By: Ronald W. Rogé, MS, CFP®
Chairman & CEO
“The British Are Leaving!”
Paul Revere would have loved to have said these words during his famous ride through the Boston area during the American Revolution. The United Kingdom (UK) actually said these words last week to the European Union (EU).
Commonly referred to as “Brexit” for the British exit of the EU, it would be an understatement to say it took most of the world by surprise, since it upset the status quo and would require years of work to renegotiate the trade agreements. That played out in the stock markets around the world, where on Friday markets here in the U.S. fell 3.5%.
Markets do not like uncertainty so volatility should be expected for the next several weeks or so until calmer heads prevail and more certainty is introduced into the process of the UK exiting the EU. The UK and its 65 million people still have to eat, drive their cars, heat their homes, educate their children and root for their favorite soccer team.
While the size of the economic pie remains the same, the only issue is how much bigger or smaller the slices of the pie will be after the exit.
Although the UK may suffer some political and economic turmoil now, it will be short lived and they will thrive as a nation in control of its own destiny.
The Brits were very brave in making this difficult decision of take the path of most resistance. They are taking back control of their own country from the unelected officials of the EU (there are 40,000 of them) who pile on regulation after regulation on how members of the EU countries are to behave. Can you imagine what would happen here in the United States (US) if we had another level of unelected officials imposing regulations on our elected government? Make no mistake, our vote would be the same, but with a massively wider margin of votes to leave. As we would say, having unelected officials regulating us is just “un-American.”
As a citizen of the United States, with a better than average knowledge and understanding of the UK – reading the Financial Times (a UK publication) every day and through long standing, very close friendships we have with people in UK – I believe they have made the right decision.
I have always believed that taking the easy path hoping that things will change eventually may feel good in the short-term, but is usually not the right choice (read the book – Who Moved My Cheese, if you need a framework on this thought). Taking the difficult path, which requires risk, work and focus now, to achieve the greater good longer term is usually the right choice. Perhaps for the British people this is their version of our Boston Tea party. After all, this is exactly what we did during the American Revolution and look how that turned out.