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April 16, 2016

The Nature of a Career Politician

By Jeff Thomas, Sprott Money News 
Recently, David Cameron presented to the British public his White Paper on whether the UK should remain in the EU, in preparation for the June referendum. For those who are unfamiliar with the referendum, it’s intended to resolve the degree to which the UK caves to an un-elected uber-government in Brussels, in trade for purported benefits of an all-Europe trade partnership, or whether it chooses independence – going through the hard work of creating individual agreements with EU countries, but gaining the ability to unilaterally make its own decisions regarding such weighty issues as migration, borderlessness, human rights, etc.

The migration issue is a major one. After much hand-wringing between the UK Government and the EU, a settlement has been arrived at that Brussels says it won’t budge on. In order to retain the UK in the EU, it will grant a seven year holiday on full-access to in-work benefits by newly-arrived migrants. In his White Paper, Mister Cameron presents this “emergency brake” as a major concession that he has achieved with the EU. However, what this concession really means is that the UK will bear the blows from a smaller cudgel for the next seven years, after which, the larger cudgel will be employed on a permanent basis.
He seems a bit baffled that British citizens are not impressed at his achievement, and it’s this character flaw that separates him (along with other political leaders) from the British people – he truly doesn’t “get” why the populace is not pleased to be temporarily beaten with the lesser cudgel for a limited period, followed by the permanent use of the larger cudgel.
To the average citizen, this should be easy to understand, yet this character flaw is the norm amongst not only British politicians, but virtually all career politicians, everywhere.
In my years of working closely with government leaders (and would-be leaders) from my own country and internationally, I’ve learned over time that there’s a mind-set that’s common to those who have made politics their life’s work. They think fundamentally differently from businesspeople, who learn to make things work both practically and economically over an extended period. They must do so, or go out of business. Political leaders, however, don’t have this restriction. For them, the job is not one of being profitable and effective in satisfying the public with a good or service. For them, profitability is irrelevant.Further, they need not satisfy the public; they need merely to succeed in imposing their programmes onto the public.
Politicians approach life from an entirely different viewpoint from business people and business people almost invariably fail to understand this. Although a former businessman who has entered public life may be able to place a foot in each camp successfully, those who enter politics early on, or those who have an initial career in the Civil Service, but later switch to politics, lack the fundamental understanding of the workings of economics and the free market.
They don’t so much seek to undermine the free market as much as they simply don’t recognize its relevance. (This, understandably, is a fact that businessmen find hard to acknowledge or adapt to, when dealing with political leaders.)
Career politicians assume that the nature of leadership is to burden the populace with legislation and taxation. They truly don’t understand the concept of limited government. It’s an absurd anomaly to them, so the question is therefore only the manner in which they burden the populace. Lessening the burden is simply not an issue. Whilst they understand that voters wish to be told that the burden will be diminished, it’s not by any means the intent of leaders to do so. In a politician’s mind, the purpose of the existence of the populace is to fill the trough for the leaders. And, of course, the fuller, the better.
In working for, with and (often) against political leaders on issues, I’ve found this to be almost universally true, regardless of which country they represent. Indeed, I’ve rarely been successful when appealing to any leader to drop a proposal because it might not in the interest of the populace. I have, however, often been successful in getting a leader to drop a proposal when I’ve advised him that it may be used by the opposition to cost him votes in the next election.
Again, the only exceptions to this have been those who were not career politicians. Regardless of whether I was dealing with my own country’s leaders, British Parliamentarians, or US Congressmen, virtually all of them have been career politicians and have, by definition, regarded their own position of power to be the primary concern.
The UK has had career politicians since time immemorial; the US had its first presidential career politician as early as 1825, in John Quincy Adams. In my own country, career politicians are not quite as common as in the US and UK. Consequently, we enjoy a somewhat more enlightened perception amongst our political leaders than the US and UK. Many come from the private sector and successfully return to it after they leave office. (It’s also true that career politicians I’ve known that have been ousted typically have had a difficult time obtaining and retaining employment after leaving office, as they simply don’t understand business or real life.)
This suggests that there should be term limits for politicians; that no one should serve in political office for more than a given number of terms. (Two? Three? Four?) This would certainly serve to keep the mix more healthy.
The likelihood of this coming about? Don’t hold your breath. No politician is going to vote to limit the amount of time he will be able to use the system to his own ends.
So, then, what about that UK referendum?
The purpose of this article is to offer insights into the thought process of career politicians, to assist the reader in predicting how his political leaders will act in any given situation, so it began with an example – that of the UK Government’s settlement with the EU with regard to the upcoming referendum as to whether to remain in the EU.
However, an associate has asked that I additionally offer an assessment as to how I feel the EU question is likely to be resolved following the referendum in June, given the true nature of political leaders. So, let’s have a look at that.
Certainly, they’ve already revealed their objective. Mister Cameron’s White Paper goes on at length (39 pages of encouragement) to recommend remaining in the Union. He describes it as “the best of both worlds … influencing the decisions that affect us, in the driving seat of the world’s biggest market,” yet, “we will be out of the parts of Europe that do not work for us.”
Mister Cameron also offers a warning as to what will become of Britain, should she leave the EU. “Leaving Europe would threaten our economic and national security … at a time of uncertainty – a leap in the dark.”
Of particular interest is his repeated reminder that, “The central element of the deal that the Government has secured is an International Law Decision … and cannot be amended or revoked unless all member States, including the UK agree…the International Law Decision is legally-binding and irreversible.”
Mister Cameron goes on at length to describe the “protection” that this allows the UK, as it would mean that the EU could not unilaterally apply greater demands on the UK without unanimous approval by all EU nations, including the UK. What he does not say, however, is that this agreement is reciprocal, which means that, although the UK may opt out of the EU now, the settlement presently under review requires that, should the UK choose to remain in the EU, it cannot in future make a Brexit unless all the 28 Member States agree unanimously. From that day forward, the UK will be on-board the EU train, even if it heads off an economic cliff. (Oh-oh.)
Mister Cameron closes with the comment, “It offers us certainty. We are stronger, safer and better off in the EU, compared to years of disruption and the uncertainty of leaving for an unknown destination outside.” The reader is left with the scary image of the UK being outside in the cold, poorly-clothed and with nothing to eat. Of course, this image is an inaccurate one, as, EU or no EU, individual European States will still seek trade with Britain, as it’s vital to the EU economy – an economy that’s presently nearing collapse.
So, to put the situation more simply, the EU train is approaching an economic cliff. It’s made a final stop, prior to resuming travel, in order for British passengers to get off, if they so choose. In order to keep them on board, they’ve offered a few concessions – offering to make the seating a bit more comfy. However, once the UK has agreed to resume travel, they’ll be strapped into their seats with no further opportunity to exit the train, even as it heads inexorably toward the cliff. Although a Brexit now would cause more immediate pain than to stay in, in the long run, all things being equal , Britain would be the first to escape the doomed train, and the first to recover, following the crash.
So, that’s it, then … Britons need to vote in favour of the Brexit?
Well, actually, in spite of all the above, not necessarily. And that’s because, all things are not equal. There’s a rather large fly in the ointment and that’s that that the process of withdrawal is rigged in favour of the EU. They have the option of prolonging the Brexit, so that it might take as long as a decade or more to negotiate. During that time, the EU would be free to carry on passing new legislation that was unfavourable to the UK. Would they do so? Unquestionably, yes. They would make an example of Britain, doing all in their power to demonstrate what happens to defectors. They would do this, even to the detriment of other Member-States. (Remember, this is not about progress, it’s about power. Brussels has positioned itself formore power and the deck has been rigged to assure that they get it.)
The upshot is that, if Britain could withdraw from the EU quickly, it would be in for a rough road initially, but, ultimately, would be recovering, just as the EU was collapsing. It would therefore emerge as a healthier economy, with the advantage with regard to future negotiations.
But that will not occur. The EU will prolong the Brexit and make it as painful for the British people as possible. We cannot know how vindictive the EU might be, or even can be. Consequently, there can be no clear answer as to whether it’s best to exit now, or stay on board and hope for the best. Either way, it will bevery painful for the UK. What we can’t know is which choice will be worse. Certainly, the EU will ultimately collapse and all bets will then be off. There will be a re-shuffle of the European deck and entirely new agreements to be considered.
Armed with our understanding as to the nature of career politicians, we can anticipate that what we’re likely to witness will be the EU and the UK Government working in concert to expand their mutual power, whilst Britain, as a nation, pays the price.
About the Author: Jeff Thomas is British and resides in the Caribbean. The son of an economist and historian, he learned early to be distrustful of governments as a general principle. Although he spent his career creating and developing businesses, for eight years, he penned a weekly newspaper column on the theme of limiting government. He began his study of economics around 1990, learning initially from Sir John Templeton, then Harry Schulz and Doug Casey and later others of an Austrian persuasion. He is now a regular feature writer for Casey Research’s International Man and Strategic Wealth Preservation in the Cayman Islands.

The author is not affiliated with, endorsed or sponsored by Sprott Money Ltd. The views and opinions expressed in this material are those of the author or guest speaker, are subject to change and may not necessarily reflect the opinions of Sprott Money Ltd. Sprott Money does not guarantee the accuracy, completeness, timeliness and reliability of the information or any results from its use.
The views and opinions expressed herein are the author's own, and do not necessarily reflect those of EconMatters.

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