Monday, October 31, 2005

On the idea of having allowed the South to secede without the civil war, and whether the US would be better off without the South right now...

The truth is as far as the federal government is concerned, the north-eastern states are net losers in the equation. In all studies done on where federal money is spent it has been shown that the northern states contribute more than they receive and the southern ones receive more than they contribute. This is based on data collected by the Tax Foundation. According to the data for every dollar of federal taxes levied on New Jersey, the state gets 57 cents back in federal funding and contracts. In similar situations are New York, Massachussets and Connecticut.

In addition I really do not see what difference it would have economically. The most likely case is that there would be some sort of EU style economic union, or at least a NAFTA style free trade agreement. So whatever the value the Southern states have economically would not be lost were there to be an amiable parting of ways.

So what if there are major companies in the South? Are they going to stop selling their products in the North or are they going to stop sending dividends to their shareholders in the North?

As far as mentioning Berkshire Hathaway... Since when has Omaha, Nebraska been in the South anyway?

You argue that there are bright lights in the manufacturing sector in the south.. You surely know that the reason for this is because factories in the South often employ lower-waged non-union labor. Oil and natural gas are in any case sold at prices set at a global level as West Coast oil prices after Katrina demonstrated.

Yes America would be weaker militarily and I have already argued that the current military posture is not necessary and even unsustainable. Yes America would have a smaller gross GDP, though I fail to see this having a major negative impact on the lives of the citizens of America.

I was thinking that the South should have been allowed to secede 145 years ago, but if we were talking about today then if anybody should secede its the North-east. Let the United States keep the debt and the defense commitments. There would finally be a functioning 2 party republic, or even better a parliamentary system with a pm. Its not like there are no reasonable Republicans - Senators Snowe, Collins, Specter and Chafee are all from the north-east. The only independent (formerly Republican) senator - Jeffords - is from Vermont. How does the Federal Republic of America sound? (NY,NJ,CT,PA,MA,RI,NH,VT,ME,DE,MD) = GDP of $2.67 trillion = 4th in the world. Population: roughly 60 million. GDP/capita roughly $44,500...

The question is basically, with an economic union established, what value does a political union have if views on all issues are so far apart?


Blogger E$ said...

Speaking historically, an economical "union" is never complete without a political union. Having the US as a NAFTA partner has not endowed Mexico with a say in world markets. Similarly, the EU is riven with different countries pulling in different directions (France's insistence on agricultural subsidies, job protectionism among the old members at the expense of the new, all impede the free movement of people and goods, which is the definition of economic integration).

Ok, Berkshire would have been in a free state, WalMart would have been in the South.

In a historical perspective, the US' success on the international arena has been because of its size and unity. Had a loose union of two countries been able to win the cold war? Win World War II?

Could it be that the reason why the Northeast has been unable to enforce its political rights is because the unions (with their inflated salaries, and the welfare state that they advocate) are driving the democrat agenda right off the leftist cliff?

12:25 PM  
Blogger Bubba said...

More recent history has shown a decline in the importance of political integration in regards to trade matters. The EU, though slow to integrate on the political aspects, has moved rather more quickly on economic integration. A free trade zone, a common currency (excl. UK) and cooperation on many other projects have created an economic union in Europe. Neither agricultural subsides, nor job protectionism themselves impede the free movement of people (did you mean labor?) and goods.

Mexico has a say in world markets through its participation in the WTO. Its participation in NAFTA gives its producers access to the markets of the United States. Again, political integration is not a prerequisite for economic integration as the European model clearly shows.

There was a very simple reason the South lost the war in the first place. It was industrially underdeveloped and had a significantly smaller non-slave population than the North. I am not sure how much such a region would have contributed to the war effort in World War 2 or during the Cold War. In any case it is hard to to argue on the theoretical historical questions of what would have happened on a world scale had the South been allowed to secede. It is obviously easier to notice the problems that arose from the fact that it was kept in the Union.

As for you last comment about a 'democrat agenda right off the leftist cliff'. First let me say that Limbaugh, Hannity and Rove would be proud of such a remark. Second, the democrat agenda in the United States is only advocating things that have been policy in most civilized countries world-wide for the better part of half a century. Seen in such context it is hard to argue that such an agenda is unreasonable, and definately not being driven 'off the leftist cliff'. In addition, if one does polling one would notice that Democratic positions on issues such as a national health care system are supported by the majority of the population. The reason why the Northeast has 'been unable to enfore its political rights' is because while in the North-east the debate usually hinges around socio-economic issues, in the South and mid-West the debate is consistently driven by religious fundamentalists towards 'cultural issues', meaning secular-religious ones, with the fundamentalist Republicans succeeding in getting majorities in those states. The Democratic agenda, whose base is in the North East and the West, thus has little appeal outside of these areas. With the decline of organized labor the Democratic Party also doesn't have a major support base of volunteers, voters, and resources something provided to the Republican Party through its alliances with corporations and religious fundamentalists.

2:13 PM  
Blogger E$ said...

The population of the South, as defined by the US census was 100.2MM in April of 2000, as compared to 53.6MM in the Northeast. I also assure you that the economic impact of the Southern states is also much greater than that of the Northeast. Even making the assumption that the South had grown faster than the rest of the country during the last 60 years, it is impossible to argue that it did not have an outsized contribution to all of the US war efforts to date.

Last time I checked, I was not a religious fundamentalist, and am certainly not a major corporation. So why is it that I am not a Democrat? My statement re the leftist cliff was merely intended to summarize the Democrats' performance in the polls.

There is a vast number of reasons that the Democrats are losing power. (Note that Ohio - the "swing state" that sealed the deal last November is hardly part of the bible belt.)

The main reasons that Democrats have been losing are precisely those that you described as being "policy in most civilized countries." The last time a national healthcare system was widely entertained (during the Clinton administration) the idea's collapse was precipitous and highly public. It was simply not supported by the public.

Perhaps the reason that the US is, and has for a number of years been, the fastest growing civilized economy in the world is because while the Democrats are busy making a large stink about 'ultraconservative cultural issues,' the Republicans have been quietly cutting taxes, introducing legal reforms, and dismantling the environmental juggernaut built during the Clinton administration.

3:56 PM  
Blogger Bubba said...

If we were talking about the impact of the secession of the South on the ability of the USA to fight WW2 or the Cold War then you do have to look at the historical contribution of the South to the USA. When one talks about the seccession of the South, then one does not only look at the Northeast in estimating the impact on national industrial production and population figures. For example, I am sure you know that much of the might of US industrial production was based in the Great Lakes Union states such as Illinois, Michigan and Ohio. As such, in those pre-de-industrialization days during the period of WW2 the South only supplied roughly 12% of the gross GDP of the United States. As far as population goes, I am sure you know that the population of the South has grown by leaps and bounds since 1945. For example, Florida has gone from roughly 2 million to 17 million and Texas from roughly 7 million to 21 million. In comparison NY only grew from 14 mil to 19 mil and Pennsylvania from 10 mil to 12 mil. Fact is that the population of the South has roughly tripled since the end of World War 2. Another interesting tidbit is the fact that the economy of the South didn't recover from the Civil War until World War 2, so its economic impact was even smaller than its share of the population. That area is still less wealthy than the North. The GDP of the Confederate states currently is about $3.5 trillion vs roughly $2.6 trillion fo the Northeast. I also see little reason to believe that its contribution to war efforts has been 'outsized'.

Last time I checked you considered yourself a libertarian. Not a religious fundamenalist, but an extremist nonetheless. In the Northeast there does exist a Republican party and it wins local elections quite often. They do so by taking relatively liberal positions on social issues, the kind of positions that would have them run out of town in much of the South. They in fact mostly play the same politics as Democrats and run on socio-economic issues. However in order for the Republican party to win nation-wide elections they have no choice but to pander to voters more interested in 'cultural' issues that dominate the South. There is thus a major disconnect between local north-east Republican politics as represented by Whitman, Guilliani, Chaffee and Snowe and the national Republican organization.

I already said why I believe the Democrats are losing. You probably also know my opinions on the brilliant idea of cutting taxes when there is a major government deficit and a war going on. Interestingly the same Republicans that were going on 10 years ago about 'smaller government' and 'lower taxes' seem to have generally forgotten about that first part. Does that seem reasonable to you? Less taxes, more government. Good slogan?

The health care reform program as proposed by Clinton was barely feasible. It would basically force all companies to provide medical insurance to all employees. It was cumbersome and died quickly. Obviously for small businesses it would have been quite problematic. What Clinton proposed was hardly a national health care system but some sort of nightmarish compromise. A publicly funded univesal health care system actually has very wide support. Something reasonable that could work in the US might look like this.

8:10 PM  

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