Welp… that happened.
The British shocked the world by voting to “Brexit” from the European Union (EU) as 17,410,742 (51.9%) votes to “Leave” prevailed against 16,141,241 (48.1%) votes to “Remain”.
I’m not a Brit, so maybe it’s a bit of an overreach for me to comment on Brexit, but hey, what good are blogs without opinion overreaches anyways? And given that Leave voters did a huge overreach on the world economy in their own right (I’ve already lost somewhere in the neighborhood of low 5 figures in market value), I will not abstain from serving up a can of whoop to a bunch of selfish leave-votin’ bloody wankers.
In all seriousness, this isn’t just a Brit issue. It’s a global issue. And if you think it doesn’t impact you, you’re mistaken. The S&P 500 dropped 3.6% Friday as global markets around the world dropped anywhere from 3% to 11% on day one of trading after the vote. Over $2 trillion in wealth vanished into thin air (the worst 1 day loss ever). And we may just be getting started.
Brexit isn’t an island unto itself (irony?). Just the fact that a Brexit can happen in year 2016 opens the floodgates for isolationist factions in other countries to push for the same thing. Pretty soon, we’ll all regretfully and endlessly start hearing about Grexit, Italeave, Oustria, Fruckoff, Departugal, Czechout, Polend, Finish, and Byegium.
The U.S. dollar will go up, as investors look for safe haven, and that will decrease exports. For an economy that is looking for a reason to have a recession and a market looking for a reason to enter bear territory, they might just have found one.
In other words, Brexit is a hot mess.
I think you’ll have to ask the British about that. Unfortunately, I don’t think you’ll get much of an educated response. In fact, 8 hours after polls closed, they began to frantically ask Google,
“+250% spike in “what happens if we leave the EU” in the past hour” – Google Trends
Awakening to a resigning prime minister, a government credit rating downgrade, a stock market plunge, a huge number of companies looking to now leave the UK, and the lowest valuation in the pound that Britain has seen in more than 30 years (a drop from $1.50 to $1.33 per USD overnight) can leave a bit of a hangover that makes you question your drunken decisions.
“I didn’t think my vote was going to matter too much because I thought we were just going to ‘remain,'”
one man told the BBC on Friday, while adding he was “quite worried” about the repercussions.
Another told a news channel,
“Even though I voted to leave, this morning I woke up and I just — the reality did actually hit me. If I’d had the opportunity to vote again, it would be to stay.”
Meanwhile, a petition that was created back in may asking for a 60% majority vote in order to “Leave” or “Remain” jumped to over 3.5 million signatures this past weekend.
By all accounts, the “Leave” camp ran a hate-filled anti-immigration platform that appealed to racist and anti-globalism anger. And it was primarily voted for by angry old men who now will leave younger generations to clean up the mess it has voted for.
Millennials overwhelmingly voted to stay in the EU, but only 36% of them went out to vote!
Globalism is Here to Stay
If you look at real disposable income for UK citizens over the years, it’s clear (aside from the Great Recession dip every country suffered from) that it saw a noticeable uplift after the UK joined the EU in 1973.
While the Great Recession has resulted in flat or declining wages in recent years, that is true for every country and has little to do with immigration or globalism. In other words – in the metric that should matter most – the British have benefited greatly from being in the EU and global trade, in general. It had been a pretty good run.
Here’s the thing – globalism isn’t going anywhere, folks. As long as there are planes, boats, and the Internet, the economy is only going to become more globalized, and those countries that stick their heads in the sand and isolate themselves from it are going to economically suffer the most. And personally speaking, it will be much more effective for you to focus on the things you can control (like recession-proofing your career and moving into fields that offer strong job security) than things you cannot.
What Lessons can be Learned from Brexit?
I think the message for millennial Americans here is pretty clear. If you don’t want angry old people to decide your future – you need to get out and vote and encourage everyone you know to do the same. And when you do, you’d best be served to vote on objective facts instead of clouded subjective emotions like anger and hate.