What has the Brexit taught us?

There is a point where people stop believing what the institution says to do and they just vote with their key issues in mind. In the UK, we first hand got to see what that exactly means. It would be rash to think that the entire country has one & only one key issue; while perusing the interwebz in the lead up to the vote, it dawned on me that the media had framed the argument, as the British people voting against immigration. It’s disingenuous for the media to portray immigration being the “end all and be all” issue. I would have voted ‘leave’, but I would have ranked control over immigration as a secondary or tertiary issue. All we can tell from the Brexit is that collectively, the British people rejected the advice of their politicians, which was to remain in the EU; we shouldn’t try to pinpoint one issue, it’s not just one key issue that changed the minds of many. I’m going to talk about a few other key issues that may have motivated people to vote “leave”.

Maybe the perpetual debt cycle we see passed in congress, year in and year out does have a price. In Britain’s case, maybe politicians constantly over-promising but under-delivering, it ends with remaining in the Euro. The key issue for some people was national security. Imagine being British, having an attack, then having to deal with people all across the EU (many who don’t speak English) regarding how to react to a situation like this. Sure the EU would support but when you give up the ability to cheaply deport people from an island, maybe that island becomes no more. By this I mean, as of June 2016, the obvious solution to the terrorism problem from a British standpoint, is just to deport those they perceive as threats. You accept free flow of people and the situation deteriorates, all of a sudden a more complex solution will need to be generated. A more complex solution that will cost government money and potentially innocent lives while trying to implement their solution. Government cannot be trusted to deliver public transit on time, I would be terrified to imagine their solution to this problem. Maybe in the future, there will be a more efficient solution to the terrorist problem, but right now Britain doesn’t have to import this exceptionally European problem. We can’t defintively give a breakdown of everyone’s key issue but the British people accepted the responsibility of greater self determination & for that, newfound respect has been won.

The corrupt systems we currently have in place in the government, lead to many decisions being made without appropriate oversight, this is the modern day reality of present-day politics – they are especially more prevalent the bigger government gets because we (the electorate) don’t know if every segment of government performs value added tasks. Surely some do but there are also some that are outdated and need to be modernized. Without doing the adequate work (e.g. writing up control plans and pfmeas for each government service), it’s hard to be able to give an accurate breakdown. Since we don’t know one can assume the bigger a government gets, the slower the response would be to an attack like this in Britain. At least Britain will not be forced to deal with this symptom. These corrupt systems also insulate politicians from going to jail for poor decisions that are made; no corruption trials seem to ever take place, even when it appears there was merit for one – in my mind this is the key reason for the Brexit. There’s no traceability of government funds nor is there accountability to the top levels of government. Being a cabinet member doesn’t mean anything other than an increase in pay – I will present the example of Tim Hudak in next weeks article. Again all these are just as important as the immigration problem but seem to have gotten no pub from the media.

Hopefully Britain takes step towards self sustainability because that will be a key performance indicator for them to succeed. By accountability, if you read through my articles on government efficiency, there are private industry tools (control plans and pfmeas) that need to be implemented for each and every government service.

Regardless of all the key issues discussed, it seems like British people are finally just saying:

“reject the system, we need to control our own destiny”

& that’s why Brexit happened. While the rest of Europe waits, each member state should now be asking one and another if the Euro is really worth it. Asking, or perhaps pondering silently, if having one or two countries (France & Germany) pushing policy down your throat is worth a few extra bucks. Those countries pushing free trade and free movement of people, but for a country’s complete sovereignty. Is that current deal fair?

What Brexit actually means?

By this time, everyone’s probably heard of all the doom and gloom arguments coming from the euro supporting parties (e.g. Labour Party); how the currency is going to plummet, how the jobs are all going to disappear, how Britain is at a severe disadvantage due to having to renegotiate all their free trade deals over again from a weaker negotiating position. All notable points but just like the great Warren Buffet says:

“I will tell you how to become rich. Close the doors. Be fearful when others are greedy. Be greedy when others are fearful.”

The Euro vote is just a blip on the screen. The UK is at an enormous cost advantage because it’s stationed as the only English speaking country in all of Europe as well as the fact that it’s right at Europe’s doorway & that’s something no one can take away from that country. I love seeing the Monday morning quarterback articles where people accuse the ‘leave’ team of being stupid in a roundabout way. Examples include articles calling for a new EU referendum, which is basically circumventing democracy to get the results your side (remain) wants; to how “what is the EU” trending on Google UK trends, insinuating that British people made an uneducated vote; to how all the young people voted to remain while the older people voted to leave, meaning that old people are all racists who voted out of fear rather than common sense. Forget the fact that only 30% of young people (18-25 year olds voted), the British PM (Cameron) did a piss poor job of reaching out to young people and that’s why Britain didn’t Bremain. Young people need to understand, voting is your voice, in a democracy, we don’t riot in the streets, voting is your avenue to get heard, so VOTE. Don’t bitch and moan after the fact, this is why political discourse is so important. Also people neglect the fact that as people age, they see what government actually does, which is inefficiently deliver goods and services. They inefficiently deliver it because with many government services, they are the monopoly service provider and in situations with only one service provider, there’s less innovation rather than in markets with many service providers. All a Brexit means, is Britain will now have to start working to make sure their country doesn’t go under.

Again we don’t expect our government to work and that’s why so much of the establishment are pro-EU. Additionally, a Brexit means the rest of Britain also better start getting to work. Free trade leads to countries specializing in a skill or trade, as a member of the EU, Britain was a net importer of goods and services, what Britain now has to do is get to work and satisfy domestic demand. The government there needs to ensure that adequate information is flowing to business leaders detailing the products and services that the market wants. If the government and private sector can work collaboratively, then the EU’s worst nightmare could come true; that nightmare you ask? A lean mean British manufacturing machine could awaken. If manufacturing is done in an efficient manner, they’ll be able to kill the EU-based competition because staying in the EU means greater taxes. Again this is actually the primary reason why the large EU-based countries want to see Britain stay in; with the Brexit, those countries now have another competitor for their exports (think French cheese and wines or German automobiles).

No one talks about this point either and it is membership into the EU also means taking on any future liabilities that they may issue. Specifically when the EU issues spending, the U.K. being a member, would be obligated to its future indebtedness. So when Greece or Italy or Spain finally builds that border defense system that’s badly needed, then guess who’s going to be paying for it?

Why do young people not vote?

1. Because it won’t matter

2. Because I don’t know anything

3. Because I don’t like either candidate

All valid reasons but ones that spout ignorance at every corner. If you don’t vote, you accept the elected representatives as your voice. If you don’t vote and get trump, then notice that American hostility has increased around the world? Should’ve at least voted for the non-racist or accept the consequences.

I wanted to add why I think voter turnout is so low amongst young people. I believe the answer is the public school system we currently have. A school system that is responsible for educating 99% of our young people and one that has inefficiencies at every corner. Inefficiencies that have not been rooted out through private industry intervention, and due to the gatekeeper inefficiency – remain deeply ingrained to our children’s education system.

It’s a system that you really have no control over either and you can’t really judge fully until you go through it. That is why what I’m saying is relevant, because I’ve had the chance to go through 2 different high schools, University & many other continuing education courses so I carry that experience with what I say. Firstly, education should be free and I’m thoroughly discouraged when I see the amount of money people pay for it. If government intervention increases costs by 10% at every corner and doesn’t focus on actively decreasing costs then education will never be free. This is a fundamental fact of life. The cheaper you make things to learn the lower the cost of it becomes – economics 101. This is also the fundamental belief of why for consumers, a purely competitive market is superior to a monopoly or oligopoly. Also in purely competitive markets, employment and satisfaction is higher (think cell phone manufacturing vs cell phone service providers). Btw if there are more private schools, what this does is increase employment in the domestic education sector so if you’re a Canadian teachers college graduate with no job? Vote for the party who implements a voucher system.

The Internet has helped many industries (e.g. cabs, brick and mortar stores, textbooks) breakdown the monopolies that existed previously and that is because information became more cheaply available and innovation happened. This revolution has not happened yet to the public school system. It’s a government monopoly that we’ve entrusted to educate our kids and rather than teach more they seem to be teaching less. Education is slowly becoming privatized and we’re not even noticing it. The media machine is successfully convincing everyone that it’s not broken. One example of this is when I was in grade 12, rather than continue to make the math curriculum teach more, the Halton school board decided to teach less (specifically some vector math & imaginary numbers were removed). Complaints from parents that the material was too difficult forced their hands and now that 90+% in grade 12 calculus and discrete math just became attainable. The system downloaded those subjects from free public school to private school (university) and because of gatekeeper efficiency, I described a few articles ago, it’s basically impossible to reverse that change. Now you’re probably asking “How do you fix the school system?” That answer is easy. With a little infusion of competition (allow more entrants into the market) and vigilant data collection to ensure key kpis (standardized tests, surprise visits, and student feedback) are achieved, education can be fixed. Modelling our education system after the German education system will transform Canada, otherwise we’re on the slow road to becoming the 52nd state after Mexico. Btw that vector calculus sets the stage for matrix algebra and in the future, all of the high value jobs associated with machine learning and deep learning algorithms have their core in matrix algebra. Again it’s easier to get people to learn things gradually than expect them to learn so many new concepts in the short span of 4 years of university. This would also bridge the skills gap that new entrants in the job market feel – one of the key reasons that engineering companies would rather hire 3-5 years experience. But at the end of the day, if you educate everyone, then there will be no stupid people to sell worthless things to.

In next week’s article, I’ll go into a little more detail of how government decisions have cost the taxpayer billions of dollars. We’ll do a deep dive of the Ontario political scene and I’ll try my best to summarize the scene over the last 20 years. If you’re new to Ontario or just want to gain a better appreciation for why Ontario has voted the way it has over the last two decades, you’ll really enjoy next week’s article.

Article was written by gtareguy (Greater Toronto area real Estate guy) . I release a new article every Friday and I write about economics, the nba and real estate in the GTA.

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