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Monday, June 13, 2016 11:07 AM ET
Dissing the establishment
By Nancy Bush
Nancy Bush is a veteran bank analyst. The following does not constitute investment advice, and the views and opinions expressed in this piece are those
of the author and do not necessarily represent the views of S&P Global Market Intelligence.
This revelation will probably come as no surprise to readers, but — I love words. I especially love big words, and I have since I was a kid. My father and
grandfather — neither of whom was a well-educated man but both of whom were ravenous readers — both read to me often, and when there was a word
that I did not know, I dived for the dictionary first and often the World Book Encyclopedia (remember those?) second. I still like to encounter new words,
except now I dive headfirst into Google or go to one of the many online dictionaries that are available where words are not only defined but shown in
correct usage in sentences — so in my view there is no longer any excuse for either bad spelling or bad grammar, in spite of the fact that both continue to
worsen in our society.
Of course, there were some words that I encountered as a kid that were so onerous in their spelling and usage that they have stuck in my brain until this
very day. High on that list was "disestablishmentarianism" and its even longer corollary, "antidisestablishmentarianism." (And no, at 28 letters, that last one is
not the longest word in the English language.) One of the reasons that this mouthful of a word continues to interest me is that its definition is so specific: a
campaign to sever links between church and state, used especially in regard to the Church of England.
I think that the word "disestablishmentarianism" needs to be dusted off and re-purposed for the present day. That thought occurred to me a few mornings
ago as I was listening to Bloomberg Surveillance on the radio (the sane person's alternative to the morning idiocy on CNBC) and the topic for several hours
was Brexit — that incredibly important vote coming up in the U.K. on June 23 that will determine the country's continuing relationship with the European
Union. The topic of the Brexit has received ample media coverage here, but I fear that its importance has been lost in the midst of the daily soap opera goings
-on of the U.S. presidential campaign.
I can make a pretty credible argument that Brexit is a much bigger deal than the 2016 presidential election, for several reasons. The first and foremost is that
the president that we elect on Nov. 8 is there for only four years — and a limited term is very likely this time around — and that whatever damage he or she
may do can be mitigated after their term is up. (Just wait and see what happens to Obamacare should the opportunity arise.) But an exit from the European
Union for the U.K. will be both final and forever — there will be no do-over — and will have effects upon both the citizens of the U.K. and the rest of the EU
that cannot be known at this point.
While much has been made of the anti-establishment mood of the American electorate in this election year — giving us the supposedly insurgent candidacies
of Bernie Sanders and Donald Trump — the reasons for the campaign for Britain to exit the EU seem to be even more worthy of contemplation. The reason
that the EU "establishment" — particularly Angela Merkel, François Hollande and the Brussels bureaucratic hordes — are so freaked out about this is that a
"Leave" vote in two weeks may (will?) make it more likely that there will be an avalanche of similar movements in other EU countries. Indeed, it's not
impossible that the fed-up citizens of Germany will do an abrupt about-face on their former enthusiasm for monetary and regulatory union.
There has been, of course, the predictable scare campaign on both sides of the Brexit issue, and as in our presidential season here, there seems to be a
dearth of facts to back up the scary stuff. The "Leave" campaign, led by Boris Johnson (one of the world's strangest and most fascinating political figures)
paints a picture of an island nation being overrun by hordes of foreigners, all of whom head straight to the welfare office before going to off-the-books jobs.
(Sounds strangely familiar, doesn't it?) The "Remain" campaign — led by David Cameron, the ultimate "toff" — has put out dire predictions about declining
trade with Europe, falling individual income in the U.K., a massive decline in Great Britain's influence in the world, a plague of frogs and locusts, and on and
on.
And of course, our own Dear Leader felt it necessary to wade into the middle of it all (due to our "special relationship" with the U.K., one which he had
heretofore not cared much about), and others in the European Union and elsewhere have felt it necessary to chime in with their predictions. I also found it
rather rich that Jamie Dimon appeared on a stage recently with the Chancellor of the Exchequer George Osborne to decry the "Leave" campaign and to put
forth his thoughts about how many of JPMorgan's U.K. employees would lose their jobs should Brexit become a reality. I have to ask — does he really think
that the prospect of fewer bankers in the U.K. is going to be enough to change the votes of those who want to leave?
Indeed, the big banks globally have a problem in this anti-establishment era, and it's one that I have been thinking about a lot lately. The home page of the
Leave.EU campaign contains the following statement: "If 3 million UK jobs depend on our membership of the EU, then even more jobs in Europe depend on
our economy. … We will always be a part of Europe. But the EU is run for big business, big banks and big politics — not for ordinary people." And therein
lies the cry of the anti-establishment forces the world over — big business, big banks, big politics — and if it's big, it must be bad.
Anyone who has even a passing acquaintance with me knows that I have not exactly been an establishment analyst during most of my career, and nobody
loves a good insurgency more than I do. (It's that Confederate thing all over again…) But I have acquired enough wisdom at my present advanced age to
know that the freedom of an anti-establishment view is not always free — it carries a price — and my fear is that many of the anti-establishment forces at
work in this country and in others simply have no Plan B should they become successful in their efforts. I'm convinced that Donald Trump and Bernie
Sanders have not a realistic clue what they would do should they win, and Boris Johnson in the U.K. seems much more enamored of the battle than of
forming a plan for governance.
I hope that the big banks and their CEOs in this country have a plan — not only for what will happen to their U.K. operations should the Leave vote succeed,
Source: S&P Global Market Intelligence | Page 1 of 2
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but what they will do here should the far left wing of the Democratic Party gain even more power on Nov. 8, because that's looking more and more like the
way things will go. Disestablishmentarianism — or dissing the establishment, as I have redefined it — is by no means finished in this country, and as the
leaders of the ultimate establishment industry, the CEOs of America's largest banks need to do some serious thinking about how they will grapple with that
reality.
Source: S&P Global Market Intelligence | Page 2 of 2