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Brexit and The FUD Factor

By Dean Whittaker

When I heard the results of the advisory poll vote, 52% vs. 48%, recommending that the UK leave the European Union, I felt a sinking feeling in my stomach. The FUD factor (fear, uncertainty and doubt) set in. I wondered what the consequence would be if the UK were to leave the European Union as promised by David Cameron, the current Prime Minister. More specifically, I wondered what the impact would be on economic development.

First, I felt there would be a period of great uncertainty that would result in a significant drop in the stock market. When uncertainty sets in, project decisions are delayed, and postponements often happen in a presidential election year, especially this one. A cloud of apprehension settles on us, and we begin to think the worst case scenario. We doubt ourselves and become fearful. The glass that was “half-full” a few days ago, suddenly, becomes “half-empty.”

Next, we slow down our emotional reaction and re-engage our logical left-brain that tells us, “This too shall pass. We have seen this before, and we didn’t die.” So what if the UK does leave the European Union? It is not the end of the world. Yes, it may hurt the UK, especially their financial sector, and cause firms to re-think their decision to locate there as a means to access the EU. We are also reminded that the vote was advisory, not mandatory. Once the British citizens begin to logically realize the consequence of their emotional decision, they would attempt to “right the ship.”

So what was this decision about in the first place? Let’s see who voted for what. The elderly felt that funds paid to the EU could better be used to provide them with health care. The unskilled were threatened by the influx of immigrants competing with them for jobs. On the other hand, the younger generation, especially with skill in-demand, saw access to all of the EU as an advantage, along with the freedom to travel and work anywhere.

Should the UK go ahead with exiting the EU, the immediate consequence is a lengthy period of uncertainty. There will likely be an exodus of companies who choose to move their headquarters to EU countries. Scientific research in the UK will suffer from the lack of funding from the EU. Travel within the EU for UK citizens will become more difficult. Trade agreements between the UK and EU countries will need to be re-negotiated, and many more changes that we have yet to discover will pop up.

Will the UK go through with the recommendations of the advisory vote? At this point, the once great British Empire has been so diminished that their decision will have little effect on the rest of the world. As the global FUD factor subsides, the stock market has begun its climb once again following what many cooler heads saw as a great buying opportunity.

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  • Don Iannone

    Hi Dean, glad to hear your voice on the Brexit vote. My grandson Evan, a senior International Relations student at Case Western Reserve University, is working on a research assignment in London. He’s seeing this firsthand, which is really great. He’s my on-the-ground eyes and ears on the Brexit aftermath. I wrote this poem the morning after the vote, which contains some ideas similar to yours:

    Brexit, the Morning After in Poetry
    By Don Iannone

    Should we be surprised Britain voted to leave the EU?
    Unimaginable changes, both good and bad have swept
    across the world since Britain joined the EEC in 1972.
    Everybody everywhere is rethinking who they are, and
    what is best for them today and in the future.
    Just look at the United States and its upcoming election!

    With all the uncertainty in the world today,
    we are prone to mistrust and distrust, and
    therefore we have Euroscepticism.
    What seemed to be a courageously smart idea
    has gored the oxen of the rich and poor alike,
    leaving us to wonder about the future
    of long-term committed relationships in the world.

    We don’t feel safe anymore, and so
    more people in the world are pulling back,
    rather than pulling together.
    Radical pendulum swings are underway.
    Conservatives just may gain greater ground
    in Britain, the U.S., and elsewhere in the world.