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Calexit: The Future of CA's Secessionist Movement | Woodbridge Wealth

02 23 2017

Calexit: The Future of CA's Secessionist Movement | Woodbridge Wealth
The first few weeks of Donald Trump's presidency have been tumultuous, colored by a string of executive orders, appointments, and roiling waves of opposition. But three months after clinching an Electoral College win against democratic opponent Hillary Clinton and just weeks after being sworn in as the 45th president, all eyes are on the four years ahead - and Trump's turn at leading the fifty United States of America. Or 49, if the Yes California Independence Campaign has their way.

They have a simple goal: The state of California's secession from the U.S. and reformation as an independent nation.

What is Calexit?

The grassroots movement has been making headlines since Election Day, so we bet you've heard of it: Calexit.

Its aim is actually a bit lower than establishing the Independent Republic of California. Rather, their intention is to qualify a "citizen's initiative" for California's 2018 ballot that, if passed, would allow Californians to vote in 2019 for or against the state's independence from the U.S. After an unprecedented 2016 and a rocky start to 2017, including similar votes such as Brexit which separated the United Kingdom from the European Union, could Calexit really happen?

Sorry, Calexiters. It won't. Here's why.

The History of U.S. Secessionist Movements

The Calexit movement isn't the first to take place in the United States; it's just the most recent in a long list of unsuccessful secessionist attempts in our nation's history.

It could be argued the only truly successful secessionist attempt in the history of the United States is what started it - when in 1776, British America penned the Declaration of Independence and fought the Revolutionary War for the following:

"[It] is the Right of the People to alter or to abolish [the Government], and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness."

Since the birth of the United States, there's been only one seriously asserted threat of secession, when in 1861 several southern slave states formed the Confederate States of America, or CSA.

Of course, the Civil War ultimately failed - the CSA was never even officially recognized by any other nation. Outside of that, a few scattered attempts have been made by states such as South Carolina and Texas for varying reasons. They've all been unsuccessful. So why the media fuss now?

Calexit vs. Texit

What makes the prospect of a Calexit vote so interesting to the public is how it seems to be a partisan reaction to Donald Trump's presidency. In actuality, Yes California has been around for two years; the campaign's vice president and co-founder, Marcus Ruiz Evans, told the LA Times that the group had been planning to wait for a later election - Donald Trump just sped up the timeline.

However, California isn't the only state to have gained national attention for secession proposals down party lines. Secession attempts may be rare, but secessionist ideals are not.

Case in point: Texas.

Advocates for Texas' independence sprouted up a handful of times during President Barack Obama's administration, with more momentum building at the prospect of a Clinton White House in 2017. Texas certainly plays the opposite side of the political spectrum, being one of the largest states and just as resoundingly red. But just like Texas, folks hoping for an "Independent Republic of California" would have to beat some impossibly high odds.

Legal Roadblocks to a Calexit

The defeat of the Confederacy all but signaled the defeat of a legal path to secession. What makes a Calexit or a Texit different from Brexit is that the EU has exit protocols in place should a nation wish to exit. The U.S. Constitution covers the admission of new states, but not their departures.

Texans cling to the idea they could secede largely because, between its independence from Mexico and its annexation to the United States (1836-1846), Texas was its own country. Its constitution therefore has unusual provisions (at least for a state constitution)-it can divide itself into up to five total states should it choose, for instance-though it still can't split from the U.S.

Calexit experts know this means a constitutional amendment would be California's only true course of action. This is how they would have to get there:

1. Garner the necessary signatures to get the initiative on the state's 2018 ballot. (For reference, this is where the movement is currently.)
2. In the subsequent 2019 referendum, win a clear majority.
3. Either send a California delegate to propose a constitutional amendment to be approved by 2/3 of the House of Representatives and 2/3 of the Senate or call for a convention of the states to propose the amendment and be approved by 2/3 of the delegates to the convention.
4. In either case, if the amendment is passed, it would need to be accepted by three-quarters of the states (38/50 state legislatures) to be adopted.

The wishful thinkers of Yes California are actually aware that legal secession is all but impossible. As Evans told the Sacramento Bee, "Our goal is to get to a tipping point. Our point is to prove there's a market."

Should California beat the odds and find that market through a Calexit, the implications would be unlike anything the U.S. has seen.

Implications of a Calexit Victory

Yes California has made a comprehensive, though speculative, primer for how it would make the transition to independent nationhood. Unfortunately, these implications would make Calexit a tough sell nationally should it ever reach that stage.

1. California's Economic Effect

Stiff trade and tariff policies will make things incredibly difficult for small and medium sized businesses who sell nationally, both in and out of California. However, larger companies such as Apple, Google, and more are already practical necessities for U.S. consumers and have influence in other states and nations, so it will make little functional difference whether they reside in a foreign country or not.

While in terms of GDP, the U.S. is the largest economy in the world, but even held up against other nations on the list, the state of California ranks 6th (below the UK and above France). In fact, the U.S. would stand to lose about 13% of its GDP should Calexit succeed - and create shaky markets all around. Not a rosy outlook for the other 49 states.

2. Taxes after Calexit

Organizers of the Yes California campaign frequently cite that California and its citizens pay more funds to the U.S. government than they receive from the U.S. government - this severance would have impacts both on California and the United States.

California's savings in federal taxes would need to be diverted to state taxes, since it has plans to provide more robust Medicaid-style programs and other social services. How does a state transfer federal programs to state-level ones without too much burden on its citizens? One expects a rocky transfer, but a doable one. Meanwhile, necessary federal tax increases across the nation provide more fuel for states to push back on Calexit.

3. California Immigration

Immigration policies in the Independent Republic of California would almost certainly differ from policies of the U.S. After all, the progressive body of politicians and more diverse voter base would have reason to push for more welcoming legislation.

However, California's more open immigration stance might drive conservative U.S. lawmakers away from supporting Calexit, fearing California could become a path for undocumented immigrants to enter the rest of the U.S.

4. California and Foreign Relations

At its core, Brexit was an isolationist move - UK's withdrawal from the European Union. The same would be true with a Texit, which would be removing itself from federal authority and a nation whose ideological median falls to the left of the state's far right values.

California's appears to be more of a globalization attempt, pulling away from a more-right nation to become a global player. Yes California has plans for the fledgling nation to enter international organizations such as the United Nations, the G8, the International Criminal Court, and other international organizations. For many states, this could read as an attempt to usurp the federal government - which wouldn't win anyone over.

5. The Future of U.S. Elections

Yes California's assertion that the U.S. is a Center-Right nation isn't wrong. The removal of California's electoral sway would be detrimental to American progressives, just like Texit would be for conservatives. Should California exit, we'd feel reverberations in the White House for many years to come.

Congress would find its way to equilibrium more quickly, since there is already a precedent for the adding and apportionment of representatives. Nonetheless, a deeply divided Congress might not bite - Democrats would fear more power loss, and Republicans would hate the idea of California getting its way.

Should Cal Exit?

Calexit would be more beneficial than harmful to California in the long run, and that's exactly why it won't happen. Not only is it a legal implausibility, but the U.S. doesn't really love change that much, or at least not this kind.

Perhaps a movement doomed to fail may start just the conversation it seeks to: One about, as they see it, continuing to improve The Great Experiment - over two hundred years in the making.

As for now, the path to the Independent Republic of California looks grizzly.

This article is a part of our complete guide to investing in real estate, a comprehensive resource for anyone looking to invest in real estate. Read more here.

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