The Financial Press Doesn’t Understand That It’s Explaining Brexit with Every Article It Writes June 24, 2016Posted by geoff in News.
I certainly didn’t have a dog in the Brexit fight – I guess I have a slight preference for UK independence just because the world seems like it’s getting too monolithic and homogenous. And, of course, the central planning of the EU has all the problems that central planning always does, so philosophically I like to see more localized decision-making. Still, though, it’s a weak academic preference.
But the unexpected amusement value of watching all the proponents of the EU freak out is making me a big fan of Brexit. For example, I think that the coverage of the reaction of the stock markets, is hilariously myopic. The financial press is doing its Chicken Little “OMG, Brexit is crashing the world’s finances,” as in this article from Bloomberg:
The world’s 400 richest people lost $127.4 billion Friday as global equity markets reeled from the news that British voters elected to leave the European Union. The billionaires lost 3.2 percent of their total net worth, bringing the combined sum to $3.9 trillion, according to the Bloomberg Billionaires Index.
It’s just stunning that these reporters can’t turn that factoid around, because it explains why Brexit really happened. Rather than just lamenting those financial losses (which are certainly mostly transient), if you step back for a moment you can see who benefited most from EU membership.
Very simply, those who are losing the most right now are the very people that the EU served best. For the little guys, not so much. Central planning always works out well for the central planners and those who can influence the central planners. The hoi polloi? They’re just money crops for the planners and their cronies.
So there’s no mystery as to why the Brexit vote went the way it did. It’s the same situation as our throw-the-doors-open-wide immigration policy, which makes companies more profitable and raises stock prices, but which compromises the lifestyle, safety, and economic opportunities of the folk at the lower end of the income spectrum.
Which brings us to Trump, who, very unfortunately, is the only candidate who seems to have grokked this fact. Hence his popularity.