://www.telegraph.co.uk/business/2016/06/27/why-we-should-be-looking-at-the-ftse-250-and-not-the-ftse-100-to/
@John B, I think it’s difficult to assess whether any stocks are good or poor value, given the economic and political uncertainty.
However, on balance, I suspect that 10 years from now we’ll still be in the single market and will have sufficient freedom of labour to avoid firms’ profitability being heavily eroded by an inflationary wage rate spiral.
Therefore even if you buy today and see a subsequent paper loss in the coming weeks or even months, multiple years down the line you should do OK. This is particularly true of the FTSE250 or 350, both of which outperform the FTSE100 over the medium term.
I’m a fan of investment trusts, and like smaller stocks. Today I added to my positions in Henderson Smaller Companies and its Blackrock namesake, both at 12-month lows. These two trusts have delivered annual increases in dividend payouts of around 20 percent per annum in recent years and seem to me to be well managed and suitably diversified.
“There is no economic argument for exiting the European Union. None.”
I’m not sure how you can say this. There are of course economic arguments against membership of the EU, made by credible people, whether one agrees with them or not.
For example, by Patrick Minford of Cardiff Business School (PDF: http://www.patrickminford.net/europe/chap1.pdf). Part of that particular argument, if you don’t want to read the whole thing, is the point that protectionist import tariffs applied by the EU on agriculture and manufactured goods keep prices of those things artificially high, and are very costly to the UK, since it is much more of a service economy.
@freemantle — That was a really interesting viewpoint, thanks for sharing in some depth. I do find some contradictions in it (which you’ve largely identified yourself) and you can see what I’d say to any of the bits and pieces in my various responses above, but anyway, I found it a refreshing perspective.
@Shewi — I love your comment, I think it’s my favourite of the thread.
@David Simms – Yes, I agree that’s a bit of rhetorical excess perhaps. What I mean and believe is that when you net out the huge upside from being a member of the EU and any small frictions caused by membership (such as tariffs or our net contribution to the budget) then I don’t believe you’re ever going to come up a positive figure, and most (not all) of what I’ve said suggests the same. This is especially true if you take into account the boost to our economy from inward migration. Only dodging the EU implosion that some Brexiteers foresee at some point in the future would be an economic argument for me (obviously I don’t subscribe to it) but then why not have waited until that looked likely, rather than while we were all from an economic benefit benefiting mightily from membership?
All IMHO of course. I obviously don’t have the monopoly on truth. Like anyone writing an article I obviously do give me side of it. 🙂 Time will tell.
Sorry, I meant everything I said about @knowles to go to @freemantle! I’ve edited it now.
I’ve spent three days moderating 130+ comments on this thread and trying to digest them all and delete as few as possible; going a bit cross-eyed. 🙂
(Thanks to you to @knowles for sharing your view. And everyone else who has put forward the longer thoughtful comments.)
I don’t expect financial blogs to bring a tear to my eye. All the best and good luck.
Can I clarify one thing? And sorry for my ignorance:
The people who voted to LEAVE all knew the repercussions of a 20%+ drop in investment portfolios, a worse recession, less jobs, and internal upheaval right? If so, is it safe to say there can’t possibly be a 2nd referendum to vote the UK back in and say “oopsie”?
I’m just trying to think from an investors point of view. If there is no chance of reparations, then I will NOT be invested new capital into the market, but just hoarding all cash for the next 1-3 years. But if there is a chance, than I will be legging back in.
What say you fellow investors?
Sam
@The Investor
Thanks for the follow up. Yes, I accept that Johnson/Gove/Hannan and the rest of the Tory Leave campaign do not necessarily have the interests of the working class at heart. That’s a discussion about one future government of post-Brexit UK. Now that we (might) have just regained democratic self government citizens have the ability to elect a British government with a very different agenda to Tory Leave in future elections. Being in the EU means that things such as no state-aid and free movement of goods and labour are non-negotiable so cannot be overturned by any electorate. As a capitalist I benefit from this neo-liberalism but I voted Leave for the British people’s right to elect a government with a different policy. To me it is this issue of democratic principle that was at stake.
@FS Finding it hard to generalise about the leavers’ motivations. It is complex. Expert opinion on consequences of exit were dismissed as groundless fearmongering by vested interests. People without pensions or portfolios don’t care what the sharemarket does and many felt the jobs situation could hardly get worse. I think there’s practically zero chance of a new referendum, unless one is held in a few years time to ratify whatever agreements have been hammered out. There is a slightly higher chance of a new election before 2020. I wouldn’t bet on either event, personally.
@FS — I can see the people we might call the “right-minded” Leavers were in a pretty difficult situation. (i.e. I am excluding for example those for whom it was a perhaps understandably motivated by from my view a very misdirected protest vote, those people who couldn’t understand what they were being asked (e.g. those we read about in the media who didn’t know they benefited from EU redistribution) and also excluding the extreme xenophobes and racists, as opposed to those who just don’t want things to change in their country/culture, or certainly not too quickly).
If you’ve wanted a chance to get the UK out of Europe for reasons of sovereignty, or because you think another 2-3 million net arrivals over the next decade is just too much to take, or you truly believe that the EU is a misguided economic project that will end spectacularly badly (either economically or politically) then what do you do?
Depending on your persuasion, you might not like certain outcomes or realities of having to vote Leave, but you’ve waited for decades for your chance to do so and it might not come again.
e.g. You might have preferred a tighter Referendum question spelling out exactly what the alternative to being in the EU was (rather than just the uncertainty in the aftermath that we’re seeing). I think many Leave voters clearly would have preferred not to find themselves lumped into an electorate featuring some of the worst of the UK political spectrum (i.e. You want full legislative power for every law to reside in the UK parliament for whatever reason, but you dislike racists as much as any Remain voter).
Do you vote Leave or not to Leave, then?
In some ways the economic hit is the least of it — particularly if it’s just a short-term hit. If I really believed in the sovereignty concerns, I suppose I would take a recession for them.
When I think about this sorry Referendum and the reasons I am angry about it, this does all factor into the picture, too.
I am saddened that we’ve reached a point, for whatever reason, where a good chunk of the electorate reached a point where they might have felt damned if they did and damned if they didn’t. And that they had to take part in a Referendum where there was no clear definition as to what the alternative would be — perhaps because the person who called the Referendum didn’t think we’d ever vote Leave, perhaps because he thought it would help put people off voting Leave, or perhaps just because he was doing it for internal party political firefighting reasons, and didn’t care.
Finally, I am really saddened — and angry — that the decision to have this very public plebiscite was taken *AFTER* a huge number of EU migrants had made their way here, and now feel anxious for their futures or even fearful about what the British people really think of them.
This all adds to my feeling that it’s a farce or a tragedy, depending on your point of view.
Honestly, the stock market falls are the least of it for me.
@TI arguably the timing of this referendum was terrible. Maybe not when DC first announced it, but in the last 6 months the markets have been on the slide and more austerity. We have also had nothing but the threat of terrorists hidden amongst ‘hordes’ of migrant/refugees (plus actual attacks). I know a few leave people who voted primarily because of this.
@FS Few politicians now will say brexit won’t happen. It would cause them adverse publicity when there is no clear route to stop it. But as no-one wants to press the 50 button, as time goes on the mood may change, and the opportunity for an overturning public vote grows. Its likely to be an general election though, as that allows a spectrum of choices. It depends whether a new Tory leader can stop internal dissent, and whether they feel confident enough about Labour disarray to go for a new mandate. I think the odds of an election are good, and that could lead to a reversal. And even if not, the range of final deals we get is economically very wide, from complete shut-out to same terms, just more cash paid to get them.
If you are out the the market for 3 years you will make 4% return on cash. If you are in you capital value could swing widely, but you’d get 10%+ in dividends.
@Financial Samurai
Why don’t you invest in offshore markets?
@Max Foreign markets have similar risk and return profiles to domestic, but with added foreign exchange risk. Investing with the pound at a 31 year low, reversion to the mean suggests you will be losing out if the pound recovers. It could fall further, but the down range is likely to be smaller than the up range.
@John B I really can’t see them holding a general election. I mean who would people vote for? In theory you could see 48% vote Lib Dem (who are saying they will put us straight back into Europe) and 52% vote UKIP (though how FPTP would alter the landscape….). Of course that is unlikely (and there may be a lot of buyers remorse amongst leave) but it would result in my view in an even more fractured parlement than we have now (where most MPs are pro-EU) and no doubt some powerless coalition trying to decide what to do. At least this parlement has a clear mandate, a party with a majority and is pro-EU.
@Financial Samurai
Would this also apply if you invested in funds purchased in GBP like Fidelity World Index etc?
@Richard “At least this parlement has a clear mandate, a party with a majority and is pro-EU.”
The problem is of course, which mandate, the EU-mixed one from 2015, or the the 52:48 anti-EU now.
If I were a Remain Tory, would I feel I had a duty to work towards a goal I don’t believe in? This is the question I asked my MP yesterday.
It is an interesting dilemma. I would say the mixed one (which even the referendum shows). Which requires us to change our relationship with Europe but trying to keep all the best elements. Not easy I agree.
I mean they can work to find the middle ground or call a general election and risk yet more instability, hung parlement, economic turmoil and further encrouchement of right wing party’s.
@The Investor, I think your post of 6.52am this morning sums up my current thoughts and feelings better than anything else I’ve read on the topic, here or elsewhere.
We’re all likely to pay a high price for this decision. From investors nursing falls in portfolio values and depressed returns over the medium run to the left-behinds who’ll see no reduction in immigration as we favour single market access over controls on freedom of movement, the golf club Little Englanders who’ll have to watch the UK, probably as an EAA member, following EU rules but no longer able to influence or veto them and, as you point out, Europeans who’ve made lives in the UK in good faith and now face racism and the prospect of a bleak future.
We’ve all been sold a pup, by opportunist politicians on both sides of the debate, few of whom thought it would ever happen.
How to row back from here? The best I can think of is a referendum to endorse whatever deal is struck. But that requires terms to be nutted out without triggering Article 50. And, so far, the EU says that won’t happen. So Europe, too, is pursuing a policy of mutually assured destruction.
We live in dark times.
What is really good is that the government had the foresight to make preliminary arrangements and preparations for Brexit just in case (in the unlikely event) it happened.
@TI – As with some others, really liked your latest – more balanced, if I may be so bold – post.
My (not too well-balanced, UK heavy) portfolio is down <1% over the past 7 days. I'll delay my suicide for a while yet. (Did I mis-hear or did Nick Robinson really say on BBC R4's Today programme this morning that the "stock market is at levels not seen since the ERM crisis"?)
Many leavers (me being one) would argue that there's no such thing as "EU Redistribution" in the way that most people see it. Whatever the figures (and, yes, £350m/week was naughty) the UK is a net contributor to the EU. Thus the UK can continue to fund every single "EU" project (to farmers, universities, deprived areas, etc) and still have some spare. "Taking back control" simply means that the UK govt can decide whether to continue to use that funding for the purposes that, currently, the EU thinks it should be spent on. Seems fair enough to me.
The 52% of Leavers (as with the 48% of Remainers) are not homogeneous groupings. Given their size there's a huge broad church in there and it's good to remember that.
However I think over the coming weeks and months we'll see a much more balanced debate over the (potential) benefits of leaving the EU and the current (and potential future) disadvantages of the EU. Far too much so far has been relentlessly negative.
@ A Different Richard
“Many leavers (me being one) would argue that there’s no such thing as “EU Redistribution” in the way that most people see it. Whatever the figures (and, yes, £350m/week was naughty) the UK is a net contributor to the EU. Thus the UK can continue to fund every single “EU” project (to farmers, universities, deprived areas, etc) and still have some spare. “Taking back control” simply means that the UK govt can decide whether to continue to use that funding for the purposes that, currently, the EU thinks it should be spent on. Seems fair enough to me.”
That assumes that the same amount of money will be available to the chancellor as he has now. I have heard a small rumour that leaving the EU could affect UK GDP and, if that is true, then there would probably not be this 350m/week (or whatever the real figure) available.
@ADR – I too have noticed a bit of a disconnect between the actual numbers and the medias voice on the subject of tanking currencies and markets.
admittedly early days but it doesn’t look too bad to me. I heard one bbc commentator saying market falls were worse than 2008. It certainly doesn’t look like that from my portfolios perspective. I’ve seen vastly bigger falls in completely nondescript random months over the past decade or so
Pound buys more euro today is than it did for pretty much all of 2013
I thought mervyn kings take was pretty sensible for anyone worried from the economic perspective..
@Burgmeister, I agree that ‘EU funding’ ultimately comes from the UK, since we’re net contributors to the community’s budget. However, it doesn’t follow that leaving means we can allocate all that money, and more, as we see fit.
The error in this argument is that the Leave campaign has made it clear, since the poll, that its top priority is retaining access to the Single Market. The EU in turn has indicated that there will be a cost involved – most likely, roughly what we have been paying to be full members. That’s how it works for EAA members such as Norway, and there would be an outcry from that bloc if we got a different deal.
What this means is that we wouldn’t have the money to spend on other stuff, and we also wouldn’t have the EU subsidies paid for university research, regional development and so much more. It’s likely we will also have to accept freedom of movement across the EU and EAA, only now with no ability to set or veto rules and no power to block new countries (Turkey, Macedonia etc) from gaining that privilege.
But can’t we have the best of both worlds? In the EAA, free movement of peoples etc and also negotiate our own deals with the rest of the world? Of course that relies on us getting better deals with the rest of the world outside of the EU. Does it matter if we can’t sit at the table when they are making their rules we potentially have to abide by to stay in the EAA? How much of our sovernty will we lose by this? These are genuine questions (trying to see potential up sides)
I agree with Richard!
I have no idea how this will pan out over the next 10 or 15 years. There are huge opportunities for the UK out/semi-detached/orbiting/in-at-weekends regarding the EU. (There are also huge opportunities to be seized by a – reformed – EU.)
There are also huge opportunities for the UK to forge better trading terms with the rest of the world.
But, yes, all this is unknown and some people (quite rightly) prefer a not-great present to an unknown future. (I would argue that the EU in 10 to 15 years, had we stayed in, would be just as unknown.)
Guardian commentators are having the vapours. Telegraph business writers much more positive. Everyone has an argument and (most) can be backed up. Given that the establishment, most of the press, the EU leadership, and the bookies called the referendum (and the England Iceland game) wrong, I really take other people’s “certainties” with a pinch of salt.
What I do believe in is that the UK will make a great go of this – the 52% and the 48% will do what an immigrant-rich (and I mean that literally and positively) and entrepreneurial country has always done. Roll up our sleeve and pull together. 100 years ago we were in the middle of a fearful slaughter. Look at the ups and downs of that last century. Today’s travails are/will be seen as nothing.
We’re in Day 3. Ask me again at Christmas.
In the meantime, the negotiations begin, and prominent UK ambassador and Leave campaigner Nigel Farage begins the sensitive discussions:
https://www.youtube.com/watch?v=40ule97jkRA&feature=youtu.be
did juncker give a him a kiss and a cuddle before or after this rallying speech?
@Mark. It looks like you have just taken my quoting of A Different Richard as my own thoughts.
My own thoughts were stated in the post. To reiterate, I think (If most economists are to be believed) there will be less money all around for the chancellor to spend so the formerly EU bound cash will not be able to be redistributed “as we see fit” as it won’t exist.
@Richard “But can’t we have the best of both worlds? In the EAA, free movement of peoples etc and also negotiate our own deals with the rest of the world? Of course that relies on us getting better deals with the rest of the world outside of the EU. ”
It seems unlikely that this would be possible. If you think logically about it, the reason the EU wants a single deal is so that you can’t put things on their market that you have imported cheaper. If the EU has a trade agreemnet with, say, China that imposes 10% tariff on it and the UK goes ahead with a tariff free arrangement with China then the UK can buy stuff 10% cheaper than the EU can. If we also have a free access to the EU we can then resell this cheaper stuff to the rest of the EU at a profit. It offers, in this case, China a tariff free backdoor into the EU. I don’t think the rest of the EU would let that happen, do you?
@Burgmeister, Apologies, yes, I got confused. We’re on the same page re there being less money to spend on all the things the EU currently supports in the UK.
@Rhino/Mark – I don’t disagree that you might be right (at least in the short-term, although your – widely shared – views might be a self-fulfilling prophesy). I disagree with your (and other commentators’) almost-certainty in stating that such a position is “correct”.
Many economists said we should join the Euro. I think with hindsight they were wrong. But we only get to live in one future, so I cannot be sure.
@ Burgmeister
I might be wrong, but I think your example is precisely why goods are declared with country of origin rather than most recent country they passed through.
Buying goods in one market to sell in another at a profit is called trade. Personally I’m for fewer barriers rather than more, but I can see that there are vested interests (including the UK) that would like some advantageous barriers. Let the UK/EU negotiations begin…
The question with many of these things is whether you’re looking for data to support your point of view or whether you are looking to discover the truth.
Pretty sure I could go and find some idiotic Remain voters who regret their vote but no-one is sticking them on TV.
It’s not going to be that bad, but good to work it out of your system.
@David. you may well be right but I’m not really sure how that works?
Is Norway able to negotiate it’s own trade deals with countries outside the EU (specifically on things it has a single-market agreement on)? If Norway can do this then I’m sure it would be OK for the UK to do it. If they can’t then it would be unlikely to be acceptable for the UK.
@A Different Richard – I get your point re:trade but it becomes unacceptable to many countries if you are simply offering a way of by-passing existing trade agreements/tariffs/quotas.
@Burgmeister – My point is that the different vested interests will come together and thrash out (EU / World / Other Subset) trading arrangements, as they have always done. Just as the original 6 (I think) northern European countries did 40 years ago. I – and a lot of other Leavers, I presume – always felt that the EU should be (only) a trading bloc. Quite how we ended up with 27 (and counting) countries, with a European “parliament”, a set of supra-national courts (with jurisdiction over sovereign parliaments), and a potential EU army confuses me mightily. How did that happen?
I see that Czechoslovakia, Austria and Poland are getting rather anti-Juncker. I think we might find that Brexit has pushed other (mainstream) EU parties (in government or not) to take a step back and ask “do we share Juncker’s vision?”. A week is a long time in politics.
I do not share other commentators certainty over the (negative) future of the UK. The UK will make this work. The EU will make this work. Whether Juncker and his ilk will be able to stop/hinder that direction of travel is yet to be seen.
My point – and it’s only that – is (per Yogi Berra) that “it’s very difficult to make predictions, especially about the future”. Politics is anything but a science. Economics is only slightly less so. Put the two together, throw in “the markets / moneymen”, 27 other counties (plus the world), and the somewhat unpredictable will of the people and you get anything but the certainties that some commentators (yes, Guardian, I’m looking at you) spout.
With the push for ever closer union and the desired eventual outcome of a federalised EU superstate, there were always going to be countries that don’t want to be subsumed and would leave the EU. Better to be the country that gets out first, as it was going to happen eventually.
All this doom and gloom is rot, it won’t be as bad as that, and it won’t be heaven on earth either. Chin up, Brits. If hundreds of other countries can manage without being tied to an economic basket case, I’m sure you lot can also!
We don’t need trade agreements to trade, and neither should we bend over backwards to accommodate them. Even if other nations or trading blocs put up barriers to our trade with them, we would be better off operating with unilateral free trade.
If the EU or any other nation wants to restrict its citizens from buying UK goods and services that we’re competitive at, then so be it. They’ll be poorer for it and UK producers will have to alter their behaviour, pursue alternative markets, allocate their capital differently. Traders have no natural right to market access.
As long as the UK doesn’t restrict British subjects from buying foreign goods and services, we’ll become wealthier on the basis that we’ll only buy what is competitively priced. If the other nations want to subsidise their industries, that is direct transfer of wealth from them to us.
Of course it would be best if no one wanted to put up trade barriers like tariffs and protectionist regulatory restrictions.
The banks that have been scaremongering British voters and drawing up Brexit demobilisation plans are the same banks that came looking for handouts from taxpayers 8 years ago and there is little sign that the unholy alliance between government and the finance sector is going to end any time soon. Goldman Sachs et al are masters at pressuring Brussels on regulation that suits them as incumbents, reducing competition, and increases fees for advising governments and industry on how to implement and negotiate regulation. The banking business model is no longer about allocating capital to grease the wheels of industry, but to supply both the grease and the grit, sitting in the middle taking a cut no matter what the deal.
London has been hosting this industry and we’ve been congratulating ourselves on how special we are. Before HSBC start moving to the Continent they might want check on France and Spain’s willingness and capability to bail them out in the event of another crisis, or find out whether their employees are going to enjoy paying European levels of taxation on their fat bonuses.
Let them go and deregulate the UK financial markets. Enable competition for banking and financial services in the UK. Just make sure we don’t facilitate “too big to fail”.
I’ve read a few opinions that the only winners out of Brexit will be the lawyers trying to squeeze the EU directives back into the toothpaste tube, but Remain gives a tick of approval for that other leach on industry and commerce, the modern investment banking behemoth.
@The Investor – Good point about what if you are a recent immigrant in the UK. Might be subject to some hatred from folks who voted to leave. Damn, that’s terrible. I’m a minority in the US, but moved from the not diverse South to San Francisco, where diversity is plentiful. The day to day feeling is night and day.
@John – Thanks for your thoughts. You are probably right about a 4% cash return in 3 years and a 10% potential equities return. I just finished writing a long post about asset allocation today to help us think through things now.
@Max – I do have European and international equity exposure. FEZ, the EuroStoxx 50 index is sadly one of them. I bought some more, and even bought a European bank yesterday. Let’s just hope their dividends aren’t cut too badly.
If a / the future government successfully negotiates trade deals etc, of the nature that you guy’s are hoping for, but simultaneously and entirely separately, commenced systematically abandoning protections and regulations on amongst other things lets say, the environment, for example air pollution, how would you rate Brexit in a final analysis?
It’s not meant as a facetious question. I appreciate that this is an investment blog first and foremost, but I’m genuinely curious, having interest in both subjects.
Well chosen to close comments on your latest post, which by the way is fantastic. Very brave to alienate Barry-the-average-Monevator-reader by using this platform to vent your dissapointment. It would be interesting to see whether there is a structural break in your readership from now on and, geographically, where the losses are suffered.
@Shewi – why should/would it?
But to answer your hypothetical, it would be the UK parliament, voted in by the UK electorate who would decide. Lots of things I’ve liked about previous UK legislation. Lots I didn’t. But, to me, sovereignty is an issue. An important one. Not the be all and end all, though.
I think the environmental lobby is a little too strong/influential. I’d weaken some climate change stuff. But then I’d cancel HS2 and reduce foreign “aid” and boost defence.
But if the UK parliament thought differently, I’d go along with it (of course). Going along with the EU rules makes me less happy.
Agreed, a government may well not repeal such examples, it’s just that on the whole they seemed to be resistant during the original discussions and enacted them under duress.
First off I’d say don’t beat yourself up for keeping schtumm about your views until after the event – I’d wondered if there would be a Monevator position article, but came to the view that you’d made the sensible decision that there was enough opinion flying around already and wanted to keep your blog on message, and keep everyone welcome under the one roof. So that was, I think, the right call.
I’ve cooled off a bit since last week – mostly because I’ve been immobilised with back pain and taking Ibuprofen tablets like they are smarties since last Wednesday. This denied me the opportunity to miss even a second of the rolling news on the Brexit shambles day and night for nearly a week. Thank God, last night I finally got to sleep through again at last, a result of the torpor I fell into watching the England vs Iceland game.
Sadly I can’t offer any fresh insight or analysis worth a fig as a result of watching non-stop media coverage of Brexit for what feels like a lifetime.
Looking back a few things stand out though. I watched Cameron’s final speech outside No 10 live, and as he turned from the podium it seemed that had there been a waste paper bin beside it he’d have flung his speech papers into it, his shoulders slumped and I thought: My God – he thinks he’s lost the vote. Then I thought: ** me! The whole thing has just been one big gambit and it has blown up in his face. And so it turned out. Then on Friday morning he hauls up the white flag outside No 10 and requires poor old Sam Cameron to stand to attention off to one side for ten minutes, lower lip trembling, and for what purpose? To make himself look good? What a twat, I thought. Not deeply argued criticism I admit, but bear in mind I was addled with drugs and pain all this time.
The other impression that lingers is the staggering scope of ignorance and misunderstanding all round. I tried to memorise the most extraordinarily irrational statements I heard but soon discovered I couldn’t – it seems that if there is no perceiveable sense to what someone says, recollection is nigh impossible. As a sampler, today on Radio 5 I heard a Brexit voter state one of their reasons to vote Leave was to stop the bedroom tax. Many things I’ve heard in the last week were less rational and thus easier to forget.
Perhaps on reflection though, the referendum has done us the favour of really allowing people to disclose their true frustrations, fears and troubles, so all that now has to be discussed and confronted politically, not least immigration. Many people seem to have responded to the referendum question as if it was “Do you like politicians and foreigners; and are you happy with your life and confident about your, and your community’s, future; and are you satisfied that the government cares about you and your chances in life? ” Erm, no … on balance, seems to be the answer.
So how to see through the gloom? Well, I’ve no clue how it will turn out – but then maybe this is the clue. This is surely one of those events, dear boys and girls, to mangle a quote. Perhaps this event should be taken on board like anything else that might rock the boat for a bit – and with calmness and deliberation, and sticking to the plan. No-one knows what will result – maybe it is a black swan or something, whatever. It turns out I can imagine all kinds of positive outcomes down the track if I eat enough Ibuprofen. For example, it might just turn out that whatever is hammered out to broker a deal between the UK and the EU may just produce a form of EU relationship that will be applicable to Turkey – access to the economic area but with restrictions on free movement kind of thing – leading to early entry of Turkey and an enhanced wider-EU zone with greater economic benefits to the UK as well as the EU generally. Maybe Brexit could provide a context for the contraction of the core EU to the original members who can move to full political union, and associated membership for satellites nations like the UK and Turkey who are too large or powerful or who otherwise self-exclude themselves from the full-caffeine EU thing. Though that does sound a bit like how the Soviet Union was organised doesn’t it?
Anyway – time to brush away the gloom. It is going to be a nice, long summer I think. Get out and wander around those leafy suburbs or whatever floats your boat, take it easy, and don’t do anything rash. We’ll muddle through somehow, I expect.
On the bright side, at least we won’t have to endure another summer of never ending news reports on what an economic clusterfuck Greece is. That was getting tedious.
@ IanH – “referendum has done us the favour of really allowing people to disclose their true frustrations, fears and troubles”. I hate to take issue but is this not akin to saying that someone’s murder-suicide has allowed them to exercise their aggravations?
As I understand, Switzaland signed a free trade deal with China. Demark was close but apparently it fell through. Don’t think there were any restrictions but I am not an expert on this
@William III — I’ve had several people make some sort of a comment or complaint to me — most perfectly polite and reasonable — and deleted a few abusive comments that the comment filter caught and held in moderation. Surely there are many more out there unspoken.
So be it. The site is free, as is their right to read another site more inline with their views if they prefer.
You cannot please everyone or anything like it, unless you never say anything. They are reading a site written by real people, not numbers off a Bloomberg terminal.
Also some people don’t seem to understand that because some significant number of a large number of voters are X — enough to make it worthy of comment — does not imply that saying so means everyone last one of them is definitely X too, when I don’t know them and haven’t met them. Utterly tedious. Set theory eludes them.
The reason everyone is looking at, say, provincial deprived towns that seem to have voted against their interests or the Remain vote being strong in London is because such examinations and contrasts might provide insights.
But you’d think it’s blindingly obvious that if 78% of people voted Remain in Lambeth, then 22% — many thousands — voted Leave.
Apparently I am supposed to go door-to-door canvassing the names and specific opinions of each and every voter before daring to speak about the subject.
Somewhat amusingly (or frighteningly) the complainers seem more annoyed to be (as they see it) conflated with less educated voters or working class Northerners than with racists.
Not surprising, perhaps, given they’ve all seemingly been of the Colonel “Barry” Blimp type, so far.
p.s. And before they say anything (even though they’ve apparently stopped reading) “more annoyed” doesn’t mean you are not “also annoyed” at being conflated with some other undesirable group. I’m sure most aren’t racist. It just reflects the balance of what people seem to have raised in their complaints.
@TI oh dear, I think locking Nigel away and losing the key for the next couple of years would be best. We need everyone to be clear headed and rational during negotiations not worked up and angry.
I do love the look on the faces of everyone around him though…… Esp the guy behind him at the end.
> Being part of Europe was what I voted for in 1975 and it has achieved the main objective that most of us had at that time – that of reducing the possibility of conflict in Europe. Conflict in Europe is now slightly less likely than Nicola Sturgeon declaring war on England. Job done.
@Barry M what makes you think conflict in Europe will remain so unlikely, and the job continues to be done – in 5, 10 or 20 years time, given the rise of interest in far right parties across Europe?
I am one of those much hated Eastern-Europeans. I’m even Romanian, so basically scum in the eyes of at least a part of the UK electorate – although I haven’t yet come over to take over your jobs and I have so far managed to fix my own teeth.
Even so, I am sad today. I am sad because in order for EU to stay together, everything needs to go badly for Britain. We cannot aford compasion, or even fairness to the UK, because if we want the EU to stay together, the UK’s exit must be so horible in it’s consequences, that no other country could even begin to contemplate it’s own departure.
It gives me zero joy, it doesn’t even invoke schadenfreude, just deep sadness. Sadness for all these people who will suffer as a result of a big basket of lies, put on repeat by a small man like Farage and an overgrown schoolboy like Boris Johnson.
Those people that you talk about, the ones that voted Leave because they feel cheated, those are the people who will suffer most. It wasn’t the European Union selling out their future, it was, as always, their own greedy countrymen. Capitalism cares nothing for people. And capitalists have found that it’s cheaper to produce elsewhere.
Globalization cannot be stopped by a referendum and there is nothing special about British salaryman that would justify them being paid 5 times as much for the same labour as somebody from China, or, indeed, Romania. There is no British exceptionalism, other countries can produce things just as well and they do it cheaper.
While being in the EU, they had a modicum of protection from globalization, because of tarifs for countries outside of Europe and because other countries actually want to protect their workers. But now that you are out, you are at the tender mercies of your own elites and they will sell you out. After all, it’s Britain that we have to thank for offshores right? I have worked in my life with French companies, German, Dutch, Icelandic and British. I don’t presume that my limited experience is anything more than that, a limited experience, but to this day I have never seen a company so eager to shaft it’s own country employees in order to save a buck such as the British ones. It’s almost uncanny how all your elites pay lip service to queen and country, but then they come in Eastern Europe because we are cheaper and then create offshore companies in order to avoid paying the taxes that would make your country and your fellow countrymen better off.
I’ll stop here, because there is nothing left to say. I’m sory to see you gone, I’m sory that now I mush wish the worst for you, in order for me and my familly to have a better life.
I grew up in the British colonies and sat in school next to the children of the newly independent elite. I saw them flinch as the teachers who were the remnants of the colonial administrator class patronised them without even realising how racist they were, it was so dyed-in-the-wool.
These kids are now the leaders of their countries that make up the commonwealth, I know from not being able to forget xenophobic slights aimed at me as a child, how they will feel about their experiences.
Those who have commented on this excellent thread in such a blase manner about how it’ll all be ‘all right on the night’ once we’re out of the EU because we’ll just resurrect the empire through trade, have so little idea how they are perceived in those countries that it’s beyond comical.
And if they think only the whiter countries within that grouping are enough and are loyal, they may have another surprise, the likes of Oz , NZ, Canada and the US are looking out for themselves as much as the UK. Whatever else could you possible expect, who did they learn from?
It’s incredibly easy to break something, but very few can create and where are all those neanderthals now?
@TI – I have been a regular visitor to your site for about the last 18 months and I will be forever grateful for the insight it has given me into the world of passive index investing. Following your suggestions I have read up on the likes of Lars Kroijer and Tim Hale and have moved my investments into a selection of global index funds that have stood up well in the current market turmoil.
In the last few days however you seem to have managed to undo the goodwill I had towards you. I voted Leave for what I believe to be carefully thought through reasons primarily based around democracy and self determination. I enjoy political debate but I do not understand why you would want to alienate readers of your site in the way you have.
For what its worth I grew up in NW London (at a school that sounded similar to yours) but went north to University and settled in a northern city. I like to think of myself as a free market capitalist with a social conscience and definitely not a racist. Can I politely suggest that you return the subject matter on your site to investing before you alienate any more of your followers, but then the choice is yours since as you say “Monevator is not a democracy. You had your vote. You can take your views elsewhere.” I wait in hope for normal service to be resumed 🙂
@raluca
I’m not sure why the EU would want to punish the UK, it is one of the biggest markets for EU goods. Harsh treatment will have little impact on the nationalist movements within the EU, for which Brexit is propaganda no matter what. Treat us badly, and the EU will be damned for its authoritarianism and anti-democratic nature. Treat us well, and that gives succour to life outside the EU. The EU’s best position on self-preservation is fundamental reform and a neutral/constructive stance with the UK.
Reform is the only way the EU can save itself and return to its free trade roots. Pretending Brexit is an anomaly and proceeding with the great project of European integration and federalisation will only lead to further disintegration.
If the EU does punish the UK, then we don’t have to accept any punitive trade deal, but simply buy EU goods subsidised by EU tax payers. The EU will transfer their industrial and agricultural subsidies directly to UK households in the form of cheaper goods and services. The EU will make themselves poorer by putting tariffs on imports from the UK.
Unilateral free trade trumps protectionism with the least distortion to capital allocation and removal of moral hazard.
Goodwill between nations, hey?
@Fremantle
You say: “Harsh treatment will have little impact on the nationalist movements within the EU”.
I beg to differ. Nationalist movements thrive on promising to the little people pie in the sky futures where everything is rosy if only they would get out of the yoke of the EU. This is, after all, what Farage and Boris have done. If life in the UK gets worse, then maybe less and less people will listen to LePen. Because they will look at the UK and see what those promises really are, nothing more than hot air. To sum it up, this will indeed not stop LePen from talking out of her French deriere, but it will at least give pause to most people from listening to her. UK as a cautionary tale is as good of a narative as any.
You also say: “Treat us badly, and the EU will be damned for its authoritarianism and anti-democratic nature.”
There is nothing anti-democratic in allowing a member of a group to leave that group and then not offering them the benefits that they had when they were in that group. It would be mad to do anything else.
“If the EU does punish the UK, then we don’t have to accept any punitive trade deal, but simply buy EU goods subsidised by EU tax payers.” – of course you can and you will do that. But you will destroy your own industry/agriculture in the process.
The EU subsidises agriculture for one simple reason – without subsidies little to no food would be produced here. When Turkish tomatoes cost half as those grown in Spain, because people in Turkey make a lot less money and they have less rights and a lower standard of living than those in the UK, well then, do you think your country men will agree to pay twice as much for food where they can buy cheaper elsewhere? There’s a reason that Tesco is in the shits and Lidl reigns supreme. The UK consumers like cheap goods and they don’t exactly care if they beggar their countrymen when they get them.
Standards of living would have to go down by a huge amount in order to make British goods competitive on a world market. What can the UK produce better than anyone else or cheaper than anyone else, something that no other country in the world has an advantage over? The Germans have the cars, the French and Italian have their luxury goods and wines, the Japanese their technology, the US their movies and guns, the Australians and Brasilians and Canadians and the Gulf states have their raw materials. Because that’s the only way you get to be rich as a country nowdays, when you have a tactical advantage over everyone else. Capital can move a production factory from Romania to Estonia or from UK to Mexic in a mater of months, so what can you do that no one else does better? And what does exiting EU mean for that advantage?
In order for the average UK worker to retain their current standard of living, you have to give extraordinary added value to the global economy. Globalization is not something that can be rolled back. Like water seeks an equilibrium, so do standards of living, and they will come to an equilibrium world wide, mostly because capitalists will always search for the next country where they can produce goods cheaply, in order to extract another half of a procent of profit for their corporations.
Had you stayed in the EU, the average UK worker standard of living would have fallen anyway, but it would have fallen to the average of the EU bloc. And maybe, due to synergies in the EU market, due to the sheer size and bargaining power of that bloc, that average would be a bit better.
Now that you are out of the EU, the standard of living of the UK will have to be competitive world wide. You are no longer competing with cheap Romanian produced goods, you are competing with cheap Chinese produced goods.
The UK and the world have a lot of soul searching to do.
@Lloyd
I think this blog has always been replete with strong (and sometimes quite personally cutting) opinions directed at groups of individuals. That you happen to be in the group on the receiving end for once shouldn’t change anything. I think authors should challenge readers with their writing. Sometimes that will involve strong (and sometimes quite personal) language – because that is one conveys raw feeling.
Maybe by being a successful blogger you have to be mindful of the sensitivities of your audience. However I, for one, hope that TI and the other authors on this blog never self-sensor in this way. I am happy to read thoughts that echo or challenge my own feelings – because they are just someone else’s feelings. You are free to disagree.
If we had stayed in the EU, I can only imagine that perhaps this (or any other Remain-leaning) blog would have strong-worded comments about how wrong the authors and we all were for staying in.
@Freemantle
Oh, and also “Goodwill between nations, hey?” – Yes, I do believe Farage’s speach yesterday in front of the EU parliament was an example of the goodwill of the British people towards their EU brothers. It was widely reported throughout the world as an example of restraint and diplomacy.
Should we respond in kind, you think?