The Mitchell Report: Brexit Becomes Brexile

This royal throne of kings, this scepter'd isle,

This earth of majesty, this seat of Mars,

This other Eden, demi-paradise,

This fortress built by Nature for herself

Against infection and the hand of war,

This happy breed of men, this little world,

This precious stone set in the silver sea,

Which serves it in the office of a wall,

Or as a moat defensive to a house,

Against the envy of less happier lands,

This blessed plot, this earth, this realm, this England,

Richard II, Act 2, Scene 1, John of Gaunt,

Dear Friends,

It struck like a tsunami, inalterably changing the political and economic landscape of ‘This blessed plot, this earth, this realm, this England.’ And by early morning on Friday, June 24th, Independence Party leader, Nigel Farage, would declare via Tweet:

“Today is a victory for decent, ordinary people who have taken on the establishment and won.”

“June 23rd must now be made a national holiday.”

Joined in this moment of unbridled jubilance by his co-conspirators and fellow Conservative Party MP’s, Boris Johnson and Michael Gove, Farage’s cries of ‘We’ve taken our country back” raced through the Twitter-sphere.

‘Back,’ indeed.

Back to the future, in which the United Kingdom swims alone in roiling, uncharted waters, leaving its European Union partners, allies beyond Europe, and a globalized economy in circumstances where stability and order are challenged in fundamental ways.

Many will argue that it has been a long time coming, that Prime Minister David Cameron tempted fate by promising this referendum on Britain’s European Union membership to make peace with the fringe elements of his party, and that what might have been a brilliant career is now reduced to a heap of ashes in a fireplace at 10 Downing Street.

Indeed, one can imagine Cameron quietly reciting the closing lines of John of Gaunt’s soliloquy:

This land of such dear souls, this dear dear land,

Dear for her reputation through the world,

Is now leased out, I die pronouncing it,

Like to a tenement or pelting farm:

England, bound in with the triumphant sea

Whose rocky shore beats back the envious siege

Of watery Neptune, is now bound in with shame,

With inky blots and rotten parchment bonds:

That England, that was wont to conquer others,

Hath made a shameful conquest of itself.

Ah, would the scandal vanish with my life,

How happy then were my ensuing death!

We say about events of this magnitude, “this changes everything,” and, indeed, it does. Just what will change, how promptly, how broadly, and how profoundly will be as much an unknown as in the months and years following the collapse of the Soviet Union and the attacks on the American homeland on 9-11, as well as the global vagaries of climate change.

Brexit rises to that level of disruption.

To help sort out the immediate and near-term impacts of this political and economic cataclysm, Council on Foreign Relation’s president Richard Haas organized a global conference call on Friday morning to focus on a range of questions that Brexit generates. Haas, one of the country’s most respected diplomats and foreign policy scholars, and his British colleague, Sebastian Mallaby, a highly regarded journalist-scholar on international economics and foreign policy, created an interactive forum for discussion of Brexit’’s impact on global politics and economics.

(Note: links to the Council’s website, including the transcript and audio for the call, and three additional sources are posted at the end of TMR)

Now, here’s TMR’s topline analysis of Brexit:

“But the worse part of doing what I never should have done

Is that I know there's more where that came from.”

With a nod to Lee Ann Womack soulful lyrics, most observers posit that Brexit may lead to Frexit or Nexit, departures by France and the Netherlands that could feed on the ‘centrifugal influence’ of Great Britain’s vote, further debilitating the EU and throwing Europe back to earlier times in the last century.

“This could be the heart of something . . . this could be the start of something big.”

Brexit could be ‘the beginning of the end of the United Kingdom,’ according to Richard Haas. Because Scotland voted to Remain in the EU, there is apt to be revitalized interest in Edinburgh and Glasgow for a new referendum on UK allegiance. Similar political dynamics could force unwanted changes in Ireland, jeopardizing the current, tenuous peace agreement. The Irish Times put it succinctly:

“The breakup of the UK now seems closer than ever before, perhaps inevitable whenever the formal break with the EU comes. It is hard to see pro-EU Scotland sticking with anti-EU England. This break will prompt the most profound questions for Northern Ireland since its establishment as a separate political entity from the rest of Ireland.”

“So this is essentially a cloud without a silver lining when it comes to the U.K. itself, be it economically or politically, when it comes to Europe or . . . to the United States. This . . . will diminish order within Europe and, arguably, beyond.”(Haass, CFR)

Sadly, Brexit was a ‘twofer’ — a ‘wake-up call’ and a “death knell,” leaving no chance for Britain’s leaders to respond to the former in order to avoid the latter. Brexit is seen as irreversible, irrevocable.

Would that Brexit had been a wake-up call — a canary in the coal mine, a harbinger. Not so for England, but perhaps for other states where deep dissatisfaction with the status quo threatens political stability, including sluggish or depressed job and wage growth, a hollowing out of the middle class, fears about borders and immigration policies, eroding trust in the institutions of government, hostility toward elites, all circumstances that can lead even the best of democracies toward ersatz, spurious remedies.

“The two great points of difference between a democracy and a republic are: first, the delegation of the government, in the latter, to a small number of citizens elected by the rest; secondly, the greater number of citizens, and greater sphere of country, over which the latter may be extended.” (Federalist 10, Publius, aka Alexander Hamilton)

Brexit raises vexing questions about the use of direct democracy practices in representative democracies and republics such as the United States (de jure) or Great Britain (de facto.) Two specifics arise in Brexit:

“But I do believe that the Brexit vote raises and puts front and center the entire question of the role of referenda in democratic societies . . . And what I believe Brexit shows, to some extent, is the danger of deciding truly consequential, even historic issues through referenda.” (Haass, CFR)

Among the most troubling aspects of this vote is the yawning gap between young voters and their elders: millennials voted Remain by 75%, Gen X’ers voted Remain by 56%/. By contrast, 65 and older voted Leave by 61% and those 50–64 supported Leave by 56%. So the generations that favored Remain will carry the Leave burden willed to them by their elders. Something about that disparity seems undemocratic, if not in the formal sense, at least in a framework of political equity.

Among the most salient questions for Americans is whether lessons lurk in the Brexit campaign that might foreshadow November 8th? Or more broadly, whether the rise of populist, nativist, separatist, doctrinaire, and ‘anti-other’ sentiments in various points across the Atlantic community are in some sort of harmonic convergence?

On the surface, there is much about the Boris Johnson–Nigel Farage brigades in Britain, the Le Pen acolytes in France, the Geert Wilders disciples in the Netherlands, and the Trump–Sanders supporters in America to suggest that a movement might be afoot. There is enough commonality in those demographic cohorts who are on the short end of the socioeconomic stick of globalization to imagine that a rolling revolution is underway.

But that is too facile. There are significant differences between competing candidate elections versus issue-oriented initiative and referenda campaigns.

There are substantial, dispositive differences between the relatively monochromatic demography of Great Britain (87% White) and America where 31% of voters in the presidential race will be Hispanic, African-American, Asian, or other racial and ethnic minority.

And while Brexit may be the defining issue of the moment for some Americans, many millions are more concerned about floods and forest fires, summer vacations, whether the Cubs and Giants and Rangers will sustain their winning pace, or a host of other matters that have little to do with this seismic geopolitical event.

On the other hand, as economists are wont to say, there are important unknowns and ifs, which could change the dynamic in fundamental ways.

If the markets open on Monday and continue their downward trend. And if they sustain that trajectory, as we saw post-Lehman Brothers in 2008. And if the monthly new jobs reports in June and throughout the third quarter are as anemic as the May number. And if Americans see continued declines in their 401 (k) accounts. Well, then, the picture changes. Then it can be said that Brexit can affect the outcome of the November elections.

But if the markets right themselves. If the fundamentals of the U. S. economy hold throughout the third quarter. And if there are no significant upheavals in the global economy that can be attributed to Brexit. Well, then, it’s just politics as usual (sic).

And before we go, three important thoughts to consider during the days and weeks ahead while pundits, politicians, and the people of Great Britain work their way through the fog of political upheaval:

Despite claims to the contrary, Brexit is reversible under the terms of Article 50 of the European Union charter:

“If a State which has withdrawn from the Union asks to rejoin, its request shall be subject to the procedure referred to in Article 49.”

Nothing official happens until the Article 50 ‘button’ is pushed, and that can only be done by the Prime Minister and the Parliament

The Brexit referendum is advisory only, not legally binding. It can be ignored, stonewalled, or even overturned by conducting a second referendum that poses the question of membership or secession in different terms:

“The simple answer to the question as to whether the EU referendum is legally binding is “no”. In theory, in the event of a vote to leave the EU, David Cameron, who opposes Brexit, could decide to ignore the will of the people and put the question to MPs banking on a majority deciding to remain.This is because parliament is sovereign and referendums are generally not binding in the UK.” (the Guardian, 6/23/2016)

Well, dear reader, you have made it to the end. And for that, we leave you with one the most pungent and off-colorful responses to Donald Trump’s ‘tweet read ‘round the world,’ which mistakenly gave credit to the Scots for having ‘taken their country back’ on the Brexit vote. Among the thousands, this one leapt off the page:

"Scotland voted to stay & plan on a second referendum, you tiny fingered, Cheeto-faced, ferret wearing shitgibbon." (Hamfisted Bun Vendor, @MetalOllie)

R. Garrett Mitchell

The Mitchell Report

themitchellreport.typepad.com