Does it make economic sense for Texas to secede?
The investing and public policy worlds recently witnessed another example of this truism from Rick Perry, the Republican governor of Texas, who last week seemed to entertain the notion of his great state seceding from the U.S.
First, as background, let me state that I'm a Texan in spirit. I have colleagues and friends in public policy and journalism in the state, I've visited the state many times, and always enjoyed my stays. Moreover, one of the best journalists I ever worked with is a Texan, now living deep in the heart of Texas. As a rule, Texans are proud Americans – proud and loyal citizens of these United States and of the great state of Texas.
Perry hints secession is an option
That's why the remarks by Gov. Perry last Wednesday that came close to advocating that Texas secede from the United States strike me as economically self-defeating, as well as extreme, embarrassing, and based on incorrect premises.
Why would anyone want to associate themselves with secession? Certainly from an economic standpoint, as it relates to the south, it makes no sense. As of 2005, the South received $1.19 in federal revenue from every $1 in federal taxes it paid to the United States government, according to Northeast Midwest Institute data. (Curiously, another governor who has been known to castigate "big government" and "federal spending," Sarah Palin, (R-Alaska), is the head of another state that's a major beneficiary of federal spending: Alaska receives $1.83 in federal revenue for every federal tax dollar paid.)
Why is that the people who express zealous patriotism for the United States are often the same individuals who talk about seceding from it?
Some have rationalized Gov. Perry's remarks as aggressively playing to conservatives, noting that he's likely to face a tough re-election campaign versus U.S. Sen. Kay Bailey Hutchinson (R-Texas), who Perry is trying to portray as a moderate Washington insider. But in making references to a possible secession, what is Gov. Perry trying to associate himself with? The Civil War? Slavery? Perhaps racial segregation?
Political Analysis: I haven't reviewed any recent public opinion polls from Texas, but my hunch is that most Texans are proud to be citizens of the United States and would oppose secession. Further, many sympathetic observers see Gov. Perry's remarks as an embarrassment. They're also a slap in the face to the enormous contributions Texans have made to the union, including the contributions of, arguably, Texas' greatest citizen, President Lyndon B. Johnson. Dr. Martin Luther King led the fight for desegregation, but there would not have been a Civil Rights Act of 1964 and a Voting Rights Act of 1965, and many other Great Society programs that advanced the American civilization and economy without the work of LBJ. How anyone – let alone the governor of Texas – could make a comment contrary to the achievements, work and spirit of President Johnson, is beyond me.
Financial Editor Joseph Lazzaro is writing a book on the U.S. presidency and the U.S. economy.