Wednesday, November 14, 2012

How to identify secession: Quebec/Texas edition

65,000 Texans love their country so much that they want to secede from it. Proclaiming:
“Given that the state of Texas maintains a balanced budget and is the 15th largest economy in the world, it is practically feasible for Texas to withdraw from the union, and to do so would protect it’s citizens’ standard of living and re-secure their rights and liberties in accordance with the original ideas and beliefs of our founding fathers which are no longer being reflected by the federal government.”
Secession movements are nothing new. Quebec has been trying to break off from Canada for decades now. Unlike the  rational-sounding (yet misleading) proclamation above, the people who push for becoming a sovereign nation often do so out of emotions of nationalism. They put practical considerations aside. They have to. Because the planning necessary for such a move is enormous. If you meet a separatist, ask them how they plan on going about: establishing a new currency, issuing debt, managing inflation, putting taxes into place, raising a military, negotiating new treaties, etc. 

Oh yeah, there is that pesky thing about transfer payments too...

Foremost though, ask them whether they think that their former countrymen will pick up their phone calls. I bet you that the President of the US will not be too keen on talking to the President of Texas. Nor will the Prime Minister of Canada be too keen on speaking to the Prime Minister of Quebec. Those relationships will be terse to say the least.

Putting all of that aside for a moment. How will you know a secession is coming? Here are three easy ways to identifying that a separatist movement in about to succeed (pun intended).

1) Secession becomes the single issue on the ballot. Nothing else will matter if secession takes place. Literally. All debate and policy-making over topics such as education, health care, infrastructure, etc will grind to a halt.

The election will delve into a two-party system of the Federalists who want to stay versus the Separatists who want to go. There will be no confusion over this point.

Quebec voted in the Parti Québécois into a minority government in this past election. The only meaningful difference between the Parti Québécois and the New Democrats is that the prior is for secession and the latter is against. If it wasn't for third parties, then secession might actually be going forward. Another example: Greece, one party was for staying in the euro-zone and the other was for leaving.The staying party won. Thankfully.

In other words, it is such a huge decision that it will come to dominate politics.

2) Capital flight and outward migration. Money and people are going to leave. In large numbers and very quickly. Many companies and people are not going to want to take part in this grand experiment. They want the stability and safe-haven of Uncle Sam. They don't want to throw everything up into the air and start over.

In other words, they want to be Texans living inside America, not Texans out on their own. They want to be Quebecois inside Canada, not out.

As people and companies leave, they will sell whatever they have to leave behind - which will be a lot. Think of all of the expensive military hardware that end up being left behind in Iraq, because it was just not worth it to bring it home. In these cases, home is not as far away. But what about houses that can not move and all of the consumer products inside those houses that isn't worth moving?

Prices will plummet and the real estate market will take a tumble in a way that will make this current recession look like merely just a rainy day. Some analysts predict a break-up of the euro-zone would mean GDP (and therefore quality of life) would fall approximately 40% across Europe. Unemployment will jump well above 20%. Maybe even twice that.

The economy will stabilize and recover in time, but not before it goes through a world of hurt.

3) Devolution within the secession movement. Once this ball starts to roll, it becomes pretty hard to make it stop. Countries break into multiple pieces. Not just one. It will not be a clean break. Think of the former Yugoslavia, which is now Bosnia, Montenegro, Serbia, Slovenia, Macedonia, and Croatia. This former Communist nation didn't easily split into 6 pieces over night, but did so over multiple decades and much violence.

Not to say that there will be Civil War in the Western Hemisphere if they choose to leave. After all, they are much more homogeneous in terms of identity than Yugoslavia ever was. But it will not be as simple and easy as anyone thinks it will be. Pieces will break off

Who says that northern Quebec won't find it to be a better deal to stay in Canada? Or that Montreal wants anything to do with Quebec City? Or that the indigenous tribes won't strive for their own nation at the same time?

Who says that the financial capital of Dallas won't find it a better deal to be within the same currency zone as the US? Or that the conservative oil-port of Houston will want anything to do with the liberal artists of Austin? Or that the Hispanic majority of south and west Texas won't strive for their own nation at the same time?

Conclusion: It will be messy. It will be chaotic. It will not happen. But if these things start to happen, then you know at least people are being serious about it. Until then, they are just blowing hot air.

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