Friday, January 29, 2010

Secession's Bad Name

Sometimes the success (or lack thereof) of an idea has less to do with the merits of an idea and more to do with the people who espouse it. We might reason that "better" ideas are embraced by "better" people, but that's only true to a degree. There's little reason to trust a doctor or a scientist's point of view on politics implicitly, for instance, though they might be brilliant in their specific niches. Perhaps the most dangerous thing for an idea is for it to become associated with disreputable people or organizations. Undoubtedly communism has gone out of vogue less because of anything that Karl Marx or Friedrich Engels actually wrote and more because what dictators like Josef Stalin and Mao Zedong actually did while in power. You can certainly be a card-carrying member of the Communist Party and not believe in mass murder, but it's difficult for any movement to survive being taken over by evil on such a scale.

In the United States, secessionism is also a severely tainted political ideology. I think it's fair to say that Americans are opposed to secession by default largely because they are opposed to the practice of slavery. Secession is still viewed through the lens of the Civil War; secessionism as an idea still stinks of the Confederacy. On the other hand, many Americans who are opposed to secession by default quite avidly support the idea of a Palestinian state or of a Free Tibet which are essentially secessionist movements; neither is it unusual for an American to believe the American colonists were justified in breaking away from Britain while at the same time refusing to seriously consider the prospect of a state legally breaking free of the United States.

As a general rule, I think people should have the right of self-determination. So, I tend to be "pro-secession" to the extent that I think there ought to be political mechanisms in place to allow people to break away from the state if there is a widespread desire to do so. It shouldn't be easy to secede, but it also shouldn't be impossible. I think it's healthy when Quebecois are allowed to vote to decide if they want to stay a part of Canada or forge ahead on their own -- they should have the right to make that decision. If the Catalonians, Scots, Tibetans, or Uighurs want to have their own nations, I also see no reason why they shouldn't. Unfortunately, it goes without saying that sometimes people will seek secession for less than noble reasons. For the most part, today's secession movements around the world seem to be tied to preserving a culture, language, or religion -- they are motivated by the desire to protect some of the most basic human rights. If we accept that all people have the right to self-determination, though, we have to accept that secession will sometimes lead to bad consequences. I would never claim that the Civil War was entirely motivated by slavery, but undoubtedly one of the consequences of secession would have been a continuation of the practice of legal slavery in the southern states, at least for a time. It's hardly surprising that China attempts to brush aside calls for Tibetan independence by villifying the feudalism of old Tibet -- the state is trying to argue that Tibetans shouldn't have the right to self-determination because they don't know what's good for them and want to go backwards. If you truly believe in self-determination as a concept, however, you also believe that people should have the freedom to make mistakes.

Many also oppose secessionism for purely practical reasons. Without a doubt, smaller nations tend to be more vulnerable to invasion. While individual areas like Venice and Genoa and Bavaria lost tremendous influence by the unification of Italy and Germany, these massive states became military powers in their own right, much more able to defend themselves against attack as well as perpetrate attacks on other nations. If every city in the world suddenly became free tomorrow, there might well be a flowering of culture and commerce as each city developed internally, but as soon as two cities formed a confederation the trend towards incorporation by force or coercion would likely begin anew. Additionally, secessionists, often motivated by pure emotion, don't always consider political matters like access to sea ports or land barriers that will surely help determine the future success of the nation they are trying to form when they are in the process of fighting for freedom. As I see it, these practical concerns will come to the fore if secessionism is treated less like a criminal act and more of a political issue to be debated. Although the independence-favoring Scottish National Power is narrowly in control of Scotland, Scottish secessionists face an uphill battle in even getting a vote on independence largely because of the reluctance of Scottish voters to break away from the rest of the United Kingdom and no longer be a part of a world power. If even the Scots aren't sure they want to break their union with their historical enemy England of all nations, then I think we can rest assured that legal secessionism is unlikely to create millions of microstates any time soon. At least the Scots can choose their own destiny (or at least influence the process), though, unlike the Uighurs and Tibetans. Amending the constitutions of the world to provide a clear legal path to secession, with definite (difficult but achievable) requirements set in place, would be a positive development in my view. In the United States, the law is already biased against secession, but I sincerely hope that Americans wouldn't treat a modern Texas independence movement (just to give a wild example...) as China treats the Tibetans.

Saturday, January 9, 2010

Gauging the Success of the Stimulus

I have a different take on stimulus spending than many. I don't really think it does all that much good to the economy in and of itself -- I think instead that its primary benefit is psychological. Remember, stimulus spending is typically a one shot deal...it is by its very nature not sustainable and even the largest of stimulus packages is going to be small compared to the size of the overall economy. Thus, I think the best stimulus package is the one that is as small as possible yet is still capable of instilling new confidence in the nation's entrepreneurs, investors, and consumers. From this perspective, I felt uneasy about the stimulus package that Congress actually passed and President Obama signed in 2009. I thought it was simply too big and another nail in the coffin for America's finances. After reading the American Recovery and Reinvestment Act for myself, my concerns multiplied as much of the spending seemed geared not towards short-term economic growth but rather damage control for public institutions to help them survive the downturn.

As 2010 begins, I think we can see the stimulus bill was rather a mixed bag. It worked fantastically in terms of calming the jitters of investors. The stock market had a fine 2009 and recouped much of its losses suffered during the previous year. That in turn means that publicly listed companies have renewed access to the money raising engine that is the stock market, that large and small stock investors alike are making money, and that retirement accounts are looking much healthier . On the other hand, unemployment remains very high. The country returned to economic growth in the last quarter, but it's rather anemic growth and nothing to get too excited about. Undoubtedly, the ARRA did save many public jobs as state and local governments struggled with budget shortfalls, but the Boston Globe did some fantastic research to expose how flawed some of the jobs numbers reported really were. In many cases, jobs seem not to have really been created but rather retained instead -- in some cases, the money seems to have been downright misused, having been used to give raises to existing employees which hardly seems necessary in this economic climate. The infrastructure spending component of the stimulus has been a downright disappointment; the slow speed in getting these projects off the ground has really limited the effect it has had on unemployment. In fact, that slowness has made me question the value of infrastructure spending as stimulus at all...I'm as big a fan of good roads and strong bridges as anyone, but stimulus spending is supposed to have a speedy impact on the economy.

The fundamental problem with stimulus spending as damage control may be really exposed this year. It's quite possible that state and local governments, still facing revenue shortfalls, will be forced to cut even more jobs after they go through stimulus funds. It would've been far better to have stronger economic growth and lower unemployment at this point even at the expense of many public jobs as governments could easily start hiring again once tax revenues recovered. Instead, it looks like the stimulus may have little lingering effect on the economy and calls for a second stimulus will surely continue to be heard. (I expect any "jobs bill" that gets passed will in effect be a second stimulus even if it isn't called that.)

Ultimately, I feel that the biggest failure of the stimulus is that it didn't quite improve confidence enough. It worked for the stock market, but it didn't encourage people to start businesses or start hiring more workers. Did it need to do more to specifically encourage entrepreneurship or hiring? Maybe...that couldn't have hurt. However, I also think the stimulus package became something of a victim of President Obama's ambitious overall agenda. The debate over health care reform in particular has created a lot of uncertainty; arguably, the specter of cap and trade has created just as much uneasiness in the business community. In a way, it's not even so much the particulars of the proposed legislation that has the chilling effect on the economy -- it's the uncertainty and the fear of what MIGHT be enacted and the tax increases that MIGHT be coming. Had some form of health care and climate change legislation been passed quickly (which I doubt would have been even possible given the fractious political environment), I think the economy might have improved quicker. Instead, we've had lingering, paralyzing uncertainty. Ultimately, I suspect the economy would have fared better had the government focused on it ahead of all other priorities, but Obama and the Democrats didn't want to lose the opportunity to pass what they viewed as very important legislation. What they do in 2010 is going to be interesting to see. It's an election year -- do they dare tackle immigration reform as has been whispered or is this the time to focus squarely on the economy? First, however, they STILL have to finish with health care and cap and trade, though.