Break up California?
As I watch the California economy crumble into the sea, pondering whether the state will default first on my municipal bonds, my salary, or my pension, I’m struck by the absurdity that the world’s eighth largest economy (we used to be seventh, BTW) is essentially ungovernable. There’s a radical solution floating around, upon which Joe Weisenthal comments:
… the state’s uber-democratic system is broken beyond repair. It’s truly a failed state, in the classic political science sense of the term. If it were its own country, the US would be consulting with the UN and NATO about establishing a presence and supervising elections. So the state needs radical help, and a bailout will only make things worse. But theoretically the state is salvageable, argues Breakingviews, if only because the state could both afford higher taxes and reduce state spending. Spending is far from bare-bones levels, and state employees are extremely well paid.
But Breakingviews actually proposes a much more radical solution, which is breaking California up into 4 distinct states (seriously). Think of it like good bank/bad bank, but for states. Actually it’s a little different. The idea is not that this will solve the state’s financial problems, but that it will split it into four coherent political units, which would be:
- San Diego/Orange County/Inland Empire (socially conservative, Hispanic, heavily military)
- Greater LA (Hollywood and Hispanics, very liberal)
- San Francisco/Silicon Valley (Liberal, but very dynamic and market oriented)
- Central (Conservative, Kansas-like)
This is a political scientist’s late night fantasy and doing this might actually solve some political problems, but in the end it wouldn’t work. The first state to go would be Greater LA. You see, the Hollywood liberal types may love to support government spending and immigration, but the moment the entire burden fell on them to support the rest of the population they’d scream bloody murder. You know they would. And it’s probably a gloss-over to just say that the San Diego state would be solidly “conservative” just because there’s a lot of military and socially conservative Hispanics there. There’d be huge public support tensions over spending and government safety nets.
Beyond that, national Republicans would never go for this, since you’d essentially be creating three new Democratic states (it sounds like Central would probably be Republican), giving Democrats permanent dominance in the US Senate.
More California(s) Dreaming
By Frank J. Gruber
I know that the column I wrote a month ago with my idea about solving California’s political problems by breaking up the state has not caused a tsunami of comment, let alone action. However, I did receive enough inquiries to justify writing another one, to explain some of the details.
And anyway, I like writing about the idea.
Some inquirers wanted to know how exactly I would divide the state, and what the demographics would be. It’s important to note that there are many ways to divide California based on the primary criterion I identified in my first column — fairness. That means relatively equal populations, and representative demographics in all states.
But after tinkering with the map and the census figures, and talking over the idea with various people who know something about California — including, in one case, with farmers at the Farmers Market from San Luis Obispo — I came up with one plan that could work. Here’s the map:
I call the coastal state “Pacifica,” the mountain/Central Valley state “Sierra” (although it could keep “California” since it includes Sacramento), the southern state, “South California,” and Los Angeles, the “State of L.A.”
There are some counties that might not seem logically placed. The most difficult counties were Ventura and the two eastern Sierra counties of Mono and Inyo.
Ventura County is the most schizophrenic county in the state; part is connected to L.A. (though not many Venturans like to admit it), part to Santa Barbara, and part is still agricultural, like the Central Valley. Probably the most logical grouping would be to include it in South California, but I haven’t researched whether a state can be non-contiguous.
The eastern Sierra counties present a special challenge. Although they resemble most closely Sierra in economy and culture, I included them in South California because of the difficultly in traveling from one slope of the Sierras to the other for most of the year, when the passes are snowed in.
If California broke up on these lines, this is what the demographics would look like:
|New state:||Sierra||Pacifica||So. Calif.||L.A.|
|Pop. (in 1,000s)||7,177||8,807||9,088||9,519|
You may have noticed that the percentages for the ethnic groups add up to more than 100 percent. The reason is that Latinos can be of any racial group. I am only using these numbers to show that all four states would have substantial minority populations. As opposed to the Stan Stathan plan of 1993, it’s plain that no new state would be a white enclave.
The populations of the four states are all within the same range, as well, especially when one considers that the new state with the smallest population, Sierra, also has many of the fastest growing counties. The average is quite close to the national average state population.
Another question people ask me is how the new states would shake out politically, because they wonder if the politicians who would have to vote on the plan, both in Sacramento and in Washington, would go along.
|The conventional wisdom is that Republicans would never agree to give Californians another six senators. But the numbers show that at least in the short run, Republicans would probably gain.
Republicans would gain because some of California’s electoral votes — now a lock for Democrats — would be up for grabs. Democrats would gain because they would have the possibility (only a possibility) of increasing their proportionate representation in the U.S. Senate.
To the left is a map (using the familiar red/blue, Republican/Democratic convention) that shows how California counties voted in the 2004 presidential election:
It’s obvious that California has its own red/blue divide; it seems that to be a Democratic county you have to have a coast. Here are the numbers for my four states:
|New state:||Sierra||Pacifica||So. Calif.||L.A.|
What these numbers show is that Democrats would have a lock on L.A. and Pacifica — no surprise to anyone. At the moment, the other two states are Republican, although not overwhelmingly so. Democrats — perhaps only the moderate kind — could win statewide elections in them, as well as presidential elections when the country wasn’t scared about national security.
Now California provides Democrats in the U.S. Senate with a 2-0 advantage. Republicans would gain, therefore, if, after California broke up into four states, there would be 4-4 tie. Democrats would hold their own at 5-3, and improve if they could take half the seats in Sierra and South California.
The idea might look scary for Democrats and national Democrats would panic over losing the lock on California’s bloc of electoral votes. But if my proposal ever gets beyond the stage of my fantasies, I would hope that Democrats would take a longer-term view.
First, increasing democracy, small-d, is always a good idea for Democrats. The fact that the urban populations of L.A. and Pacifica would have their own senators and House delegations is good no matter what.
For that matter, it would also be good for the nearly 20 million people in Sierra and South California to have as many senators as, say, the few hundreds of thousands of voters in North and South Dakota have, even if they are Republicans. They are going to be better Republicans, from a Democratic point of view, that those who come from Oklahoma.
Second, the populations of Sierra and South California are changing, becoming more urban and more ethnic. As they do so, there will be more opportunities for Democrats — local Democrats who will understand the local politics better — to improve their showings.
Unscrambling Eggs: It’s Time to Break Up California
By Frank J. Gruber
“If nothing else, the comic opera collapse of the two-month political quest for a plan to improve highways, levees and other strained and deteriorating public facilities should finally convince Californians that their Capitol is a broken institution, endemically incapable of dealing with major policy issues. . . .
“Simply put, California’s dizzyingly dense mélange of ideological, geographic, cultural and economic subgroups interacts with a political structure that, in effect, gives every ‘stakeholder’ a virtual veto power over the product. Under those circumstances, there are only two possible outcomes, both of which are bad. Either the product is a monstrosity that accommodates all demands but collapses of its own weight, or there is stalemate and no product at all.” — Veteran Sacramento watcher Dan Walters, writing in the March 17 Sacramento Bee.
Governor Schwarzenegger and the Legislature failed to agree on an infrastructure bond to put on the June ballot, even though everyone agrees California needs major public investment. This latest political fiasco is one more indication that California’s politics are dysfunctional, as if the recall of a governor, the state’s recurring fiscal crises, and the ever-increasing use of ballot box government were not enough.
Different analysts blame different causes, from term limits to gerrymandering to big money in politics, but they only scratch the surface, and no one has a serious clue how to fix the problem.
And no one will fix the problem so long as, in Dan Walters’ words, California is a “dense mélange of ideological, geographic, cultural and economic subgroups.”
It’s time to break up California.
Our huge population, 37 million, and our 163,707 square miles spread over distinct regions with different needs, have reduced political debate to the cost of TV spots and political office to non-stop fund raising. Political discourse revolves around one word: taxes.
Most important, Californians have no common purpose.
On the national level, California is an anemic giant. Our two senators represent 37 million people — about the same number as the 44 senators of the 22 smallest states. Not coincidentally, we rank near the bottom in the return on the taxes we send to Washington.
It’s time to break California up into smaller, more governable states, each with its own representation in Washington, each more attuned to the needs and wants of its residents.
Breaking up California is an idea that has been around since as long as California has been a state. But it is an idea that only now makes sense. Only now can California divide on principles of equality between, and benefit for, each new state.
Some history. Almost immediately upon California’s admission to the union, the “cow counties” of southern California wanted to secede. In 1859 a plan to divide the state north and south even passed the legislature, before dying in Congress.
In the 20th century, various plans to split the state emanated from the north as both water and political power flowed to the faster growing south. The most recent attempt occurred in 1993, when Stan Statham, a member of the Assembly from Shasta County, proposed to break California into three states. His bill to put the plan to a vote passed the Assembly.
What all the old proposals had in common was the notion of secession, of escape. Break-up proponents wanted to escape the bigger whole by creating states that were more homogeneous — more reflective of their own interests, culture, or ethnicity — than the state or states they would leave behind. Statham, for instance, wanted a state of “North California” that would have had a population of 2.4 million, of which 93 percent would have been white.
All these plans failed, and for good reason; those who would be “left behind” had no good reason to let the seceders go.
Now Californians should consider breaking up the state on different principles: equality and mutuality. The purpose would be to create states with residents who are more united in what they want from government, but with populations that are more or less equal in size and diverse demographically and economically.
In fact, California has grown so diverse — with no single ethnic group being in the majority — that it is impossible to divide the state into three or four contiguous sets of counties, with roughly equal populations, that do not each have substantial ethnic diversity.
To understand why breaking up makes sense, it is important to remember that California’s problems are political, not substantive.
California is a rich state. It is anything but in decline. It has ample resources — human and economic — to solve every one of its problems but one: the problem that Californians have lost confidence that government can do the solving.
Californians bemoan both gridlock in Sacramento and the regularity of “voter revolts” that perpetuate the gridlock, but if state senators represent almost 900,000 people each and members of the Assembly about 450,000, why shouldn’t their constituents feel unrepresented?
When deep-pocketed private interests and special interest groups manipulate the initiative process, why shouldn’t the people feel cynical about “popular democracy?”
When it costs tens of millions to run for statewide office, why shouldn’t constituents lack confidence that their “representatives” will be looking out for them? For that matter, when the regions of a state are so diverse, why should we expect the people to agree on what “looking out for them” means?
Californians need state government that is closer to the people, and state government needs constituents who have more similar needs, who have a more common purpose.
The key to a successful division of California would be to create new states that make geographic, demographic, economic, and political sense. The states would need to be distinct and cohesive, yet maintain diverse populations and economies.
These states could have more or less the national average of eight million people per state, yet they would be so much smaller than California today that state government will be dramatically closer to the people and more responsive to their more homogeneous and identifiable needs.
As just one possibility, imagine if California divided into these four states: one combining northern and mountain counties with the Central Valley; a San Francisco Bay and coastal state; a Southern California state; and a state of Los Angeles County alone.
Each of these four states would have between seven and nearly eleven million people, and each would be big enough to have diversified economies and populations. At least 40 percent of the population of each state would be Hispanic, Asian, or African-American. The smallest in square miles, Los Angeles, would still be more than twice the size of Delaware and big enough to have within its boundaries the equivalent of two national parks.
Breaking up California would not be simple, although the legal procedure is not complicated. Under the U.S. Constitution, a state can divide if its legislature and Congress agree.
The Assembly and State Senate would presumably make their approvals subject to a vote by the people. If the people want to divide, then Congress would decide. While small states might not want to give up a little power in the Senate, the national political parties would likely go along, rather than alienate so many Californians.
Of course, drawing boundaries would raise a lot of big questions about what should constitute a joint political enterprise, and eggs would need to be unscrambled.
California’s debts and assets would have to be apportioned. The new states may decide to hold and fund some assets jointly, such as the California Water Project or the state’s institutions of higher education. (“The University of the Californias?”)
Agreements that are intrastate now, such as those relating to water, and regional entities, would need to go interstate. Already, California and Nevada jointly manage Lake Tahoe, and the water from the Colorado River is subject to an interstate compact. Compacts between states are common elsewhere, as are interstate authorities like the Port Authority of New York and New Jersey.
Each state would have to write a new constitution, but that would be a plus, given the barnacles encrusted on the California Constitution. The electorate of each state will have the chance to start fresh.
The wild card would be politics. It’s hard to predict how the various interests in the state will position themselves, but every big idea engenders opposition. The ultimate question will be whether Californians in each region are willing to give up some little control they have over other regions in return for having much more control over their own.
I recently listened to a 1993 recording of a debate over the Statham proposal to split California into three states. Assemblyman Statham and a supervisor from a rural northern county defended the plan. Then-Assemblyman Willard Murray from Paramount and historian Kenneth Starr opposed it.
What they said was illuminating. Although the Statham plan was never going to fly because it was so unequitable, giving two senators to three million northern Californians and two to seventeen million southerners, the arguments Assemblyman Murray and Prof. Starr mustered against the plan were weak.
Murray argued that Central Valley farmers would not be able to sell their products to Southern California, as if splitting California would revoke the interstate commerce clause, while Starr earnestly invoked our shared history and traditions.
Not long after listening to the recording, I spoke to Dana Cuff, a UCLA professor of architecture and planning who has written extensively on land development in Los Angeles. Speaking as a scholar but perhaps more importantly as a fourth-generation Californian, Professor Cuff had a more trenchant analysis.
As she put it, “in California, tradition doesn’t mean too much.”
Divided We Stand
What would California look like broken in three? Or a Republic of New England? With the federal government reaching for ever more power, redrawing the map is enticing, says Paul Starobin
Remember that classic Beatles riff of the 1960s: “You say you want a revolution?” Imagine this instead: a devolution. Picture an America that is run not, as now, by a top-heavy Washington autocracy but, in freewheeling style, by an assemblage of largely autonomous regional republics reflecting the eclectic economic and cultural character of the society.
There might be an austere Republic of New England, with a natural strength in higher education and technology; a Caribbean-flavored city-state Republic of Greater Miami, with an anchor in the Latin American economy; and maybe even a Republic of Las Vegas with unfettered license to pursue its ambitions as a global gambling, entertainment and conventioneer destination. California? America’s broke, ill-governed and way-too-big nation-like state might be saved, truly saved, not by an emergency federal bailout, but by a merciful carve-up into a trio of republics that would rely on their own ingenuity in making their connections to the wider world. And while we’re at it, let’s make this project bi-national—economic logic suggests a natural multilingual combination between Greater San Diego and Mexico’s Northern Baja, and, to the Pacific north, between Seattle and Vancouver in a megaregion already dubbed “Cascadia” by economic cartographers.
Hulton Archive/Getty ImagesPatrick Henry declares ‘give me liberty, or give me death’ in his 1775 speech urging the colonies to fight the British.
Devolved America is a vision faithful both to certain postindustrial realities as well as to the pluralistic heart of the American political tradition—a tradition that has been betrayed by the creeping centralization of power in Washington over the decades but may yet reassert itself as an animating spirit for the future. Consider this proposition: America of the 21st century, propelled by currents of modernity that tend to favor the little over the big, may trace a long circle back to the original small-government ideas of the American experiment. The present-day American Goliath may turn out to be a freak of a waning age of politics and economics as conducted on a super-sized scale—too large to make any rational sense in an emerging age of personal empowerment that harks back to the era of the yeoman farmer of America’s early days. The society may find blessed new life, as paradoxical as this may sound, in a return to a smaller form.
This perspective may seem especially fanciful at a time when the political tides all seem to be running in the opposite direction. In the midst of economic troubles, an aggrandizing Washington is gathering even more power in its hands. The Obama Administration, while considering replacing top executives at Citigroup, is newly appointing a “compensation czar” with powers to determine the retirement packages of executives at firms accepting federal financial bailout funds. President Obama has deemed it wise for the U.S. Treasury to take a majority ownership stake in General Motors in a last-ditch effort to revive this Industrial Age brontosaurus. Even the Supreme Court is getting in on the act: A ruling this past week awarded federal judges powers to set the standards by which judges for state courts may recuse themselves from cases.
All of this adds up to a federal power grab that might make even FDR’s New Dealers blush. But that’s just the point: Not surprisingly, a lot of folks in the land of Jefferson are taking a stand against an approach that stands to make an indebted citizenry yet more dependent on an already immense federal power. The backlash, already under way, is a prime stimulus for a neo-secessionist movement, the most extreme manifestation of a broader push for some form of devolution. In April, at an anti-tax “tea party” held in Austin, Governor Rick Perry of Texas had his speech interrupted by cries of “secede.” The Governor did not sound inclined to disagree. “Texas is a unique place,” he later told reporters attending the rally. “When we came into the Union in 1845, one of the issues was that we would be able to leave if we decided to do that.”
Polaris ImagesThousands of Texans hold a ‘Tea Party’ in downtown San Antonio in April protesting federal bailouts.
Such sentiments resonate beyond the libertarian fringe. The Daily Kos, a liberal Web site, recently asked Perry’s fellow Texas Republicans, “Do you think Texas would be better off as an independent nation or as part of the United States of America? It was an even split: 48% for the U.S., 48% for a sovereign Texas, 4% not sure. Amongst all Texans, more than a third—35%—said an independent Texas would be better. The Texas Nationalist Movement claims that over 250,000 Texans have signed a form affirming the organization’s goal of a Texas nation.
Secessionist feelings also percolate in Alaska, where Todd Palin, husband of Governor Sarah Palin, was once a registered member of the Alaska Independence Party. But it is not as if the Right has a lock on this issue: Vermont, the seat of one of the most vibrant secessionist movements, is among the country’s most politically-liberal places. Vermonters are especially upset about imperial America’s foreign excursions in hazardous places like Iraq. The philosophical tie that binds these otherwise odd bedfellows is belief in the birthright of Americans to run their own affairs, free from centralized control. Their hallowed parchment is Jefferson’s Declaration of Independence, on behalf of the original 13 British colonies, penned in 1776, 11 years before the framers of the Constitution gathered for their convention in Philadelphia. “The right of secession precedes the Constitution—the United States was born out of secession,” Daniel Miller, leader of the Texas Nationalist Movement, put it to me. Take that, King Obama.
Today’s devolutionists, of all stripes, can trace their pedigree to the “anti-federalists” who opposed the compact that came out of Philadelphia as a bad bargain that gave too much power to the center at the expense of the limbs. Some of America’s most vigorous and learned minds were in the anti-federalist camp; their ranks included Virginia’s Patrick Henry, of “give me liberty or give me death” renown. The sainted Jefferson, who was serving as a diplomat in Paris during the convention, is these days claimed by secessionists as a kindred anti-federal spirit, even if he did go on to serve two terms as president.
The anti-federalists lost their battle, but history, in certain respects, has redeemed their vision, for they anticipated how many Americans have come to feel about their nation’s seat of federal power. “This city, and the government of it, must indubitably take their tone from the character of the men, who from the nature of its situation and institution, must collect there,” the anti-federalist pamphleteer known only as the Federal Farmer wrote. “If we expect it will have any sincere attachments to simple and frugal republicanism, to that liberty and mild government, which is dear to the laborious part of a free people, we most assuredly deceive ourselves.”
In the mid-19th century, the anti-federalist impulse took a dark turn, attaching itself to the cause of the Confederacy, which was formed by the unilateral secession of 13 southern states over the bloody issue of slavery. Lincoln had no choice but to go to war to preserve the Union—and ever since, anti-federalism, in almost any guise, has had to defend itself from the charge of being anti-modern and indeed retrograde.
But nearly a century and a half has passed since Johnny Rebel whooped for the last time. Slavery is dead, and so too is the large-scale industrial economy that the Yankees embraced as their path to victory over the South and to global prosperity. The model lasted a long time, to be sure, surviving all the way through the New Deal and the first several decades of the post-World War II era, coming a cropper at the tail end of the 1960s, just as the economist John Kenneth Galbraith was holding out “The New Industrial State,” the master-planned economy, as a seemingly permanent condition of modern life.
Not quite. In a globalized economy transformed by technological innovations hatched by happily-unguided entrepreneurs, history seems to be driving one nail after another into the coffin of the big, which is why the Obama planners and their ilk, even if they now ride high, may be doomed to fail. No one anymore expects the best ideas to come from the biggest actors in the economy, so should anyone expect the best thinking to be done by the whales of the political world?
A notable prophet for a coming age of smallness was the diplomat and historian George Kennan, a steward of the American Century with an uncanny ability to see past the seemingly-frozen geopolitical arrangements of the day. Kennan always believed that Soviet power would “run its course,” as he predicted back in 1951, just as the Cold War was getting under way, and again shortly after the Soviet Union collapsed, he suggested that a similar fate might await the United States. America has become a “monster country,” afflicted by a swollen bureaucracy and “the hubris of inordinate size,” he wrote in his 1993 book, “Around the Cragged Hill: A Personal and Political Philosophy.” Things might work better, he suggested, if the nation was “decentralized into something like a dozen constituent republics, absorbing not only the powers of the existing states but a considerable part of those of the present federal establishment.”
Kennan’s genius was to foresee that matters might take on an organic, a bottom-up, life of their own, especially in a society as dynamic and as creative as America. His spirit, the spirit of an anti-federalist modernist, can be glimpsed in an intriguing “mega-region” initiative encompassing greater San Diego County, next-door Imperial County and, to the immediate south of the U.S. border, Northern Baja, Mexico. Elected officials representing all three participating areas recently unveiled “Cali Baja, a Bi-National Mega-Region,” as the “international marketing brand” for the project.
The idea is to create a global economic powerhouse by combining San Diego’s proven abilities in scientific research and development with Imperial County’s abundance of inexpensive land and availability of water rights and Northern Baja’s manufacturing base, low labor costs and ability to supply the San Diego area with electricity during peak-use terms. Bilingualism, too, is a key—with the aim for all children on both sides of the border to be fluent in both English and Spanish. The project director is Christina Luhn, a Kansas native, historian and former staffer on the National Security Council in Ronald Reagan’s White House in the mid-1980s. Contemporary America as a unit of governance may be too big, even the perpetually-troubled state of California may be too big, she told me, by way of saying that the political and economic future may belong to the megaregions of the planet. Her conviction is that large systems tend not to endure—“they break apart, there’s chaos, and at some point, new things form,” she said.
The notion that small is better and even inevitable no doubt has some flavor of romance—even amounting to a kind of modern secular faith, girded by a raft of multi-disciplinary literature that may or may not be relevant. Luhn takes her philosophical cue not only from Kennan but also from the science writer and physicist M. Mitchell Waldrop, author of “Complexity: The Emerging Science at the Edge of Order and Chaos.”
Fighting to Secede
From Texas to Hawaii, these groups are fighting to secede
American secessionist groups today range from small startups with a few laptop computers to organized movements with meetings of delegates from several states.
The Middlebury Institute, a group that studies and supports the general cause of separatism and secessionism in the U.S., has held three Secession Congresses since its founding in 2004.
At the most recent gathering, held in New Hampshire last November, one discussion focused on creating a new federation potentially to be called “Novacadia,” consisting of present-day New Hampshire, Vermont, Maine, New Brunswick, Prince Edward Island and Nova Scotia. An article highlighted on the group’s Web site describes Denmark as a role-model for the potential country. In the months following the convention, the idea “did not actually evolve into very much,” says Kirkpatrick Sale, the institute’s director.
Below the Mason-Dixon Line, groups like the League of the South and Southern National Congress hold meetings of delegates. They discuss secession as a way of accomplishing goals like protecting the right to bear arms and tighter immigration policies. The Texas Nationalist Movement claims that over 250,000 Texans have signed a form affirming the organization’s goal of a Texas nation.
A religious group, Christian Exodus, formed in 2003 with the purpose of transforming what is today South Carolina into a sovereign, Christian-run state. According to a statement on its Web site, the group still supports the idea, but has learned that “the chains of our slavery and dependence on Godless government have more of a hold on us than can be broken by simply moving to another state.”
On the West Coast, elected officials representing greater San Diego County, Imperial County and Northern Baja, Mexico, have proposed creating a “mega-region” of the three areas called “Cali Baja, a Bi-National Mega-Region.”
Hawaii is home to numerous groups that work toward the goal of sovereignty, including Nation of Hawaii. The group argues that native Hawaiians were colonized and forced into statehood against their will and without fair process, and therefore have the right to decide how to govern themselves today. In Alaska, the Alaska Independence Party advocates for the state’s independence.
There is also a Web site for a group called North Star Republic, with a mission to establish a socialist republic in what today is Minnesota, Wisconsin and Michigan.
A group of American Indians led by activist Russell Means is working to establish the Republic of Lakotah, which would cover parts of North Dakota, South Dakota, Montana, Wyoming and Nebraska. In 2007, the Republic presented the U.S. State Department with a notice of withdrawal.
Even for the hard-edged secessionist crowd, with their rapt attentiveness to America’s roots, popular texts in the future-trend genre mingle in their minds with the yellowed scrolls of the anti-federalists. “The cornerstone of my thought,” Daniel Miller of the Texas Nationalist Movement told me, is John Naisbitt’s 1995 best seller, “Global Paradox,” which celebrates the entrepreneurial ethos in positing that “the bigger the world economy, the more powerful its smallest players.”
More convincingly, the proposition that small trumps big is passing tests in real-life political and economic laboratories. For example, the U.S. ranked eighth in a survey of global innovation leadership released in March by the Boston Consulting Group and the National Association of Manufacturers—with the top rankings dominated by small countries led by the city-state republic of Singapore. The Thunderbird School of Global Management, based in Arizona, has called Singapore “the most future-oriented country in the world.” Historians can point to the spectacularly inventive city-states of Renaissance Italy as an example of the small truly making the beautiful.
How, though, to get from big to small? Secessionists like Texas’ Miller pledge a commitment to peaceful methods. History suggests skepticism on this score: Even the American republic was born in a violent revolution. These days, the Russian professor Igor Panarin, a former KGB analyst, has snagged publicity with his dystopian prediction of civil strife in a dismembered America whose jagged parts fall prey to foreign powers including Canada, Mexico and, in the case of Alaska, Russia, naturally.
Still, the precedent for any breakup of today’s America is not necessarily the one set by the musket-bearing colonists’ demanded departure from the British crown in the late 18th century or by the crisis-ridden dissolution of the U.S.S.R. at the end of the 20th century. Every empire, every too-big thing, fragments or shrinks according to its own unique character and to the age of history to which it belongs.
The most hopeful prospect for the USA, should the decentralization impulse prove irresistible, is for Americans to draw on their natural inventiveness and democratic tradition by patenting a formula for getting the job done in a gradual and cooperative way. In so doing, geopolitical history, and perhaps even a path for others, might be made, for the problem of bigness vexes political leviathans everywhere. In India, with its 1.2 billion people, there is an active discussion of whether things might work better if the nation-state was chopped up into 10 or so large city-states with broad writs of autonomy from New Delhi. Devolution may likewise be the future for the European continent—think Catalonia—and for the British Isles. Scotland, a leading source of Enlightenment ideas for America’s founding fathers, now has its own flourishing independence movement. Even China, held together by an aging autocracy, may not be able to resist the drift towards the smaller.
So why not America as the global leader of a devolution? America’s return to its origins—to its type—could turn out to be an act of creative political destruction, with “we the people” the better for it.
California Faces $21 Billion Deficit Next Year
SACRAMENTO, Calif. — California will face a nearly $21 billion budget gap over the next year and a half, extending a fiscal crisis that already has led to steep cuts to public schools, social services and health programs.
In a report Wednesday, the Legislature’s nonpartisan budget analyst pins the blame on the deep recession and poor decisions by Gov. Arnold Schwarzenegger and state lawmakers over the past year.
Many of the steps they said would patch previous budget deficits have failed, creating a $6.3 billion hole in the current fiscal year ending June 30.
Legislative Analyst Mac Taylor said the shortfall will expand to $14.4 billion for fiscal year 2010-11, forcing state leaders to make even more painful cuts.
The report does, however, suggest California’s economy is on the mend, but analysts don’t expect it to recover for another year or two.
A thriving economy sends more sales, capital gains and income taxes to the state. With a steep downturn, tens of billions in tax revenue evaporates.
The options for Mr. Schwarzenegger and lawmakers are limited to spending cuts, higher taxes or borrowing. Tax cuts and borrowing appear to be in disfavor after taxes were raised earlier this year and tens of billions of dollars were added to the state’s credit card during Mr. Schwarzenegger’s tenure.
Unless the governor and lawmakers reprioritize spending and add revenue, the state will face $20 billion deficits each year through 2015, Mr. Taylor warned.
The largest shortfall is projected to be $23 billion in the 2012-13 fiscal year, when the state must pay back billions it borrowed from local governments to cover this year’s deficit.
The report urged the Legislature to develop a long-term budgeting plan. Otherwise, California will teeter near the brink of insolvency as it did earlier this year when it had to issue IOUs, the report states.
Since February, California has made nearly $60 billion in adjustments over two fiscal years. Those have taken the form of cuts to education and social service programs, temporary tax hikes, and adding money from the federal stimulus package.
Copyright © 2009 Associated Press
Manufacturing Slows, Clouding Recovery
BY KELLY EVANS
A sharp slowdown in U.S. manufacturing activity last month, combined with weakness in producer prices, raised concerns that the economy’s nascent recovery is losing steam.
Production at U.S. factories, mines and utilities rose 0.1% in October, following an average 0.9% increase in the prior three months, according to an index released Tuesday by the Federal Reserve. Higher output at utilities last month partially offset the first decline in factory output since June, keeping overall …
Housing Starts Unexpectedly Fall
BY JEFF BATER
WASHINGTON — Home construction fell sharply in October, an unexpected drop that erased months of gains as uncertainty over renewal of a tax credit for home buyers increased builders’ caution.
Meanwhile, U.S. consumer prices continued to rise at a moderate pace in October, indicating that a slow economic recovery is keeping inflation contained.
Housing starts decreased 10.6% to a seasonally adjusted 529,000 annual rate compared to the prior month, the Commerce Department said Wednesday.
The report also said building permits slipped. Both single-family groundbreakings and apartment construction tumbled.
Economists surveyed by Dow Jones Newswires forecast a 1.7% increase in October …