The Dividend Cafe - Forbes Article - One Man’s BREXIT is Another Man’s Prosperity – June 2, 2016

Episode Date: June 3, 2016

Forbes Article - One Man’s BREXIT is Another Man’s Prosperity – June 2, 2016 by The Bahnsen Group

Last week I participated in a lively debate sponsored by the British American Business Council, the OC Forum, and the World Affairs Council regarding the potential British exit from the European Union. The vote on this controversial referendum comes June 23rd, with polls offering conflicting results. My belief in the wisdom and even necessity of a Brexit is of the highest conviction. If I were a betting man, I would expect the referendum to fail next month, but for a Brexit, this British exit from the European Commission, to happen in a future year, but under much less fortunate circumstances than are available now. Sadly, they're delaying the inevitable if they vote to remain. The fundamental reasons to support a British exit from the European Commission come down to the sanctity of their national sovereignty,

the necessity of taking control over their own immigration policies, and a basic cost-benefits analysis. The belief that Britain's national security is threatened by leaving the EU is hogwash. The NATO alliance is unaffected by the move, the European dependence on Britain's stellar counterintelligence is unaffected, and the relationship with America is certainly unaffected. It's interesting to note that even loud opponents of the Brexit have ceased using this particular argument, for it truly doesn't hold up to scrutiny. Instead, the debate must be focused on free trade and immigration, and if I believe that British exports or imports were to be necessarily impacted by leaving the European Union, I would oppose the Brexit

firmly, as I am a free trader to the core of my being. But the reality is that the argument that a Brexit will diminish the free trade capacity of the United Kingdom is fear-mongering hogwash. Through time and post-Brexit ripples, her free trade will increase when devoid of EU bureaucracy and in fact will be a net benefit to Britain to negotiate individual deals and treaties. To suggest that trade will dry up because of Brexit reflects an incredible misunderstanding of how trade and how the very notion of free exchange really work. The Germans responsible for 35% of auto sales in Britain would surely disagree. Free trade zones exist now without this union stretching from Iceland to Turkey. Bosnia and

Albania are part of this zone. Do we really believe Britain will be excluded? On the immigration front, if millions more people come to Britain over the next 15 to 20 years, it surely will be a net positive to their economy and those who do not believe population growth is a boon to economic growth. They fail to understand one of the most basic and indisputable laws of economics. However, this presupposes that the immigration is healthy and in line with Britain's oversight, management, and best interest. The EU Commission states that free movement, and I'm quoting here, free movement is an inviolable principle of EU membership. As they prepare to add not just 73 million people from Turkey to this ill-fated commission, but also Albania, Macedonia, Montenegro, and Serbia, the stakes are high for Britain to

reassert some control of her own immigration policies. Independence in this regard would enable them to encourage a multiracial society free of xenophobia, but with a consideration for the quality of the immigrants coming, pro-economic producers and students and job creators, anti-criminality and terrorism. Welfare benefits to immigrants right now in England are outside the jurisdiction of the Brits. Rather, all decisions around such sit with the unaccountable body of the EU bureaucrats in Brussels. Immigration is going to force a British response either now or in the future. The British people very much wish the answer is now if they do not act. We hear a lot about the purchasing power of the British

pound benefits from being in the EU, an argument that would be a big surprise to residents of Switzerland using the franc day in and day out. Note, Switzerland is not a member of the European Commission. We have no doubt that the sterling would benefit through time after Britain were untethered to the disastrous EU, just as Britain has time after Britain were untethered to the disastrous EU just as Britain has already benefited from being untethered to the euro currency. In 1999 when so many nations made the grave and I will suggest eventually fatal decision to share a common currency it was Britain that had the wisdom and foresight to say, no, this continental cooperation stuff only goes so far. The differences in UK economic angst over the last 10 years compared to the peripheral nations of the Europe bloc who did not possess this wisdom is staggering.

No small coincidence that the arguments which were made in the 1990s for the UK ditching the pound in favor of Mother Europe's shared currency are making their way back in the form of this conversation now. May the wisdom that kept the UK out of the disastrous euro currency once again prevail and allow Britain to exit the eurozone and with that exit achieve greater sovereignty, independence, and economic opportunity. The cost-benefits trade-off is the real killer. The cost of being officially in this Eurozone outweigh the rewards for Britain by any mathematical measurement. When we look at the 13.6 billion pounds the UK contributed to the EU in 2015, all money that Norway and Switzerland and other prosperous European countries who are not in the Eurozone did not pay, we find a cost that is not able to be matched with a value. Another 200 billion pounds will be sent over the next decade, adding to the half trillion pounds sent since 1975. Enough is enough. There are some who defend the transfer

payments from Britain to weaker EU countries as analogous to the payments California makes to Washington, D.C. for various services rendered. But herein lies the rub. There's no comparison to California, Washington, D.C. for Californians elected their senators and congressmen and women who represent them in Washington, D.C. Our federal head with individual state model is categorically different from the structure of the EU, where member nations have no ability to hold the governing bureaucrats accountable. And this is the very heart of the matter, sovereignty. Britain is making transfer payments to a body that is not accountable to Britain's own citizens. The very point of this dysfunctional arrangement is that it does not function like the U.S. model does.

We can acknowledge that Brexit will mean short-term ripples and yet still believe it's the overwhelmingly right thing for the UK as a free and independent nation. Short-term pain and complexities can be factored into our analysis, but they ought not drive it entirely. When you're on the wrong bus, you don't wait till it gets to the wrong final destination. You save yourself a lot of pain and trouble to exit at the earliest opportunity. So the question is not what short-term volatility of Brexit invites, but what is best for the long-term impact on the British people and their national interest. Here, the answer is indisputably for Brexit. I close with these eloquent words from Lord Chancellor and Justice Secretary Michael Gove, ardent defenders of the Brexit position.

If we vote to leave, we will have, in the words of a former British Prime Minister, saved our country by our exertions and saved Europe by our example. firm that we believe our best days lie ahead, that we believe our children build a better future, that this country's instincts and institutions, its people and its principles are capable not just of making our society freer, fairer and richer, but also once more of setting an inspirational example to the world. It's a noble ambition and one we hope this country will unite behind.