The Economy: Some Cronstructive Criticism for Governor Palin

This thread is going to offer some criticism I have with the Palin administration. Having said that, I will say two things. One, I voted for Palin, and two, I still support her and I want to see her succeed.

I say this because I come from a point of view that I understand how "pay to play" politics work in Alaska. This is not to say "pay to play" politics is only indigenous to Alaska politics. But recently Alaska has seen its fair share of public scrutiny and investigations on the corruption in Alaska. And the cronyism that takes place in Alaska, affects the free market economy in Alaska.

Because of this, Sarah Palin rode in on a perfect political storm and was elected Governor. Governor Palin, before she was elected, was on the oil and gas team for the State of Alaska.

Because of that position, she, through the local media, became popular. She became a champion of fighting the "machine" within the Alaska Republican Party.

For myself, in 1998, I ran under the Alaskan Independent Party and ran against a Republican. This was the first time I had ever entered the political arena, but what happened to me, opened my eyes to how "pay to play" politics is worked.

In short and without going into too much detail, I was approached by individuals within the Alaska Republican Party and I was asked to step aside and let a well known republican candidate fill the ticket and run against the other republican.

There were meetings at Denny's over my leaving the race and offers were made of a chief of staff position or help in the future with contributions if I did this. So I had my first taste of politics.

And because of this experience, I support Palin on this basis. I understand that you have to pick your cabinet members carefully and I understand that those who you have had a close relationship will be on the top list. They will be considered Outsiders.

That is not always a good thing, because cabinet members can bring about bad policy.

Because Palin was elected on a mandate of change that had a foundation of fighting corruption, the oil companies became a target by proxy to legislators caught taking bribes to keep oil taxes down.

The local media had a "tingle down their leg" moment and championed Palin's efforts on passing legislation that increased taxes on the oil companies. The legislation was called Alaska's Clear and Equitable Share.

In the public arena, there was a spirited debate. From radio host Dan Fagan promoting a consultant Pedro van Meurs, to consultant Daniel Johnston's testimony to the legislature that taxes could be increased without harm to the economy, it became a "free-for-all" debate.

The irony is you had Dan Fagan promoting Pedro van Meurs and criticising Palin's plan to raise the tax to 25%, all the while Pedro van Meurs was quoted in the press endorsing the 25% increase by saying it wouldn't hurt the economy.

As stated before, I want to see Palin succeed. During a campaign event held by the Anchorage Women's Club, I watched Palin work the room and you could tell she was somewhat of an Outsider, then I listened to her speak about the issues.

That was an issue she was clear and sincere about. On other issues you could tell she was not comfortable with them. And as a politician you move through a growing period on becoming comfortable with issues as the campaign continues.

Many have written and described Palin as a female version of Ronald Reagan. I would say she is inspired by him, but she has to learn the economic side of Reaganism. The trickle down side of economics.

When it comes to taxes, it's very simple. You raise taxes (and this means all taxes to include property taxes and sales taxes) on corporations or individuals, the tax increases trickle down into the pockets of all of the working class by driving up costs of business/goods and eliminating private sector jobs.

There is only one reason for an increase in taxes. To pay for an increase in the cost of government which has an inflation risk built in and to increase the size government or funds some crazy Ponzi scheme done under foolish mortage lending legislation.

In Alaska, the size and cost of government has grown and as a result of that perfect storm that Palin came in on, ACES was passed and an increase in taxes was placed on oil companies and the state coffers bulged with money for that "rainy day."

The trouble is, that "rainy day" is in the form of forty five dollars per barrel oil pouring down on a budget that needs over sixty dollars per barrel oil to break even.

Moreover, granted there was a budget surplus, but that is being quickly dissolved and one would have to ask, what size of a budget surplus would Reagan have approved. In effect, the government is taxing beyond its need.

So given the current situation in Alaska, we are quickly seeing the aftermath of increasing the taxes. Investment in Alaska's oil patch, is limping along and signs of a collapsing economy are near.

In today's Anchorage Daily News, it is reported that: FLINT HILLS: If it ceases operations, the railroad and the airport would be hit hard.

For the Palin administration to even consider buying the Flint Hills Refinery, Ronald Reagan would be rolling over in his grave.

It's time for Palin to follow the trickle down economics of Reagan and cut taxes on the oil companies. The Alaska economy will demand it and so will her future political capital.

You might as well hit the bathroom now... it's going to be a long one :D Palin ping

You know I try to read both sides of an issues, even when it comes to Sarah (well I have to for most cases read the other nationwide and local), but so much of it is driven by almost an incessant need to tear this woman down I can't take it as anything, even adding a ton of grains of salt. However, this article is different, and rarity, something I have been looking for. Because as much as I love Palin I understand that she's human, just like the rest of us, and to know a person you need to know both the good and the bad. This article does this in love, not seeking to effigy a seemly good politician.

Next we have two articles that managed to cover anohter controversy about Palin. First we have an officer stating that politics got in the way of the arrest of Levi's mother. Then two days later, they refute it.../sigh

You mess with the grizzly, you get the claws.

Wow. I think I got pinged three times about this interviewThank who did btw. Great interview I've seen with Palin, bot in in written and audio form. This interview really is a canidad interview about some of the issues that both I and others would want to know about her.

People are video clip with Palin from a KTUU, a local NBC channel, about the election and goes very much more in depth into Palin running for President. I didn't get to finish (I've got 20 minutes to finish this and five minutes to get dressed), but what I got through was great!

Did I talk about Palin speaking at CPAC this year? Well if I didn't she is. btw if anyone going to coming from the south to see this? I would love to hitch a ride with anyone (Sorry I can't drive, and this is my main form of trans. I'd be willing to put in lots of money for gas :D)

We also two polls to Freep. Again I was pinged about this one (Thank ya'll again :D You make my day better) called the Weblog and how Andrew Sullivan, the man who was one of the main pushers of Trig not being Palin's son. Well he's winning in the best blog, and the only blog that is semi-conservative that has a chance is Hot Air. So go to the site and vote for Hot Air. Next one is from Greatwire on who you most admire.

I"ll get the rest which is just a couple up by the end of the day (I have to go now, Mom calling). Sorry about being so late, doctors, dentists and addiction giving up and feeding were the problem.

Well, the Wall Street Journal seems to think that ACES was a brilliant idea. They wrote a very good article about it. Here is an excerpt:

A few years ago, Alaska had a big problem. Despite high oil prices, the state's fiscal future was in peril because the state relies on only three aging oilfields for 80% of its oil and gas tax revenue.
In 2006, then Gov. Frank Murkowski, a Republican, proposed changing the state's tax on oil from a gross-revenue to a net-revenue basis. Instead of creaming 10% off the top -- which was how the mature oil fields were taxed -- Mr. Murkowski pushed to tax oil companies on their profits only, at a rate of 22.5%. The change in tax regime was meant to encourage investment in and development of new fields.
In effect, the state would become the oil companies' development partner. It would participate in the upside of oil and gas exploration, but only after the companies had recovered the enormous upfront costs of drilling new wells.
These costs are considerable. In Alaska, the locations are remote, the climate is extreme, the infrastructure mostly nonexistent, the environmental rules the strictest in the world, and there is only a short work season of three or four months a year. The costs make any project very risky.
Mr. Murkowski's plan turned into a disaster. It depended much on trust, but it lacked the transparency and predictability needed to win public confidence. One year after it went into effect, the Petroleum Profits Tax brought in far less revenue than expected and the state suffered a revenue crunch.
Somehow, the legislature had never properly defined accounting procedures and permissible deductions -- and the deductions came in much higher than expected. Meanwhile, as the shortfall appeared, a number of state legislators were on trial, under indictment, or under investigation for bribery by the FBI. These included some who should have done due diligence for the taxpayer on the proposal they enacted.
As a new governor in 2007, Mrs. Palin stepped in to address the fiscal crisis and restore accountability. Working with Democrats and Republicans alike, she chose a 25% profits tax. But in lean years the state reverts to a 10% gross revenue tax on legacy fields that do not require massive continuing inputs of new capital.
Relative to the old system, Mrs. Palin's plan -- called "Alaska's Clear and Equitable Share" (ACES) -- improves incentives for developing new resources. It ensures the state does well in boom times -- as it is doing now -- when oil prices are high. But it also hedges against low prices in the future by ensuring that oil companies exposed to commodity price swings don't face a crushing tax burden when commodity prices fall.
Her plan includes an escalator clause that gives the state a larger share of revenues when oil prices rise. This is common to production-sharing agreements all over the world.

That's just the country's leading financial newspaper. I'm sure an anonymous blogger who joined Free Republic very recently (i.e., just in for the astroturfing election season) knows much more than they do.

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