The events in Great Britain and the wider European Union might seem as far removed from Broad Street and Kennedy Plaza as humanly possible. Thinking like that gets you totally left out in the cold and confused when the impacts hit.
We are facing a potential ripple effect, stemming from the Brexit, that could result in another crash for Wall Street, who made a foolish bet that the Britons would not vote to leave the Union. Edward Siedle, currently in the midst of auditing the public pension system, said “some of the hedge fund managers [that the pension is invested in] will have bet on it and there will be losers and possibly some winners. The losers make Crash and Burn”. News reports are beginning to indicate that the Employees’ Retirement System of Rhode Island (ERSRI) was impacted by events in the UK. However, the Treasurer’s office issued a statement on June 27 saying “members of Employees’ Retirement System of Rhode Island (ERSRI) should know that the recent volatility will in no way impact the ability of ERSRI to provide your regular pension payments.”
I can see Trump winning the election if he opposes what I expect will be the coming bailout of Wall Street… By the time Obama leaves office, the economy will probably be wrecked. I see us undergoing a slow crash. The economy will go down and down and down. If the Democrats give more money to Wall Street and creditors, if they say the debts have to be repaid, if they again use government to hand money to the 1 percent, they will be discredited. Economic chaos always leads to political chaos. The only way to stop this move to the right is for genuine socialist movements and parties, such as Podemos in Spain, to organize and challenge the international banking system and its enablers in the political establishment. And they need to do it now.
The position taken by national party candidates on the Brexit have been worthy of mention.
Hillary Clinton said “We respect the choice the people of the United Kingdom have made. Our first task has to be to make sure that the economic uncertainty created by these events does not hurt working families here in America.”
Sen. Sanders has stated “What this vote is about is an indication that the global economy is not working for everybody… It’s not working in the United States for everybody and it’s not working in the U.K. for everybody. When you see investors going to China and shutting down factories in this country and laying off, over a period of many years, millions of people, people are saying you know what, global economy may be great for some people but not for me.”
Donald Trump was jubilant, saying “The people of the United Kingdom have exercised the sacred right of all free peoples. They have declared their independence from the European Union and have voted to reassert control over their own politics, borders and economy.”
Green Party candidate Jill Stein said “Before the Brexit vote I agreed with Jeremy Corbyn, Caroline Lucas and the UK Greens who supported staying in the EU but working to fix it, because the EU has many problems. They also recalled the problems that existed before the EU between European nations. The EU was created to fix those problems.”
Libertarian candidate Gary Johnson said “We can view Britain’s exit from the [European Union] as some kind of catastrophic event, or as an opportunity… It is perfectly appropriate for the British people to make their own decisions about their own economic futures. It is not for us, either previously or today, to lecture them about their own best interests. The EU has, for some time, been pulling Britain down a path to unsustainable entitlements and away from the opportunities the free market offers. That voters rejected that path is not surprising.”
We decided to talk to some local unaffiliated and third party voters to see what they had to say about the fallout of the Brexit.
“In supporting Brexit, I prefer to reflect on the comments of Michael Gove, the British Justice Secretary” says Pat Ford of the Libertarian Party, “and that it is not some xenophobic Trumpian Dream. The Wall Street Journal quoted Mr. Gove, who declared that it was time to follow : ‘The Americans who declared their independence and never looked back’ and become an exemplar of what an inclusive open and innovative democracy can achieve. Simply put, democracy, self ownership, [and] self determination are the birthright of a free people. Faraway, unelected, bloated bureaucracies, of a failed attempt at a super state? To that, I say a resounding No.”
Judith Dixon writes “I am a local Green and grew up in Britain. My family and friends who still live in the UK voted to Remain, not because they were unaware of the damage that neoliberal capitalism has done to Europe, but because they didn’t trust the fascists who were running the Leave campaign. There were many similarities to the Trump campaign, including the fact that the right wing media totally fooled people. The masses blamed all their economic woes on immigrants instead of the elite politicians in Britain that had actually caused the problems. The people were also as frustrated as us with dealing with “pick the lesser of two (sometimes three in the UK) evils” politics and believed Brexit was the first time they actually had a voice.”
“What concerns me now and a lot of fellow Brits is that the center right parts of the Labour party are trying to push out Jeremy Corbyn,” she says. “He is treated similarly to Bernie Sanders, but he actually was able to become the leader of the establishment Labour party because of the people. If the Labour Party truly were a left wing party, then it would be rallying around its socialist leader right now in the hope that a new election would be called.”
“These are interesting times. Will fascism/corporatism or socialism prevail? Unfortunately, the fascists have a lot more money and political clout, but now more than ever it is time to abandon “lesser of two evil politics” because we are running out of time; the planet will be uninhabitable soon.”
Nick Schmader of Warwick, a member of the Green Party who will be soon begin canvassing for the Stein campaign, said “Even before Brexit net job creation in Rhode Island had come to a dramatic halt in April/May, so a new round of bail-outs or bail-ins along with more austerity measures, would be wrenching and further exacerbate grotesque income inequalities. State Banks, which Ellen Brown and others have been recommending, seem almost necessary in light of what Dodd-Frank actually says. Along with breaking up the big financial institutions into smaller entities that can be regulated and taxed, we need State Banks as a source of funding for local projects, large and small. Even four years ago Stein’s campaign captured most of this.”
One potential solution that has already been enacted in Europe is the idea of “bail-ins”, liquidating depositor accounts to resuscitate a troubled financial institute. The problematic Dodd-Frank Act includes language, inserted by banking lobbyists, that allows for these actions.
“This “bail-in” idea provides more political cover than a loathsome but straightforward bail-out”, says Schmader. “With a bail-in the depositors are screwed but the political fallout is limited. With a bail-out, if reported, the populace can get angry as we saw in 2008. Through all of this we have in Rhode Island a Democratic Party that functions totally within the neoliberal paradigm. We’ll give you a big tax break to relocate your enterprise to RI and use more regressive taxation to cobble together infrastructure and social services. We’ve joined other states in the race to the bottom.”
Jonathan Daly-LaBelle writes “There are five Independents who are running for School Committee in South Kingstown. I don’t know about the 5th, but 4 are big Bernie backers, including myself. I am currently a sitting Independent member of the SC. At least two of us are likely to support Stein over the alternative. Much of the focus of our beliefs is advocating against the educational establishment, with its hyper-focus on testing, narrowly defined what a successful student looks like, taking away teachers ability to teach, and all the resulting stress and anxiety for all involved. With the Independent nature, I would say there is strong value in developing alternates to the two-party system.”
One immediate option available to public officials in the wake of the Brexit is the creation of a public bank. Such a bank would hold state and municipal assets while servicing under-banked populations. For instance, one reason that the homeless are unable to successfully transition out of their circumstances is because they are unable to access a bank that will not charge them high fees typical today of commercial banks. Another use, suggested by Ellen Brown, a Green who ran for California Treasurer, is the use of the bank to fund infrastructure renovations and improvements. Brown tells me in recent correspondence:
I suspect we will see bail-ins. They’ve been expecting a black swan type event for some time. But it won’t work — people will be in the streets. What they should do is nationalize it and pay off the debts with QE (not tax money). Then make it a public utility and use it for the public benefit.
For more information on public banking, Brown has produced two useful episodes of her radio show It’s Our Money that profiles America’s sole public bank in North Dakota. According to the Public Banking Institute “as of the spring of 2010, North Dakota was also the only state sporting a major budget surplus; it had the lowest unemployment and default rates in the country; and it had the most community banks per capita, suggesting that the presence of a state-owned bank has not only not hurt but has helped the local banks.”