The world that we all knew before, could wake up in feeling safe… now it seems that everything has been turned upside down. —Tori Amos
When what we know takes a dramatic and unexpected turn, our perspective is that the world has turned upside down. Maybe it has.
Upside down. That’s the only way I know how to explain what is happening to the world this morning.
Normally, I wouldn’t bother writing about matters of foreign politics. We have more than enough trouble here in the US with complete ineffectiveness of our own political system. However, what Britain has done in voting to leave the European Union (EU) is not only a move that has devastating consequences for the island nation, but a ripple effect the covers the entire globe. Because the British Empire was once so extreme, everywhere they once touched is now affected by what has been termed the “Brexit.”
This may well be a warning for other countries considering any kind of selfish, “Make __________ Great Again” nationalistic-motivated action. As we watch what is only the beginning of a flood of consequences, perhaps we now realize just how interconnected the world is. One country’s mistake has devastating effects for every country with which it conducts business, accepts visitors or is an ally. Yet, because no other country dares interfere with the domestic politics of another, we have no choice but to sit by and watch.
Current Conditions
By the time most people read this, business in the UK will have closed for the day and won’t resume until Monday. Announcing the results of the vote on a Friday gave markets and people a chance to react but, hopefully, the weekend provides an opportunity for some of the shock to fade so that cooler heads prevail when markets open on Monday. Still, as I’m typing, here’s what’s happening.
- The pound has fallen to a 31-year low against the dollar. A renegotiation of all major trade treaties seems necessary.
- The Financial Times Stock Exchange (FTSE) index opened with a straight-line drop of -9% but has recovered to an overall loss of -4.5%
- Germany’s DAX is off -6.16%
- France’s CAC index is in the red – 7.73%
- Spain’s IBEX is taking the biggest hit at -9.98%
- British stocks have lost an estimated value over £122 billion
Take a deep breath. This is going to hurt. If there is a silver lining in all this chaos, it is not making itself visible at this point. England’s GDP could fall as much as 3%. Pensions for younger workers could be completely erased. This upside down condition is not a happy place to be.
Fashion Takes A Hit
One business that is extremely concerned about the Brexit is London’s fashion industry. Business of Fashion lists Burberry, Mulberry, and Jimmy Choo among the victims in early trading. Luxury clothing markets were already having a rough year and the volatility the Brexit brings to the market isn’t going to help any. Many of Britain’s major labels are likely to find they have to severely cut expenditures and manage cash flow carefully.
What this means is that London Fashion Week coming up September 16-20 is likely to be even smaller as designers whose margins are already thin opt out at least for the season. For those who do stay in, collections are likely to be smaller and presentations will almost certainly be less extravagant. Frugality is the name of the game for those who hope to survive. Getting British goods off the island just became a lot harder. There is no upside here for fashion
Caroline Rush, chief executive of the British Fashion Council, said in a statement early this morning:
There was an overwhelming support from our designer survey for the UK to remain in Europe and there will no doubt be upset and dismay at today’s result that will prompt an outreach to our friends, partners, business colleagues in Europe. We now have a role to play in keeping the government updated on our industry’s priorities and keeping the designer community updated on any likely impact to business as our country prepares to leave the EU over the coming years.
A Warning For America
As the United States considers the possible election of a Republican nominee whose personality and concepts share many traits with UK Independence Part leader Nigel Farage, we need to watch carefully and consider how our own election might have similar results.
The United States doesn’t exist in a cocoon where it takes care of itself with no attention to the outside world. Our levels of global trade are higher than ever. We cannot simply back out of agreements and treaties that make business possible for hundreds of thousands of American companies. Â Our dependency on trade with Mexico is one of the highest. If we build a wall, that trade is destroyed and American companies and consumers suffer most. The same applies to China, Japan, and the EU.
Furthermore, our standing in the international community would erode further. England is just beginning to see how their Brexit vote puts them at odds with the rest of Europe. Several companies have announced plans to leave England completely, dumping thousands of employees onto the unemployment rolls. Britain will lose its last AAA credit rating when it next comes up for review. Prices for goods produced outside Britain rise as higher tariffs are anticipated.
One bad judgement call started it all.
Not Much Left
We are seeing now just how severely this vote divides the UK, much as our own country is divided. Scottish first minister, Nicola Sturgeon, says that Scotland will almost certainly hold another referendum on leaving the UK, given that the whole of Scotland voted to remain with the EU. Members of Ireland’s Sein Finn also made statements this morning that the vote will likely fuel an effort to reunite Northern Ireland with the rest of the country. In the end, the UK may have nothing left but England and Wales by the time the Brexit is complete.
Such waves of populism are one of the primary arguments against democratic forms of government: there’s no way to stop the stupid. Every intelligent voice both inside the UK and around the world warned against the Brexit, but nationalistic-minded conservatives, fueled by an unrealistic fear of immigration, paid no attention to the warning.
A full exit from the EU will take approximately two years. There will be a lot of negotiation between the UE and the UK regarding trade, travel, and currency exchange. We have no way of knowing which direction those talks might go. However, when there are 28 countries teaming up against one that was always cantankerous, complaining, and acting like a bully, it doesn’t seem likely that Britain comes out on top.
The mighty have fallen. The world is upside down and twisting in the wind. Our best hope at the moment is that Americans don’t make the situation worse come November.
Things That Make Me Want To Scream
I have yet to actually lift my head up and scream, but after yesterday’s staggering results I reserve the right to do so repeatedly
I had to take a break from my vain attempt to keep up with world reactions to yesterday’s disgusting election results. Not only have we elected the embodiment of hate to both the positions of President and Vice President, we have armed them with a Republican-controlled Congress and an increase in the number of Republican governors scattered across the nation. While I know that some see this as a good thing, for people of reasons this is a very dangerous event with global ramifications. However, I had to take a break.
You see, we have a dog. We recently put a fence around the entire yard so that the dog, who is a mix of hunting breeds, would have plenty of room to run without having to be on a leash. He loves it out there. The downside is that he tends to be a little aggressive toward anyone who isn’t me. While he’s never bitten anyone hard enough to break the skin, he does have an awesome takedown move. Once you’re down, he’s not letting you back up until I come to your rescue. So, I needed to put “Beware of Dog” signs out on the fence, just to be safe. This is part of being a reasonably responsible dog owner.
Given yesterday’s election results, I’m wondering if we might not do well to place a series of “Beware of Politicians” signs around our country to other countries, businesses, and would-be immigrants can be informed and take evasive action if necessary. Such a move would seem to be the responsible thing to do.
Beware Of Falling Economy
Not everyone had finished voting last night before the global markets started getting the jitters. When the Asian markets opened around 10:00 PM Tuesday evening, currency was what took the biggest hit as both the dollar and the Mexican peso suffered on the uncertainty that the election might introduce a slew of unknown factors to the market. Markets prefer to maintain the status quo. Disruption is met with negativity and values decline sharply as a result.
Among the biggest points that have global analysts screaming is the fear that the new President could embolden Iran’s hardliners. Â This could lead to further instability in the Middle East and might possibly threaten the fragile Iranian nuclear deal. Continued instability worries investors as the price and availability of energy resources, specifically oil, has the ability to immediately impact markets, driving costs well out of anticipated range with no warning.
At the same time, Wall Street economists are concerned that the new administration might make changes to the Federal Reserve that would remove its autonomy from political influence. Such changes would further erode trust in and the power of the Fed, which in turn could trigger yet another global recession. Stability, again, is what the markets need and the threat of significant change at the Fed could send much-needed investment funds looking elsewhere.
While we’re over-simplifying some very detailed topics, the screaming point is this new administration has absolutely zero experience in monetary policy and the President himself has a proven record of failed business dealings and bankruptcies that erode faith in his ability to appoint staff capable of keeping things calm and moving forward. Recession could hit quickly and painfully once he is in office.
Danger: War Is Knocking
The concerned was raised in Europe a couple of days before the election. The North Atlantic Treaty Organization (NATO)Â put 300,000 ground troops on alert as fears of Russian aggression are growing significantly. The move represents a return to Cold War status for European NATO troops as Russian propaganda, a build-up of Russian forces along NATO borders, and aggression in places such as Syria remind long-memoried Europeans of the Soviet threat after World War II.
Now, add in that whole Iran nuclear deal thing, the situations in Syria, Afghanistan, Yemen, Egypt, and other hotspots, and mix those with campaign rhetoric that has threatened to not honor the NATO treaties while making friends with Russia’s Vladimir Putin, and one can see where our allies might not be feeling all that confident about our ability to keep the peace. In fact, there is more than a little worry that a shift in US policy might actually support Putin rather than trying to keep him and Russia in place.
All this comes on top of concerns about Daesh and Al Queda having possibly infiltrated the United States. As the father of an active-duty U.S. Marine, the proximity to war we now face has me worried not only for my safety but that of my son as well. Should something happen to him as the result of an unjust or politically-motivated war, I will not be forgiving.
Warning: Freedom of Expression At Risk
The back-stepping has already started. A number of news and media outlets did not take it easy on the Republican campaign. The Huffington Post even went so far as to include the following statement at the end of each article about our new President-elect:
“Editor’s note: Donald Trump regularly incites political violence and is a serial liar, rampant xenophobe, racist, misogynist and birther who has repeatedly pledged to ban all Muslims — 1.6 billion members of an entire religion — from entering the U.S.”
Care to guess what is being retracted today? HuffPo’s editors claim that their move is an effort to start the new Presidency with a “clean slate” and give him a chance. However, in a campaign that was filled with direct threats to members of the media, insults toward reporters, and a general lack of cooperation with and respect for the press, There aren’t too many people feeling as though criticizing the new President and/or his administration is going to be met with the usual denials and rebuttals. Just a few weeks ago, National Press Club president Thomas Burr criticized the Republican campaign for “journalist intimidation.” The insults and direct attacks against the news media and press have been unrelenting.
Now, the person at the heart of those attacks is, somehow, President-elect. Does anyone trust that the rough rhetoric of the campaign will just go away? Of course not! Instead, what we anticipate is a lack of journalistic access to the White House that we’ve not seen since the Nixon administration. Our reasonable fear is that anyone who dares to openly criticize the President might face a personal lawsuit, which, justified or not, no journalist can afford to fight.
We have fought long and hard for freedom of expression. The right of citizens to know everything their government is doing is inalienable. Without the press, a democracy quickly falls to a dictator. We are in grave danger.
Beware: Hate Is Claiming A Victory
This one may be what causes me to tear out my hair and do damage to my vocal cords. The instant media outlets declared that the Republican nominee had more than the required 270 electoral votes, former Ku Klux Klan Grand Wizard, David Duke, said, “Make no mistake about it, our people have played a HUGE role in electing Trump!” Never mind that the President-elect’s campaign officially distanced itself from the KKK and any other recognized hate group that tried to ride campaign coattails. No one ever believed those denials were sincere in the first place. Hate has always been standing right next to the Republican nominee as evidenced by his choice of running mates.
Of course, not all hate groups look like hate groups. The Washington Post ran an article this morning regarding the overwhelming role of specifically white evangelicals in electing the new President. They may not look like a hate group, but these are the people who have marginalized LGBTQ people for years. Evangelists such as Pat Robinson have vilified any and every Democrat they’ve come across. These are the same people who have spent the past eight years ridiculously attempting to accuse President Obama of being a Muslim. They are bigoted, homophobic, xenophobic, nationalistic, racist, and classist in the worst possible way.
Understand, none of these radicals may actually take an official seat in a cabinet post, but be sure that they are there, talking, advising the new President, and making sure that hate remains a part of the new administration’s agenda.
Who does this put at risk? Women. People of color. Immigrants. Children. The elderly. The poor. The homeless. Science. Reason. Our allies. The planet.
We have given power to the most ignorant, the most hateful, the most prejudiced, the most selfish, and the most diabolical group of people to ever set foot in our nation’s capitol. The dangers are very real. Ignore the warnings at your own peril.
I think we’re going to need more signs. And I still reserve the right to scream.
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