July 16, 2016
Saturday PM

When Sam Rayburn died he had $26,000 in the bank. He was the longest-serving Speaker of the U.S. House of Representatives, second in line of succession to the Presidency of the United States, an attorney who never took a fee or gift from anyone who might have any interest whatsoever before the government; and the standard, the very benchmark, for personal integrity and honor, both in and out of political office. When “Little Ben” Stevens, the unindicted co-conspirator in the VECO case that put Kott in prison, was President of the Alaska State Senate, he used his elected position to pocket more than a million in graft and payola. For this he should have gone to prison for at least 10 years, but an attorney general of the same political party let the case lapse. Since then the corruption of graft, payola, and special interest has been codified into law by the majorities in both the state senate and the house, so that they can continue their campaigns of personal graft and payola while concomitantly serving the needs of their corporate masters.

What has been fashioned as a fiscal crisis brought on by falling oil prices turns out to be a disguise for what is in fact a major Constitutional crisis brought on by the corruption of elected officials who are the bought and sold property of the oil companies, who in the course of conducting their grubby business have established the perfect oil company dictatorship. Now to enhance the well-being of the residents of the Anchorage/Fairbanks corridor, and to continue lining the wallets of these oil company stooges, it is the turn of the 225,000 residents of the state of Alaska who do not live in the Anchorage/Fairbanks corridor to forfeit their financial wherewithal and well-being, not to enhance their lifestyle or life situation, but rather to benefit only the oil companies, their parasites, and the residents of the Anchorage/Fairbanks corridor.

GET IT STRAIGHT WHAT IS HAPPENING HERE. NON-RESIDENTS OF THE ANCHORAGE/FAIRBANKS CORRIDOR ARE EXPECTED TO FORFEIT ANYWHERE FROM 10% TO 50% OF THEIR ANNUAL BUYING POWER FOR THE BENEFIT OF THE RESIDENTS OF THE ANCHORAGE/FAIRBANKS CORRIDOR ONLY.

In the meantime our most valuable natural resource, the oil, is being stolen from us for what amounts to, once the smoke clears, nothing. Any severance or tax derived from the legacy fields is consumed by the insanity of the “credits” for losing money for drilling worthless holes in the ground just to keep employment levels up in the Anchorage/Fairbanks corridor. The intent of these morons currently in power is for our oil to continue spilling out for nothing until it is all gone, and the entire Anchorage/Fairbanks corridor has been co-opted into believing their future hinges on this bullshit; that it is somehow OK to squander not only our oil wealth for no return but also to drain all the financial reserve accounts of the state of Alaska for no other purpose than to sustain population levels in the Anchorage/Fairbanks corridor.

Not that long ago an Air Force major general warned Anchorage that they needed to do something to develop other business and investment opportunities, but all of this was ignored in the pursuit of short-term gain by the stupid and the greed-obsessed. So now we are confronted with a situation where 500,000 deadheads in the Anchorage/Fairbanks corridor despite net profits in a lean year that will exceed the annual net profits of the now-defunct Ketchikan Pulp Company by more than 2000 times cannot begin to make it on their own and, therefore, expect the rest of us to finance their well-being.
There are only 30 times the number of folks in the Anchorage/Fairbanks corridor as there are in Ketchikan; only slightly more than twice as many people in that corridor as in the rest of the state. On the oil alone net profits 2000 to 4000 times anything that has ever occurred down here is somehow not enough to keep these folks in the chips.

A continuation of the current madness merely guarantees that the Anchorage/Fairbanks economic collapse will be that much greater because any and all state government accounts will have been drained, so there is no source of relief, and the corridor accounts for more state government jobs overall than the rest of the state. The dim bulbs of the Anchorage/Fairbanks corridor thinking they are voting to sustain ‘jobs’ are in fact voting their own economic extinction. It would be laughable were it not the fact they intend to take us all down with them.

Ask yourself the simple and obvious question: With all this wealth that is being generated even at this moment why is this state in a fiscal crisis that leaves our government short $4 billion a year, and requires the draining of every personal bank account in the state?

IT IS BECAUSE OUR OIL COMPANY DICTATORSHIP, THE “COGHILL ABOMINATION,” HAS TAKEN OVER THIS STATE AND HAS SOLD OUT THE WHOLE KIT AND KIBOODLE TO THEIR OIL COMPANY MASTERS, CLEAR DOWN TO THE FAMILY BUDGETS FOR THE BABIES’ DIAPERS.

Despite a decline in price to $26 a barrel for a short time early this year the legacy fields of Alaska spewed forth their treasure at a rate three to five percent higher than a year ago. There was not even the slightest hiccup to stop this flow. The price is down and the return this year will be lower, but the net profit for 2016 will still exceed $4 billion. We get nothing but a big bill.

To this John Coghill’s response was, “The oil companies have been taxed enough.” The super-rich then codified their mission statement, in the words of two classic gluttons of greed, Northrim’s Marc Langlund and Lynden’s Jim Jansen, “WHAT WE NEED NOW IS THE COURAGE TO RESPONSIBLY CONTINUE TO DRIVE DOWN THE COST OF STATE GOVERNMENT AND UTILIZE THE PERMANENT FUND AS INTENDED—TO FUND STATE SERVICES.”

The actual mission is:

• Truncate state government to the size it was in 1963.
• Destroy the University of Alaska and the Alaska Marine Highway System.
• Steal all the oil money.
• Avoid paying any taxes to the state while netting tens of billions of dollars in profits.
• Watch Alaska’s population decline to 200,000 or less within five years.

In order to accomplish their purpose they want to dip deeply into your wallet. (Think about that; you are expected to pay for your own economic destruction.)

Is there a better way? Oh yes, but the question is do enough Alaskans have the will to force the fundamental changes that are necessary to make it happen?

An old local attorney has provided a considerable part of the first aspect in the wisdom of this simple statement, “Think severance or royalty, not tax.” The State takes it cut as each barrel comes from the ground; no tax or accounting mickey mouse is permitted to limit this cut, period. And the State’s cut is not small. This stuff is worth a lot, and it is the responsibility of the State to get the best price barrel by barrel. The oil is supposed to belong to all of us in this state, not the oil companies, not the “Little Bens,” and definitely not Coghill and his crowd.

The gold miner I started off this series with back in March was at one time the long-time President of the Alaska Miner’s Association, and that wily old man not only had sense enough not to sell his gold for too low a price, but also had sense enough to stick it in safe deposit boxes until the price got high enough.

That is exactly what we should do, too. When British Petroleum won the contract to develop and run the Iraqi oil fields via competitive bid against a dozen or so other international oil firms, it went before its Board and its shareholders to brag that a net profit of $2 a barrel was a really great deal.

For decades this same outfit has been realizing net profits barrel by barrel on Alaska oil of $25 to $75 and more because way too many of this state’s politicians have chosen to sell out their fellow Alaskans to the tune of hundreds of billions of dollars while greasing their grubby palms in the process. It’s cold in North Dakota and Alberta, too, and places like the North Sea are colder still, and what we already know is most of these places don’t give the oil companies all of the dough. It’s hotter than hell in Iraq, and they don’t just shoot at you over there, and a profit of $2 a barrel is something for BP to brag about to its Board and to its shareholders.

A $20 a barrel severance or royalty to the state as each barrel comes out of the ground would generate this year $3.8 billion to $4 billion, just about what we need to finance the state government. (I think $20 a barrel is still way too low.) In ten years when production levels are 60% what they are today that would still generate $2.3 billion a year.

But the oil companies have been raping us for 40 years. The ‘trades’ are an embarrassment to read; Alaskan oil tax and business practices are referred to as being “very generous” to “absolutely nuts.” Thus $20 a barrel royalty up to $50 a barrel, which gives the oil companies the opportunity to make a net profit in the range of $2 to $10 a barrel. After $50 a barrel an add-on based on a proportionate sliding scale because this is all pure profit henceforth to be weighted considerably in favor of the state, i.e. two-thirds to four-fifths. This accomplishes three purposes: First, it lets the oil companies make lots of money; second, it permits the state to not only make even more; but to, third, establish a compensatory reserve for the 40 years of stiff-arming the rubes and cons who did so much to make British Petroleum the second largest corporation in the world.

To even contemplate using the earnings of a reserve fund like the Permanent Fund to finance state government an amount about five times the size of the current fund is required. The constitutionally protected Permanent Fund totals only $39.2 billion, and no such fund can reliably be expected to produce sufficient annual earnings over an extended time to finance $4 billion annually. If as in 2008 the Fund were to lose $9 billion of its value in ten weeks, at that point there would only be $30 billion in a very non-liquid Fund. To achieve parity, i.e. to get back to $39.2 billion would require 10%+ annual earnings for a period of no less than three years (at a point in time when the world economy is in recession to meltdown status). Thus for the year of loss plus three years thereafter in the most insanely optimistic of scenarios there are no earnings whatsoever to finance state government. That is a period of no less than four years, but to introduce two more sobering realities to you parity was not reached on the stock market from the crash of 1929 until 1952, and the problems that evolved out of the Japanese economy of the 1980s persist to this very day and are in fact getting worse as of this writing.

NO ONE WHO SUPPORTS THE NOTION OF USING THE EARNINGS OF THE PERMANENT FUND TO FINANCE STATE GOVERNMENT IS IN ANY SENSE A RESPONSIBLE ADULT.

The probability of a major recession during the next five years is in fact quite high, probably at least 80%. We are already overdue. In such event with a Permanent Fund now reduced to $30 billion by shrinkage in value alone, where now will the money come from to fund state government? After four years of drawdowns at $4 billion a year only $14 billion would be left, and even with earnings because the principal has been so significantly reduced, the Fund could not exceed $18 to $20 billion. The Permanent Fund at $39.2 billion cannot finance state government with its annual earnings, and a fund less than half that amount is not really capable of financing anything of consequence, except by wasting the principal.

More to the point the Permanent Fund was not established for such a purpose in the first place. Rather it was intended to be a means by which both present and future generations of all Alaskans can benefit directly and personally from the great wealth that was bestowed on us all. Instead the Permanent Fund has been used as camouflage for the greatest theft of a state’s wealth in the history of this country, a trillion dollars plus and counting, and now this same bunch of goddamned thieves, pleading poverty, want both the earnings of the Permanent Fund and the Fund itself to finance government in the interim while they run off with the rest of the loot.

Were a $20 a barrel royalty collected on each barrel of our oil as it came from the ground the oil companies would have ceased production about November 1, 2015, and not gone back into production until April 2016, a period of five months. Our oil would have stayed in the ground, the oil companies would have made no money, and our profit would only have been deferred a short time until it was profitable to produce again. It should never be the job of state elected officials to worry about employment levels in oil companies; their primary responsibility is to maximize our profit on our very valuable but very depletable natural resource.

Had such a royalty policy been in effect just for the years 2014 and 2015, during which time the price of oil ranged up to $67 to $73 a barrel for extended time periods, the net return to the state treasury would have been at least an additional $10 billion and possibly $12 billion. For the several years prior to 2014 the returns would have been astonishing, but the bulk of that money was stolen from the people of this great state. Instead of the disaster confronting us with the Constitutional Budget Reserve exhausted within 18 months, there would have been close on $30 billion on hand to deal with this current economic crisis. INSTEAD THERE IS A BUILDING BOOM IN McMANSIONVILLE IN DALLAS, HOUSTON, TULSA, AND FLORIDA, ETC. ALL FINANCED BY DUMB ALASKANS AND THE CROOKED IDIOTS THEY ELECT TO PUBLIC OFFICE.

Where did Alaska politicians get the idiotic notion that oil companies won’t work to make a billion or two or three in net profits? The “Coghill Abomination” operates not as the Alaska State Senate and the Alaska State House, but rather as a board of directors for the welfare section of the oil companies. Their concern is with oil company health and well-being, not with the state government and absolutely not with the citizens of this state. The oil is supposed to be the property of the state and all of the people of the state, and the only reasonable way for those interests to profit from their own property is to expect to be paid up front for every barrel of oil. Lots.

State Senator Anna McKinnon, a nut job of the first magnitude, believes that eliminating all taxes, etc., on corporations and oil companies will effectively suffocate the state government and force its truncation, thus she is willing to forfeit the tens of billions of dollars of oil wealth that rightfully belongs to the State, that should be held in reserve for future use, in order to affect her dogmatic obsession of reducing government to the size of a pea. She is willing thereby to sell out future generations to the tune of tens of billions of dollars to sate a personal obsession. This person is very definitely at this time in the wrong government institution.

The simple, straightforward solution to our fiscal meltdown in process of tilting totally out of control involves the use this year of what remains of the Constitutional Budget Reserve to finance the state government for the next fiscal year. Then re-instate state corporate tax on all corporations operating in Alaska, and establish a royalty structure on the oil companies as per above. That goes a long way toward solving all our fiscal problems.

But our problems only start there.

The Alaska State Senate must be re-apportioned on the basis of geography, not population, to insure that never again can one part of this state try to steal everything in the rest of the state to finance its own well-being. Failure to do this will leave ghost towns for tourists to visit from Hyder to Nome.

Ray Metcalfe and Judge Schulz are spot on with their proposed referendum to eliminate this crap of state senators and representatives voting money and favors for their own employers and for themselves, but it has to go farther than that.

No elected official in this state at any level should ever be a member of a Board of Directors of any corporation or other entity, whether profit or non-profit, at any time during their tenure in office. By so doing in any and all instances they are allocating their credibility as an elected official to a private enterprise, the most fundamental corruption. Selling your office.

This exclusion should be extended for a period of no less than three to five years after leaving office.
(Think Sarah Palin.)

All business of the state senate and the state house is the public’s business and whatever dirtbagging even of a partisan nature the good old boys and gals want to conceal is henceforth and forever illegal. Here Robin Taylor 22 years ago was wrong in arguing that some things need to be allowed in private, for it always starts with a nickel and ends up with the whole damned bank being sold down the river. No private meetings and no private deals with oil companies or any other corporation or entity.

Fix those structural elements and a lot of those oil company types resign from office within 24 hours. Because the instant we get a few laws returned to the state books the floodgates are re-opened to the FBI’s anti-corruption teams, and the rats will start scurrying.

But dealing with structural elements without dealing with the crooked, stupid, or inept individuals who brought you this mess does not provide adequate utility in any sense.

Fire Don Young now. Think about it. This fossilized grade schooler, who couldn’t get through a third-rate university, has been watching this massive rip-off of Alaska wealth for decades from his perch on high without once whimpering an objection. This guy is the very definition of sold out, bought and paid for. Time to retire him to a hot tub in Bethesda or Montgomery County, Maryland.

Fire Lisa Murkowski now. How many Alaskans have memories longer than an elephant? The best replacement that Daddy could find in all the state of Alaska was his own goddamned daughter. Time to flat out destroy these corrupt Alaska political dynasties. The “Duchy of Murkowski” is the worst of the lot. Murkowski has the gravitas of a hausfrau, and functions otherwise only as window dressing for Mitch McConnell.

Fire this Sullivan creep as soon as you can. He is all oil and not one part Alaskan. Send him packing.

We also need replacements for two-thirds of the members of the Alaska State House and three-fourths of the members of the Alaska State Senate. If these rats are not un-elected in the next election cycle, they should be recalled immediately thereafter.

“Oil Company” Walker not only has no will whatsoever to tax the oil companies but he somehow has visions in his head of blowing untold billions in relatively short order on the down payment for a liquid natural gas pipeline. This guy is caving to the “Coghill Abomination,” and if ripping us off is the best he can do, recall him, too.

The essential problem remains the fact that the Anchorage/Fairbanks corridor has all the political power, and it is up to them to get rid of these dopes. These idiots don’t get how they are being played, so confidence cannot be high that they are in any sense a solution to this problem. Many of the worst of these politicos are running unopposed.

You have already heard “Oil Company” Walker’s plaintive whining coming out of Juneau. But he just can’t get to the point of seeing that it is our oil, and we deserve to get paid for it, and not with the promise of population stability for the Anchorage/Fairbanks corridor.

My level of confidence is zero. I do not believe that Alaskans have either the brain power or the guts to get rid of these crooks and these idiots who are wrecking this state. The regrettable fact is that spending down the Constitutional Budget Reserve is ultimately a victory for the “Coghill Abomination,” whose objective do recall is to reduce Alaska state government to the size it was in 1963.

So expect them in your wallets ‘ere long and at your back door for the groceries sometime next year.

Good night and good luck.

David G Hanger
Ketchikan, Alaska

Received July 16, 2016 - Published July 16, 2016

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