Volume 4 number 10: November/December 2002 Postelection Musings, Part I: Is Downhill Necessarily a Bad Direction? I’ve been amused by all the media mumbling about "What does it Mean?" regarding the recent elections, national and state. It means the American electorate is about as smart and sophisticated as a box of rocks, and Alaska is an all-American state at last. How could that surprise anyone who recognizes that e-mail spammers really are making millions with their phony Viagra and imitation boob-blooming potions? After all, it was that famous American philosopher P.T. Barnum who supposedly commented, "Nobody ever went broke underestimating the intelligence of the American public."* I’m pretty sanguine about the Alaska situation, actually. I’m confident that Governor Murkowski will bring the same wise and successful judgment to running Alaska that he once did to running Alaska National Bank. The same result is likely, given that the new governor has a firmly expressed passion for building pricey capital projects, such as roads and railroads, while vowing not to impose taxes or reduce the permanent fund dividend. He’s right with his voters in that regard, since the chert-and-quartz electorate boldly promised to pay for hundreds of millions of dollars’ worth of gas-pipeline bonds while tossing out any old legislator who dared suggest taxes or dividend containment...It doesn’t take a degree in economics to think of bankruptcy. Okay, here’s my prediction for the approximate course of events. The Arctic National Wildlife Reserve will be drilled, successfully, but the ensuing pipeline will go out through Canada. (The Yukon Territory just elected a more development-oriented government, too, and they want to be sure their oil and gas resources aren’t stranded. But most important, of course, is the interest of the oil corporations, and what they’re interested in is the bottom line.) This will do in the caribou—no matter how careful you’re trying to be, oil facilities on the calving grounds do not a safe haven make—but after all, Alaska has lots of caribou, with more to come once the new administration returns to controlling wolves with a vengeance. Some local supply and service companies will benefit from the ANWR activity, but basically the public good won’t—no income taxes, remember, so the oilfield development and pipeline payroll can flow unimpeded back to Houston and Baton Rouge. It’ll be well into Governor Murkowski’s second term before the wellhead taxes could begin to rebuild Alaska’s income flow; it takes time to bring an arctic oilfield on line. And, while the companies may be in a rush to drill ANWR, so they can be sure about the size and quality of the resource available there, they likely won’t be in a tearing hurry to see oil flowing out of it. After all, by the time the drilling is done, the United States is likely to have its hands on Iraq’s massive oil supply, and Russia will have surpassed every other nation, even Saudi Arabia, in the amount of petroleum it exports. Alaska’s oil won’t seem very economic. The companies can sit on it until its cost permits them to profit, whenever that happens. This develop-don’t develop dance will come with a lot of fuss and bother. Opening the reserve to drilling will be taken as a triumph and will trigger happy spending by the new legislature, which will be singing "I told you so! Resource development is the key!" while it votes showy job-creating capital projects. These will be funded in good measure by federal funds, thanks to Senator Stevens, Congressman Young, the power of seniority, and the like-mindedness of the Republican Congress; the national recession won’t be too deep next year, so our pashas of pork will have largesse to spare. Alaska will only be on the hook for a small percentage of the projects’ cost—and for all the maintenance, but that’s no worry. Maintenance can always be cut. In fact, it will have been—probably as a very early order of the new legislature’s business. Remember Candidate Seekins’ campaign joke about "What’s yellow and sleeps three? A DOT king-cab pickup truck"? Cutting government waste, redundancy, and regulation was the promise of the Republican united front, so they’re going to do it—count on it. Some may not think we have too many village safety officers and small schools, but our legislature will recognize waste when it sees it. I predict minimum viable school size will at least double, other adjustments will be made to municipal cost sharing and the education foundation formula, and in general a lot of bullet-biting will take place. But not for recipients of the permanent fund dividend. Instead, all kinds of fiscal tangoing will permit the recalculating of how the dividend is calculated—not just from its income, but so that people can count on getting a reliable amount, from a bite or two out of its principal as well. The resource development and capital projects will bring us new workers and their families, who—like the military folks who keep their residency forevermore, wherever they get their mail—will want and know they deserve dividends too. More dividends, reliably high dividends—the bites out of principal will begin to add up. Well, good. The damn permanent fund has become more trouble than it’s worth. One of the problems with living here for a long time is that you have a memory of how things were—such as how the fund was supposed to support things that government should provide, like public education, safety, and transportation systems. (That was back when the state still had an income tax—which, despite the recent advertisements to the contrary, did not bring civilization as we know it crashing down.) Individual dividends were a great idea, giving us all a specific interest and getting cash into the Bush, but they’ve become the tail that wags the dog. I don’t mind if the mutt gets put out of its misery. So what does it mean? It means that by promising progress, and that with their election everything is now looking up, our new leaders are likely taking us onto a great downhill slide. But hey, I’ve always enjoyed sledding. Waaahooo....!
*It is worth noting that Our Publisher is distantly related to said Barnum. No one should be surprised. That’s on her father’s side, of course. | ||
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