In(ter)depence Day

By | June 30, 2016 at 3:32 am | No comments | Columns, Haddon Libby

By Haddon Libby

Interdependence or independence?  This is the issue that the United Kingdom voted on June 23rd.  While we all recognize the beneficial value to working as part of a group, giving up independence is a tough sacrifice for most of us.  When those in control take actions that make our individual lives tougher, we often rebel.

After the American Revolution where the U.S. broke free of the United Kingdom, the state of Massachusetts ruled over what we now know as the State of Maine.  It made sense at the start as Maine has less than 10,000 residents.  Mainers did not like the situation as one had to travel to Boston to go to court.  Additionally, Massachusetts would take more in taxes than they invested in the state causing most Mainers to find the arrangement unfair.

By 1820, Maine won its independence so long as Missouri could become a state.  These seemingly unrelated events were connected as those in leadership in Washington DC could not let the balance between free and slave states tip toward the side of freedom.

Fast forward 192 years to 2012 when San Fernando Valley tried to secede from Los Angeles.  This effort was made as most of the Valley’s taxes were used to support the larger city to its south.  While San Fernando Valley voters chose to leave the city by a 51-49 margin, the non-San Fernando Valley residents voted against the measure by a vote of 67-33.

Many have wondered why the Coachella Valley remains part of Riverside County.  Like Maine, our area as well as areas to our east used to be sparsely populated.  Like Los Angeles, our county is a sprawling, large area where residents east of the San Jacinto Mountains are underrepresented in our county capital which is more than one hour away.  Like San Fernando Valley, if we ever wanted to leave the County, it is highly unlikely that county residents to the west of us would support the secession.

One of the challenges to having a larger voice in Riverside County is that our valley is made up of nine cities that collectively represent only 15% of our county’s 2.3 million population.  On the County Board, we only have one seat.  Additionally, by having so many small cities that individually represent 1% to 3% of the county’s population, our voice is further muted.  If we ever wanted a larger voice in the county, we need to find a way to combine the many cities of the valley into one voice.  This would mean doing our own version of the European Union.

When the United Kingdom decided to break its ties with the European Union on June 23rd, the primary reasons appeared were due to the free flow of immigrants into the United Kingdom in recent years and an unelected government in Brussels that was taking more from the United Kingdom than it was giving back.  As the middle class in the U.K. continued to shrink because of the effect of free trade and the free flow of workers between borders, the middle and lower class workers voted to break away from a system that was not benefitting them.

The situation in the U.K. sounds strikingly familiar to that in the United States where the middle class continues to shrink because of globalization and the free flow of undocumented workers into the United States.   Most Americans are coming to a conclusion that those in Washington DC are doing things that do not benefit them. This may be a key reason why Donald Trump crushed the GOP field and has a very real chance at becoming the next President.

Haddon Libby is an Investment Advisor at Winslow Drake and can be reached at 760.449.6349 or HLibby@WinslowDrake.com.

 

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