Economy

State's Rights: be careful what you wish for

My friend Mike, recently retired editor of a major newspaper, writes:

Luckily Scalia and his pals were in the Supreme Court minority on the Arizona immigration ruling, but his logic is scary:

Justices Antonin Scalia, Clarence Thomas and Samuel A. Alito Jr. each filed dissents. Scalia went the furthest: “As a sovereign, Arizona has the inherent power to exclude persons from its territory.”

Carried to the next logical step, it seems Alabama could exclude blacks if its legislature took a notion to do so.

Well, now, that certainly begs the question, “What if we did carry it to the next logical step?” That is, “What if every state were allowed sovereignity and could do as they pleased?”

That’s certainly not what the Founders intended, or they would have not have replaced the original Articles of Confederation with the Constitution. But you have probably noticed, as have I, that modern conservatives, especially those on the Supreme Court, have a highly flexible approach to interpreting the Constitution–taking the narrowest and most literal view possible of some clauses (like the Second Amendment) and just making shit up (like the sovereignity of states) the rest of the time.

Anyway, it’s thought experiment time here at S&R. What would (or will, given current trends) a U.S. with the broadest possible interpretation of states’ rights look like?

First of all, if every state could do as it pleased, it’s a fair bet that most would decline to pay the federal government more than they get back. This would be a big problem for the Red States. Last year the Economist tallied up the taxes paid and federal funds recieved for every state between 1999 and 2009. What they found was that the Blue States paid in over $3 trillion more than they got back, while the Red States recieved $2.4 trillion more than they paid. If the current wealth transfer from Blue to Red were halted, the economic effects for the Red States would be severe. Take for example Mississippi, which gets 4 times its GDP from the federal government. It’s hard to see how Mississippi would have roads, schools or much else if that money were removed.

Of course, Tea Partiers might well claim this is the result of wealth transfers (translation: the South has more black people). That’s nonsense of course, because AFDC is only a small component of those transfer and blacks only get about 40% of AFDC payments. Much of the wealth transfer goes to white people, particularly old white people, through Social Security and healthcare programs. But states like North Dakota and Montana are deep in the red, too, (in both senses of the word) because farmers get huge handouts.

Under a state’s right’s paradigm, the economies of the Red States would be severely effected.

The second likely implication is that the Red States would implement a series of draconian social laws that would limit abortion, gay rights, civil rights for people of color (through voter ID laws, etc.) and would discriminate against Latinos and Hispanics. Right now, despite the kvetching, the Red States are relatively livable for non-whites, gays and liberals because the umbrella of Federal law prevents widespread and active discrimination. However, as I pointed out in a recent post, when that umbrella is not in effect, as immediately post-Reconstruction, history suggests that the South at least will institute repressive laws quickly. In the early 20th century, 6.3 million blacks moved from the South to the North to escape discrimination, lack of economic opportunity and lynching. It’s likely we’d see the same today.

Obviously, there are many in the South who would not regard that as a bad thing. But that’s not the only exodus we’d see. If the teaching of true science were severely curtailed, we’d also see a brain drain to the Blue States. It’s also entirely likely we’d also see an exodus of all those car companies the Red States are so proud of. Obviously, the trend is for car companies to put factories in their largest markets and the Blue market is bigger than the Red market, by about 25%. For the most part, multinationals do not want to have plants in places where their executives get harassed by police and discriminated against in housing.

This would likely compound the economic problems the Red States would face as a result of the end of fiscal transfers from the Blue States. And it could be compounded further if the Blue States chose to institute protectionist legislation, for example to protect its auto workers and farmers. Depending on the degree, i.e., whether the Blue States slammed a tariff on all Hondas or just those made in the South, it could have varying effects. Over the long term of course, protectionism hurts everyone. But over the short term it would decimate the Red States and boost the Blue States.

In other words, if we really were to go with state’s rights, the economic effects would be devastating for the Red States. It is very likely that the western half of the Confederation of Red States would empty out, and given its long tradition of cronyism and corruption, the southern half of the Confederation of Red States would effectively become a third world nation.

5 replies »

  1. Damn. I wonder just how close the Court will come to letting it happen. …

    Thoughtful post. Thanks.

  2. It’s probably already happening. While ‘the next logical step’ has not been taken all the way, each of the states mentioned has already passed ‘draconian’ laws of some type. Executives have already been pulled over and harassed. I would guess the downward spiral will continue, particularly if successful blue states use every means possible to supply health care to their citizens while red states do the opposite.

    Scalia et al do not need to ‘win’, because there is a large faction of governors who are true believers.

    nalbar

  3. I can’t silence the part of me that actually WANTS some of this to happen. As bad as it would be in the short term, it would force us to eventually enact some serious permanent fixes that we don’t seem to be getting to as it is.

  4. But don’t the red states also largely staff our armed forces? Another possible consequence of your scenario is a Red-Blue war won by the Reds, who then impose their vision of righteousness on the rest of us.