California’s Three State Idea Is The Wrong Solution – Just Like The Euro In Fact


There’s long been an idea that California is simply too large to remain as an individual and the one state. Instead it should be split up into smaller and more manageable units. The basic thought being that Federalism works, that there are things better managed at more local levels, those others better done at national. A fine idea of course. But California is too many people to be run, as it is, as one of those local authorities. Thus it should be split up into those which make more sense as those local governance units.

There’s a great deal of sense to this. As well as the inevitable politicking. For example, if we slice the state up this way then we get 6 D senators, if we split it up that way maybe 2 or 3 R and others D and so on. But let’s leave the politics aside and think of the efficiency, or economic, arguments. This is the wrong solution:

The proposal is for California to split into three separate states – Northern California, which includes San Francisco, Sacramento and San Jose; Southern California, which includes San Diego; and California, which includes Los Angeles. The new states would later be allowed to change their names.

They’re going to split it on north south lines. But California’s division don’t work that way, not at all, they’re very much more on east west lines. Thus this, the original 6 state solution, is very much better:

A better idea

That’s not perfect either but it is better. Splitting the state according to some reasonable recognition of economic areas. It’s in this sense that CA currently is like the euro, the imposition of a one size fits all solution onto highly disparate economies.

Take the minimum wage for example. There’s no way that there’s not going to be a state minimum wage in California. It’s also going to be set by the more vocal idiots in the coastal areas. And yet – assuming that there even should be a minimum wage or that there could be a correct rate for it – a minimum set by such fools for such circumstances is going to kill certain of the inland areas. Again with the euro comparison, imposing the same interest rate – one monetary system does require this – upon the disparate economies of some 400 million people is just dumb and horribly harmful. A minimum wage set for San Francisco is going to crap all over the unemployed in El Centro.

As, in fact, it does. Here’s the list of unemployment by metropolitan area for the US. You’ll note that 8 out of 10 of the worst places are in California. They’re also all inland, away from those coastal areas which set that minimum wage “too high”.

A much better idea than this three state solution is the six state one, one that actually pays at least more than a passing interest to splitting the place up along the lines of economic areas. So that policies can be varied according to those economic conditions of course. That’s the argument in favour of splitting in the first place and simple division by north and south doesn’t produce a solution to the original point.

Right idea, bad implementation so far.

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