Trying to Understand Brexit

I see lots of articles and opinions about the move of Britain away from the European Union, none of which indicate it's a good thing, except for Donald Trump, which makes me think it's probably a bad thing. But I'm just not totally convinced, and I think the best course is to just "Keep Calm and Carry On".

The Guardian US asked for questions from American readers on the UK’s decision to leave the European Union. Here are some of your questions, plus a few from the Guardian US staff, and our answers

In what way will Brexit affect the US?

As my colleague Dan Roberts explains, there are a number of ways Britain’s decision to leave the EU will affect the US – all of them bad. The IMF has warned that Brexit could knock half a percentage point off the output of all advanced economies by 2019, and turmoil in the stock and currency markets has already wiped $2tn off stocks and sent the pound to its lowest level since 1985. The EU could further unravel, threatening a relative anchor of diplomatic stability; US corporations may want to leave London; shared Anglo-US legal and free-market principles could be weakened internationally; and populism in the US could get a shot in the arm.

  Guardian

Of course the first question posed in this article is not about the British, but about how Brexit is going to affect Americans. And I don't buy the answer. More fear-mongering.

Knocking "half a percentage point off the output of all advanced economies by 2019" - there's three years time to work trade deals out amongst everyone in order to avoid major disruption, but I admit, I barely understand my own meager finances, let alone global intricacies. "Turmoil in the stock and currency markets" - that goes without saying, because that's the immediate effect of ANYthing that shifts the status quo. It's not infrequent for stocks to tumble and rise. How does that actually affect most Americans?

And, the pound now costs Americans $1.37, down a good deal from it's earlier rate (but it's been going down for some time).  So, isn't that a better deal for Americans if we're over there spending money?  Or American traders if they're buying British product?

"The EU could further unravel" - and it COULD hold as is.  What would be the effects if the EU did unravel?  That would be more helpful information, but still it wouldn't necessarily be what happened.

"US corporations may want to leave London" - MAY. But, surely not likely. At least not right away. Moving to another market is a huge undertaking for a corporation.  They won't be doing it willy-nilly or in fear mode. England is not going to suddenly become Pakistan. Corporations rule the world. Any that are actually doing business in London will be behind the scenes (or right out in the open) working to help stabilize the situation for their own best interests.

Internationally weakened legal and market principles? Why? Is the British government now going to cut all ties with the US or Europe? Are market principles so unstable?  Pipe me up another dream. Is this just more hacking at Jeremy Corbyn's less than neoconservative leadership? (Btw, he's in a bit of trouble as a Brexit backlash takes hold.)

And here's the big scare: "populism in the US could get a shot in the arm." Is that a BAD thing? How boldly the press denigrates empowering the people these days.

Actually, I do think  uneducated, ignorant, racist masses with power is a scary thought. But I'm not at all sure a world run by them would be worse than the one we have now where elites manipulate them into putting more power and riches into their own pockets. Maybe that's what's keeping the ignorance and racism alive.

How long could it realistically take, and is the Brexit vote more symbolic rather than just a clean break?

The process to leave the EU is meant to take two years once article 50 has been triggered. If negotiations have not concluded by then, the UK gets thrown out without a deal and trade goes back to World Trade Organisation rules, meaning the UK faces tariffs on all goods it sells to the EU. The EU could also agree to prolong negotiations.

Because that would be really smart. But then, what the EU did to Greece doesn't instill a lot of confidence in the intelligence of their leadership. Still, Britain is not Greece, and the major European countries, not to mention the meddling US, will not try to force Britain into a destructive situation.

A leaked German document suggests Berlin would drive a hard bargain in negotiations with the UK to “avoid offering false incentives for other member states when settling on new arrangements”. The document also suggests the EU would give “no automatic access to the single market”, a move obviously designed to deter other states from pushing to leave themselves.

Indeed, the EU leadership has itself in a bit of a sticky wicket regarding complaining members, but that can be attributed to their own manipulations and self-interest. Too bad they couldn't have been a little more far-sighted when dealing with Greece. MAYBE they'll be a little more careful with Britain. Or are they as short-sighted - or blind - as US elites?

Those limits may be an incentive for the next prime minister to conduct negotiations before triggering article 50, to make sure a good deal is struck without the two-year deadline hanging over his or her head. So it’s unclear how long the process could really take – years seem likely.

Indeed.  Everybody will be jockeying for a "good deal".

The EU may not play ball, for fear of encouraging separatist movements in other EU states. Far-right leaders in France, Sweden, Greece, the Netherlands and Denmark have already called for their own in/out votes.

The EU will play ball, I have no doubt.  But whether they play smart or not is still a question.  Perhaps if the leaders are faced with that many other nations on the verge of voting out, they should rethink how they're running things.

But here's something I didn't realize and which this article points out: London has to approve Scotland's decision to hold a referendum on whether to leave the UK. Scotland needs PERMISSION to vote on whether they want to be ruled by London?! Sweet deal for England.

And, to end the article - or I should say bookend the article - here's the last uniquely American question presented:

Does that mean the UK may get their guns back?

No, the gun ban was a UK law introduced after the massacre of 16 children and a teacher in Dunblane, Scotland, in 1996. There is no political pressure to reopen the issue, although Ukip leader Nigel Farage has called the ban “ludicrous”.

To get a thoughtful, reasoned take on Brexit, I now feel compelled to turn to Yanis Varoufakis, the Greek ex-finance minister who tried in vain to negotiate a workable deal for Greece, and he does not disappoint.

Leave won because too many British voters identified the EU with authoritarianism, irrationality and contempt for parliamentary democracy while too few believed those of us who claimed that another EU was possible.

I campaigned for a radical remain vote reflecting the values of our pan-European Democracy in Europe Movement (DiEM25). I visited towns in England, Wales, Scotland and Northern Ireland, seeking to convince progressives that dissolving the EU was not the solution. I argued that its disintegration would unleash deflationary forces of the type that predictably tighten the screws of austerity everywhere and end up favouring the establishment and its xenophobic sidekicks. [...] I argued for a strategy of remaining in but against Europe’s established order and institutions.

[...]

The repercussions of the vote will be dire, albeit not the ones Cameron and Brussels had warned of. The markets will soon settle down, and negotiations will probably lead to something like a Norwegian solution that allows the next British parliament to carve out a path toward some mutually agreed arrangement. Schäuble and Brussels will huff and puff but they will, inevitably, seek such a settlement with London. [...] However, despite the relative tranquillity that will follow on from the current shock, insidious forces will be activated under the surface with a terrible capacity for inflicting damage on Europe and on Britain.

Italy, Finland, Spain, France, and certainly Greece, are unsustainable under the present arrangements. The architecture of the euro is a guarantee of stagnation and is deepening the debt-deflationary spiral that strengthens the xenophobic right.

[...]

The only man with a plan is Germany’s finance minister. Schäuble recognises in the post-Brexit fear his great opportunity to implement a permanent austerity union. Under his plan, eurozone states will be offered some carrots and a huge stick. The carrots will come in the form of a small eurozone budget to cover, in some part, unemployment benefits and bank deposit insurance. The stick will be a veto over national budgets.

[...]

The horror of these developments, from which Britain cannot be shielded by Brexit, is the main reason why I, and other members of DiEM25, tried to save the EU from the establishment that is driving Europeanism into the ground. I very much doubt that, despite their panic in Brexit’s aftermath, EU leaders will learn their lesson.

  Yanis Varoufakis

And that's the shame of the whole thing.

While I remain convinced that leave was the wrong choice, I welcome the British people’s determination to tackle the diminution of democratic sovereignty caused by the democratic deficit in the EU. And I refuse to be downcast, even though I count myself on the losing side of the referendum.

As of today, British and European democrats must seize on this vote to confront the establishment in London and Brussels more powerfully than before. The EU’s disintegration is now running at full speed. Building bridges across Europe, bringing democrats together across borders and political parties, is what Europe needs more than ever to avoid a slide into a xenophobic, deflationary, 1930s-like abyss.

Good luck all round. The US won't be of any help. We're busy blowing up our own cart.