U.S. markets continued to sell off Monday, with the Dow falling over 300 points and the S&P down over 2%. Global elites are blaming Brexit, the referendum last week in which United Kingdom citizens voted to leave the European Union. Opponents of the “Leave” movement predicted a market crash and are now wagging their fingers, saying “I told you so.”
They’re also accusing the Leave campaign of going back on its pre-referendum promises, reporting that over one million Leave voters now want to change their vote to remain, and continuing the narrative that Brexit was nothing more than a racist, xenophobic reaction against immigration.
Leave voters should expect their convictions to be tested nonstop until the break with the EU is official.
As I wrote just after the vote, some of the same scare tactics were used against the American people in the wake of the infamous TARP bill failing to pass on its first vote. American voters had deluged their representatives with angry phone calls, emails and letters warning against a vote in favor of the $700 billion bank bailout. On September 24, 2008, George W. Bush made an impassioned plea to the American public to support it.
If TARP didn’t pass, warned Bush, the markets would crash and Americans would lose a large portion of their retirement savings.
Pressure from voters relented and TARP passed on the second vote. But equities markets continued to crash, losing an additional 20% of their value after the bill passed. A prolonged recession followed, from which we arguably have never recovered.
That’s what comes of believing politicians when they claim that only giving them your money can save you. Let it be a lesson those under pressure to change their minds on Leave.
There isn’t much doubt a referendum of this magnitude would cause some uncertainty in financial markets. Uncertainty usually results in selling. But any attempt to blame a prolonged crash or recession on Brexit should be seen for the scapegoating it is. If this a major correction, it’s the result of a bubble that’s been looking for a pin for years, blown up by unprecedented inflationary policies by central banks all over the world.
On this side of the pond, the federal funds rate target for the Federal Reserve remains at .038%, following seven years targeting zero percent interest rates. This is the stuff the 2007 bubble was made of. Brexit now provides an excuse for the Fed to continue to inflate, something it was going to do regardless.
240 years ago, Thomas Paine wrote the following to Americans wavering in their support of our own secession from Great Britain:
“THESE are the times that try men’s souls. The summer soldier and the sunshine patriot will, in this crisis, shrink from the service of their country; but he that stands by it now, deserves the love and thanks of man and woman.”
Americans maintained their resolve in the face of a mighty empire waging war against them on their own soil. In 2008, faced only with the scare tactics of an unpopular president spouting economic gibberish, we folded our tents and gave in to the crony capitalist establishment. We’re still paying for it.
Stand firm in your resolve, Leave voters. What you’ve done is hated by all the right people, who don’t have your best interests at heart. Proponents of freedom the world over are looking to you for inspiration. Don’t let them down as we did.
Tom Mullen is the author of Where Do Conservatives and Liberals Come From? And What Ever Happened to Life, Liberty and the Pursuit of Happiness? Part One and A Return to Common Sense: Reawakening Liberty in the Inhabitants of America.