America does not have an "Alaska Permanent Fund"

(cross-posted at the Big Orange)

While some folks gleefully point out the degree to which this takes McCain's 'experience' trump card off the table...

While others fret about whether this pick means any lingering Clinton/Obama divisions flare up...

While others hopefully speculate on ethics investigations...

It's STILL THE ECONOMY, STUPID!

How does Sarah Palin help John "the economy is not my strongpoint" McCain?

It doesn't.

If anything, it reinforces the seminal McCain weakness, on this election's seminal issue.  

Let me be clear.  I have no doubt that there are Alaskans hurting financially.   I have no doubt that Alaskans are also facing some of the same economic challenges everyone else is facing.  

I believe in the 50 state strategy.  I believe we are all Americans - that we are all in this together.  I am not trying to throw Alaska under the bus.

That said - the state of Alaska and its residents have a built-in economic advantage that the United States does not have.  

How in the world does Sarah Palin's experience as the governor of Alaska in any way help Senator Seven Homes fix the country's economic mess?

The Permanent Fund crutch that Sarah Palin had in developing Alaska's budget will not be available for a hypothetical McCain/Palin administration.

While the McCain campaign will loudly trumpet the fact that Alaska has enormous energy reserves, will it also remind us that Alaska has a 40 billion -- BILLION -- dollar reserve that its legislature can draw upon?  

There is no doubt that Alaskan residents face special challenges that the other 49 states do not.  I do not begrudge Alaskans the need for federal funds - it's rugged terrain, it's huge area -- we are the keepers of our brothers and sisters.

Yet - there is little doubt that America has a whole subsidizes the state of Alaska, despite it's Permanent Fund and the companion Constitutional Budget Reserve.  

Charles Homan, an Alaskan writer, wrote about precisely this issue last year in the Washington Monthly, and while the article discusses Senator Tubes pork, it's an excellent discussion on the relationship between the federal budget -- and Alaska's state budget.

   When did Alaska become the American taxpayer's burden? The short answer is that it always was. In 1912, the Washington Post declared Alaska to be "more dependent on Congress than any other part of the United States outside of the District of Columbia." University of Alaska historian Terrence Cole has estimated that with the exception of two decades in the nineteenth century (when the Treasury spent little in the territory and reaped considerable revenues off the fur seal harvest in the Pribilof Islands) and a few years in the late 1970s and early '80s (when high oil prices exploded Alaska's state coffers), Alaska has always cost the federal government money. By the most recent figures available, the United States spends $1.87 on Alaska for every dollar it collects in Alaskan taxes.

* * *


    Along the way, Alaska's pattern of federal reliance has long since stopped being a matter of necessity and simply become habit. The state has continued to behave as if it were on the brink of economic failure even after 2002, when high oil prices once again balanced the state's books and then some (the state's budget surplus will probably top $100 million for the current fiscal year). In 1998, Stevens had created a joint state-federal entity called the Denali Commission, which was intended to provide a wide array of support for infrastructure and services in Alaska. But the federal money--sometimes as much as $150 million a year--that Congress pumped into the commission went unmatched by the state even after it had bounced back from the fiscal crisis. Alaska now feels it is simply entitled to such support.

Sarah Palin cannot transfer this crutch to a McCain administration.

While it comes the from the sometimes criticized Tax Foundation think tank -- the gap between what Alaska pays into the federal budgets versus what it receives is stark.

In the 25 years since that the Foundation has records - Alaska has ranked first 18 of those years, and the last seven in a row - and has never been out of the top five.  In 2005, the disparity was $5,343 per capita paid in -- versus $13,950 received out of the federal budget.

The point of this diary is not attack Alaska or Alaskans.  I am quite certain that many Alaskans are struggling in George Bush's economy to the same extent that the rest of us are.  I have no doubt that Alaskans work every bit as hard anyone in any other state in the nation.  I further understand completely that the nature of this beautiful and important state requires a degree of federal funding that do not exist in the other 49 states.

I am simply pointing out - in our current Bush/McCain economic crisis, how in the world does Sarah Palin and the unique economic advantage she enjoyed as governor of Alaska help John McCain solve an issue about which he is an admitted novice?

It does not.

John McCain, economic remedial student -- has just selected a running mate with a completely foreign and unique economic advantage.

Just as we all do not have seven homes -- the United States does not have a Permanent Fund.  The United States does not have the advantage of a better than 2 to 1 revenue/receipt equation.

Sarah Palin does not help John McCain deal with the economy - it only emphasizes what a disaster a McCain economy would be for us.

Tags: budget, economics, John McCain, Sarah Palin (all tags)

Comments

7 Comments

Stop overthinking this

This is sizzle...

The steak is missing from John McCain's campaign - and his bona fides on the economy are now weaker than they were yesterday.

He's brought a governor onboard who enjoys the state budgetary economic advantage of marrying a beer distributorship heiress.

by zonk 2008-08-29 09:38AM | 0 recs
Its Oil prices that is hurting us stupid.

If you're looking for an honest answer to your dairy and assumption. To counter quote your assumption ( view subject header)

That and our party Dems have moved from NO drilling to " They tried to get me to drill and I NOW say yes yes drill".

by shattertheceiling 2008-08-29 09:40AM | 0 recs
Re: Its Oil prices that is hurting us stupid.

Do oil prices play a role?

Sure... does the housing collapse?  I have no doubt that gas prices have certainly hurt the ability of many Americans to pay their mortgages -- but that doesn't eliminate the fact that home values have plummeted - and whether you're paying $2 for gas or $4 for gas, when your mortgage is upside down, it doesn't matter.

What's more -- just like the Permanent Fund is not transferable to the federal budget, neither is Alaska's natural resource reserve transferable.

Alaska has an embarrassment of economic riches upon which to draw.  The state budget for Alaska is an equation that is completely foreign to the federal budget.

John McCain, who admits little knowledge of the economy, has just selected a running mate whose economic experience has little bearing to the national economy.

by zonk 2008-08-29 09:45AM | 0 recs
Re: Its Oil prices that is hurting us stupid.
The Democrats have never said "no" to drilling. We believe we should drill new wells in those areas already approved for operations, and there are many such areas.
by zenful6219 2008-08-29 09:54AM | 0 recs
Re: Its Oil prices that is hurting us stupid.

Um....oil prices have nothing to do with his point.

by IowaMike 2008-08-29 10:02AM | 0 recs
Alaska Permanent Fund

Basically, yes, Alaska has a negative income tax.

But I really don't want to push the argument that goes "well, of COURSE the economy is stronger in Alaska, they have a lower tax burden!"

Do you see why?

by Steve M 2008-08-29 10:14AM | 0 recs
Re: Alaska Permanent Fund

I would say that first and foremost - I'm not even aware that Alaska DOES have a stronger economy than the rest of the nation...

I'm saying that John McCain's glaring problem on economic issues is not helped in the least by his selection of Sarah Palin.

Neutral of Alaska's current economic climate - he's just selected the governor whose economic and budgetary experience is the absolute most foreign to the national budget.

This isn't defusing any statement about Alaska's economy and Palin's stewardship of it; this is about the fact that when it comes to the most obvious assistance a governor could bring a McCain ticket -- Palin's ranks at the absolute bottom of the possibilities.

by zonk 2008-08-29 10:19AM | 0 recs

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