Part 3: “OIL COMPANY” WALKER, “OIL CAN” ORTIZ, AND OIL COMPANY SOCIALISM
By David G Hanger
March 30, 2016
Nor is it the obligation of the state of Alaska to bail Anchorage and Fairbanks out of their economic problems. That is where all this not taxing the oil companies crap came from; the need of Anchorage and Fairbanks to sustain their economy; and the needs and desires of numerous very dishonest individuals, including elected members of this state legislature, to have their personal pockets lined deeply with oil company money.
This, of course, is exactly where the FBI needs to grow a pair and get back in there and clean house on this payola and financial crime. Dan Ortiz seems to think that it is his “obligation” to help these people pull off and consolidate this crime. Were it a simple or more ordinary matter of choosing between several bad choices that ultimately are not going to be that consequential, biting the bullet and moving on might make sense. But the first premise is false, and none of the solutions currently proposed can work.
In point of fact any of these proposed solutions will result in complete economic meltdown in less than five years, and all “Oil Can” Dan is doing is stoking that fire with gasoline.
Perhaps you have heard of the old German method of evaluating military officers. Four categories: Smart and hard-working, smart and lazy, dumb and hard-working, dumb and lazy. And the most dangerous category in all possible ways is the “dumb and hard-working.” I know Dan Ortiz is not a stupid man, but he is working dumb, and he is working hard at it.
“Oil Can” Ortiz is of the mind that this SB21 vote of two springs ago, the “No means Yes, Yes means No,” vote, financed by $16 million of oil company propaganda and a governor whose very soul is the bought and sold property of the oil companies, fixes in stone for all time the premise that a bunch of foreign oil companies get to run away with all of Alaska’s oil tax-free forever. A very small percentage of voters voted, and it passed by a very thin margin. It was as fraudulent an election as has ever been perpetrated in this state: Its meaning and consequences were intentionally obscured by our own elected officials. That is a fraud for which people should be doing very hard time in a Federal pen.
But to “Oil Can” Dan that is gospel. It is gospel that your treasure, that my treasure, Alaska’s oil, is now henceforth and forever the sole property of a bunch of foreign oil companies. That is the first premise; that is the basis for “Oil Can” Dan’s thinking, and despite his complaints about the state legislative majority, he has just flipped over and is eating out of their hand.
That first premise is as false as anything can possibly be.
WITHOUT THE PROMPT REINSTATEMENT OF SUBSTANTIAL SEVERANCE TAXES ON ALASKA OIL THERE IS NO CHANCE OF ECONOMIC STABILITY IN THIS STATE. INDEED, ECONOMIC COLLAPSE IS ALREADY IN PROCESS.
As nonsensical as all these proposals are it is all jousting at windmills, folks.
These people do not know how to add. Dan Ortiz apparently does not know how to count, or does not care to. The numbers you are about to read are all factual, and will demonstrate clearly to you that the state of Alaska does not have the revenue available with or without the Permanent Fund to finance government the way they propose. The cuts already made are more than adequate to throw the state into a deep recession, which is starting to materialize now.
THE CURRENT STATE BUDGET DEFICIT FOR THIS UPCOMING CYCLE IS $4.1 BILLION, UP FROM DAN ORTIZ’S $3.7 BILLION BECAUSE OF A $300 MILLION MISCALCULATION REPORTED LAST WEEK.
THE NET INCOME OF THE ALASKA PERMANENT FUND FOR FISCAL YEAR 2015 WAS $2.9 BILLION, $600 MILLION LESS THAN THE PREVIOUS YEAR.
THE CONSTITUTIONALLY PROTECTED PART OF THE ALASKA PERMANENT FUND TOTALS ONLY $39.2 BILLION.
Despite numerous nonsensical reports that the Permanent Fund is anywhere from $55 to $65 billion, the stark reality is the real Permanent Fund is $39.2 billion. The fund balance at the end of 2015 was $52.8 billion, the difference of $13.6 billion being reserves used to pay permanent fund dividends and several other things. All of this money is spendable under current law, is basically already spent in large measure, and is the first kitty proposed to be tapped to fund state government in perpetuity.
Duly note this $13.6 billion represents accumulated reserves, not earnings. The fund earned $2.9 billion last year, and the budget deficit for this year is $4.1 billion. Instead of collecting taxes from the oil companies which is the only rational policy, we intend to finance state government in perpetuity on stock market earnings; oh, and we also promise to continue paying all of you a permanent fund dividend.
Some time in the next four years the stock markets will crash big time. There really is little doubt about that. Managed by the same bunch of buffoons who brought us the mess of 2008, we have bought time with artificial stimuli yet retain the same unfettered, unregulated capitalist maxim which has a very predictable seven-year cycle from boom to bust that runs back the better part of 200 years now. There is an inevitability to it enhanced considerably by the fact the largest real estate bubble in history is festering right now in China, a managed economy that thinks it has mastered the tenets of a free enterprise market economy. They are in fact centuries behind; the true capitalists are in New York and San Francisco.
When the markets crash the earnings of the Permanent Fund will go negative, and at precisely that moment in time the state of Alaska’s government will end. In a matter of days all state workers, all of them, will be unemployed. Having defunded itself, the government will effectively collapse.
THAT BY THE WAY IS WHY GOVERNMENTS COLLECT TAXES RATHER THAN LETTING THE MARKETS DECIDE WHAT THEIR BUDGETS ARE GOING TO BE.
The Mickey Mouse interplay between the Anchorage-Fairbanks corridor, the oil companies, and the state legislature requires considerably more research, including by law enforcement, to comprehend completely, but the motives in each instance are pretty clear: 1) For the state legislature a combination of corruption, self-aggrandizing greed, and radical ideology; 2) For the oil companies nothing but money plus the opportunity to legitimately boast that Alaska politicians are among the biggest patsies in history, and definitely the biggest on the planet right now; 3) For the Anchorage-Fairbanks corridor a very conditional assuaging of economic fears that in fact in the mid- and long-term have been magnified exponentially in terms of negative consequences because of that fear.
By seeking to ignore or deny the fundamental principles of free enterprise the residents of the Anchorage-Fairbanks corridor seem to have forgotten that a laid-off oil company worker is a temporary thing, a defunded government worker a permanent thing. And it’s the Anchorage-Fairbanks corridor that has sucked up most of the benefits and the finances of state government these past many decades. The oil companies can keep getting richer while the Anchorage-Fairbanks corridor goes broke because the state government has no more money for all those state workers, projects, and other things you all routinely expect.
Hell, you don’t even pay sales taxes right now.
In Part 4, the state legislature, economic & political philosophy, and the looming crash.
As usual, refer to as many friends as possible by whatever means.
David G Hanger
Received March 27, 2016 - Published March 30, 2016
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