At its heart in the Brexit debate are tribal beliefs on the UK content that hearken back to 1016 to 1066 and the conquest of England by the Normans, a recent Atlantic piece opined. The current battle over Brexit can, in part, be viewed from the lens of the Anglo-Saxon distrust of their Norman invaders. Using a comical approach, author Karl Sharro pointed to two people – an unaware taxi driver and a millennial engrossed in the “new economy” to explain the schism in British society that is Brexit. Can the same be applied in the US by using three characters to explain Brexit and the Donald Trump?
Reading the cave drawings in a working class living room
Joe is considered plain folk. I didn’t bother to ask his last name for this interview because, well… does it really matter? As a journalist when I quote his opinions I do so from the deft perspective of an anthropologist trying to sift through cave drawings of an ancient civilization.
Joe is upset. He was once considered the backbone of American culture, an “Anglo-Saxon” who feels the “Norman” invaders are all around his once proud kingdom. Judging by his cave drawings, I can’t exactly tell what the problem is. He seems to be drawing equivalency between the failure of New York Yankee pitching to explain why he feels economically disenfranchised. He is told he needs a college degree to remain a part of the new global economy, but with tuition costs out of reach, this isn’t practical. He can’t exactly verbalize concepts such as economic polarization resulting from globalization or explain in coherent fashion why a working class job can no longer support a family.
Failure to verbalize causation for disenfranchisement is attributable either to his inability to get Hamilton tickets on Broadway or real wages stagnating for the middle class during a period of historically rising income inequality. He is not part of the ascendant ones, society’s chosen. He is left behind. He might not understand it, but he knows what he feels — and it is anger.
Periods of great social accomplishment have a history of transforming to inequality and then beyond the pale. This happened in Florence, Italy during the 1400s, nearly 300 years after the Normans ruled wide swaths of England. The Florentine Renaissance period brought in an age of reason and enlightenment. But after great intellectual achievement, inequality began to run rampant. What happened is a cautionary tale because that society collapsed and it was replaced with a new less tolerant government that burned books, paintings and other signs of intellectual and behavioral borders being crossed. The same happened nearly 300 years later in France during the period when Queen Marie Antoinette was more than admonished over brazen inequality in the 1700s. Fast forward nearly another 300 years and Brexit is upon us along with an oddly historic US presidential race in sight. With societal change and the potential for a less tolerant government being touted as one overtone, is history repeating to various degrees?
Joe might not recognize the deep damage that could be done with a vote, but he hears dog whistles and likes their sound. Unfortunately, the covert racial ques that at one point in political history were only heard by racists are now publicly on display without much apology.
To Joe, these marching orders cast a spell that transcends geography. In the UK the overt dog whistles are found on an infamous “Leave” campaign poster implying a stream of migrants crossing into the UK. In the US, such thoughts materialize in talk of building a wall and the Star of David.
While the brazen nature of the dog whistle is used to focus Joe’s anger, it is crafty politicians who understand how to manipulate the emotion who are the real beneficiaries. For some Anglo-Saxon leaders, accustomed to a degree of control over a process that worked from behind the scenes, this is the real Norman invasion.
An economy dependent on $7 artisanal cupcakes
Craven was late for a job selling artisanal cupcakes for $7 each to well-healed pedestrians in in the financial district. Unable to find sustainable transportation from a home in increasingly distant reaches of the metroplex, Craven, the prototypical hipster, is dependent on a bicycle year round. Late but able to quickly answer a few imaginary questions, the fashion conscious humanities major is aware of the popular choice in the Brexit vote.
“I’m in favor of the European Union because we’re obviously smarter than those ‘leave’ simpletons,” Craven said. “The EU is the enlightened force. Their goal is to eradicate inequality – even if it means doing it by force.”
There are sound issues both pro and con for Europe’s marriage. The European Union has integrated Europe politically and economically, raising the international standing of the region. The fact is the EU has ruled during a period of historic peace and financial stability throughout the region. It is a tribute to their governance that a patchwork of ethnic tribes with a history of violence have co-existed in harmony for so long. But there also has been a dark side.
Craven was unaware of the increasingly autocratic methods the unelected government uses to rule its people. In fact, this boot to the throat method of dealing with the less financially well-off in Greece led to the potential breakup of the Triorka – with the IMF demanding human treatment and a sustainable solution be found. The European Union and the European Central Bank favored economic policies that actually inequality and showed little flexibility. The ruling class will rule without being questioned, was the mantra. Over the past decade, the European Union was increasingly demanding countries engage in deep budget cuts and gave blanket instructions to raise taxes without much choice – the ultimate taxation without representation.
That said, the European Union has a wonderful history. It’s existence was ushered in the aftermath of World War II and one of their first official agreements was the London Agreement in 1953 that essentially launched the German economic miracle, ushering in a half century of peace and prosperity. But apparently this amazing accomplishment is lost on today’s generation of leaders.
The Germans, now in charge of the EU experiment, are oddly finding it hard to provide the same degree of forgiveness, an issue dividing the region today. But it’s not just Europe. In the US similar issues are surfacing in Puerto Rico with an increasing number of US states and cities getting to the point of their debt being mathematically and practically unserviceable. These are the issues at stake and the question is: can a democratically elected government make hard choices and implement the change required? Or must it be done with an iron fist… or a black boot? To some these are concerns not being recognized. To others, impressions rule the day.
“I’m part of the group that benefits from societal inequality,” Craven reasons. “Look, if the world’s financial elite don’t have special privileges, how else could they afford my $7 cupcakes?”
The European Union should want to get smaller, like an exclusive club
You would think a Wall Street investment manager would allow cold math would rule the day, but that is not so. Regarding the European Union, emotion seems to take control of thoughts like a second head in heat.
The European Union has maintained financial stability across the region for 50 years and is a laudable institution. But if anyone should know this, a banker should realize the marriage of such disparate wealth was doomed to come apart — particularly when unsustainable debt burden was overlaid on top. How could voters revolting not be modeled into economic and hedge fund projections?
Reynard doesn’t see it that way. He thought it unthinkable the ruling class in Europe would not – could not – be challenged. He doesn’t view the EU in its current form as a sinking economic ship and doesn’t see the UK as part of a trend extension that was essentially started by the Swiss. While he publicly speaks about the dangers to the UK of the referendum, deep down he knows the issue is further wealthy nations leaving the marriage.
When comparing politics to baseball, Reynard falls back on the free market concept that bolsters the New York Yankees, among the top spenders in baseball year after year. He gets depressed when the Los Angeles Dodgers eclipse the Yankees in spending in 2016 and hates to see the Chicago Cubs with potential to win a World Series. He lives by the creed those that who can afford to spend the most money should reign superior.
The sophisticated Wall Street-based Yankees fan has a sense that victory is their birthright that transcends into society’s followers. Brexit supporters much like Trump voters are all the same — society’s losers who are upset because they don’t have a summer house in the Hamptons. The losers just didn’t go to the right schools, that’s their problem.
“Look, the Yankees like the European Union can’t be stopped and people should stop trying. It’s a gift from the gods,” Reynard explained. “We have to fight in life just like everyone else, so this inequality missive just doesn’t hold water. It’s like getting the prime table at Raos or when I had to walk over a homeless person to see Hamilton on Broadway. I’m fighting fights every day. Most people just don’t get it.”
When asked about the EU’s propensity for demanding governments raise taxes without representation, Reynard rolls his eyes. “US Constitution. Whatever. I do agree everyone should pay their fair share of taxes,” he said, a brochure for Panama tucked away in his briefcase.
Reynard is one of the US oligarchs that has a profound distaste for representative government. “Democracy and free speech are overrated. It’s for fools. Look at the US presidential election, for god’s sake. Democracy is too messy. Elites and those born with superior minds should determine public policy unquestioned.”
When asked about the EU’s treatment of Greece, Reynard was dismissive. “Look, the country likes debt and their leaders like derivatives. On Wall Street, we like those type of world leaders.”
But don’t the lenders of credit on the world stage have any responsibility to ensure loans to a sovereign nation are sustainable? “If a country like Greece has pledged assets that bondholders can seize, that’s debt worth buying. They just need to cut the fat out of their society,” he said.
As far as criticism of the European Unionand ECB and how they used coercion like a black boot put up against the throat of not just the Greeks but many member states – treatment that likely would not have occurred if they were democratically elected – Reynard is dismissive. “Average people don’t understand what they are voting for,” he says. “They need to pay their debt,” he says, knowing full well that the EU, UK and US government is required to backstop risk on his bank’s massive non-cleared derivatives bets. Without this government risk guarantee between $50 trillion to $70 trillion in derivatives exposure they have wouldn’t be viable.
“They just want government handouts,” Reynard extols. “Those days are over. Tax increases are right for Greece just like it is needed in Portugal, Italy and, yes, the UK. Demanding more discipline across the European Union is what is needed and an elected government will never get that job done.” Here he raises a key behind the scenes issue that involves hedge fund modeling. But don’t ask Reynard about the government charging the banks a premium for the derivatives risk insurance. “That’s absurd,” he sniffs. “Its un-American.”
Reynard and his group of like-minded thinkers who never break ranks have yet to consider the concept of contraction rather than EU expansion. The EU is now considering Turkey as a member at a time when they should be reducing their size, keeping those with financial means. If you want the European Union to be a sound and lasting union, perhaps a marriage of those with similar financial backgrounds works best. While this concept works so well in his social circles, Reynard has yet to make the connection with the EU.