Nick’s Note: Regular Daily readers know we’ve been following what we call America’s Second Civil War. This won’t be a traditional shooting war. Instead, it will be a war in which some states declare their financial independence from the U.S. government.

California is one of the states leading this movement. Last month, the state’s Supreme Court struck down a ballot initiative to split California into three states. Despite the court’s ruling, polls show that the political divide in America is at all-time highs.

We wanted to see what this movement means for Daily readers. So we called PBRG friend and 19-time Emmy Award winner John Stossel—one of the leading free-market proponents in the country—to get his take…

By Nick Rokke, analyst, The Palm Beach Daily

Nick: John, last month, the California Supreme Court removed a ballot initiative that would have split the state in three. What do you think of the court’s ruling?

John: I disagree with the ruling. I think Californians should have been allowed to vote.

However, I’m not a legal scholar… Maybe there was something written in the laws that prevents that kind of measure from reaching the ballot.

But my ideology says we should let the people decide what they want to do. A few appointed judges shouldn’t be allowed to take the vote away from the people.

The United States was born when the Founding Fathers seceded from England. So why do so many people now see secession as a terrible thing?

Nick: Good point. How widespread are these types of movements?

John: This isn’t just an American problem.

I recently made a video called “Let Them Leave” about secessionist movements around the world. This was before the ballot in California was even known.

Last year, when Catalonia tried to break away from Spain, the Spanish government forcibly kept people away from the polls. So even though a majority of Catalans wanted to break away from Spain, the government didn’t allow them to.

And we’re seeing secessionist movements in Iraq. After the second Iraq War, the Kurds helped the U.S. drive ISIS out of the country and regain order. Now, the Kurds want independence from the rest of Iraq. They don’t want any part of the Sunni/Shiite battles.

But the U.S. and European nations won’t allow that to happen. They think a Kurdish state would cause conflict in the region… which is ludicrous. If anything, it would help stabilize things.

The real reason governments don’t want to allow this is because it would give secessionist movements within their own borders more energy and hope.

Nick: Right. And that’s a threat to the power of big government. Why doesn’t big government work?

John: Because government is force. The more force, the less free people can make their own decisions.

If government becomes big, that means we, the people, become small.

That’s why I wrote my book, No, They Can’t. President Obama was saying, “Yes, we can.” Which is fine; it’s a great slogan.

If “we” meant “we, as individuals”… then that would have been fine. But it soon became clear that he meant “we, the government.” And the government screws everything up.

Individual entrepreneurs have given us all the good things we enjoy like air conditioning, flushing toilets, computers, cigars, and supermarkets.

And we take it for granted… But it’s thanks to those entrepreneurial spirits that we’re doing well.

Nick: What makes smaller government better?

John: Central authorities aren’t the best way to solve our problems. Competition is. And smaller government fosters more competition.

In the U.S., state governments behave, not because their politicians are noble, but because people can “vote with their feet” and move to other states.

If taxes get too high in New York, you can move to Florida.

As California tortures businesses, Californians move to Arizona and Texas.

The more governments you can choose from, the easier it is to benefit from the competition between them.

Nick: I think some people are starting to realize the advantages of small government… Do you think we’ll see more secessionist movements in the United States?

John: It’s hard to say… There was talk in Texas about seceding a few years ago. But that didn’t go anywhere. And now California has a small secessionist movement.

Do I see a state splitting up or seceding? No… I don’t see that happening anytime soon. The powers-at-be make it too difficult to happen.

But I’m for smaller government. And I hope some of these movements at least get their day at the ballot boxes.

Nick: Thanks for taking the time to talk with us today, John.

John: You’re welcome.

P.S. From October 17–19, John will join 15 of the brightest minds in the financial world at our first-ever Legacy Investment Summit in Bermuda.

This is a world-class destination with all the essentials for an amazing vacation… beautiful beaches, a picture-perfect golf course, scuba diving, fishing, jet skiing, oceanfront tennis, and so much more.

During the summit, you’ll see exclusive presentations from former hedge fund manager Teeka Tiwari, PBRG co-founder Mark Ford, and media personality Glenn Beck.

In fact, we want to give you $1,000 in bonuses just for attending…

You can learn more about this limited-time offer and register for the summit right here…

MAILBAG

Readers continue to weigh in on the first part of Teeka Tiwari’s two-part essay on “The Real Threat to American Unity.”

From Christopher M.: Functional democracy requires popular consensus and leadership with moral authority. Our elections hinge on fomenting divisiveness and candidate reputation assassination.

In response, the increasingly disenfranchised, factionalized, and disgusted masses vote for “cartoon candidates” of various stripes. Best advice is to get rich, stay in highly liquid assets, keep relocating from one backwater country to the next… and surf ahead of the authoritarian wave and societal dysfunction.

From John H.: Many of the grievances the Founders cited in the Declaration of Independence against England… are the same grievances we in flyover country have against the D.C. establishment.

My favorite quote is from Thomas Jefferson: “He (King George III) has erected a multitude of New Offices, and sent hither swarms of Officers to harass our people, and eat out their substance.”

Just like King George III, the federal government has sent the U.S. Forest Service, ATF, IRS, EPA, and on and on… to assault good people and bully productive citizens.

California is busy outlawing straws for crying out loud. I don’t want this nation to chain me to people who have reached that level of derangement. Break this country up!

From Anton S.: In Monday’s issue, there was a question regarding a new threat to the U.S. dollar. I have a wild guess… The threat comes from President Trump fighting against the financial elite.

After the Helsinki summit with Russian President Vladimir Putin in July, Trump made one statement (he repeated it twice) that the Fed shouldn’t continue to raise rates. This is unprecedented… and it’s the casus belli against the financial elite in the U.S.

Nick’s Reply: Stay tuned for this upcoming Monday’s Daily, Anton. In the second part of his essay series, Teeka will reveal what he thinks is the real threat to the U.S. dollar.

From Jeremiah W.: In your latest essay on the real threat to American unity, you wrote that “Japan actually has a negative interest rate (-0.1%), which essentially means you are paying to borrow money.”

I think you meant to say, “…which means you’re paying to lend money.” Thanks for the great articles!

Nick’s Reply: You’re correct, Jeremiah. Theoretically, negative interest rates would imply you’re paying to lend money to someone or someone’s paying you to borrow money from them. In reality, negative interest rates act more like a tax on savings as they erode the money in your savings account.

Americans are more divided now than at any time since the Civil War. Is breaking up the answer? Send us your comments right here…