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Palin’s stimulus rejection

These thoughts about Alaska Gov. Palin’s rejection of about half of the federal stimulus money were put up by one of my Facebook buddies:

I’ll probably get reamed out for this, but what the fuck, fire away.

My questions relating to the fury directed at AK Gov Sarah Palin for proposing to turn down some federal stimulus money.

1. Don’t we have Billions in our state bank account? (permanent fund).

2. Doesn’t each resident receive free money every year and not pay state taxes courtesy of the big bad oil companies?

3. Can’t we make the state run on what we have?

4. Should we always grab for every dollar we can possibly get?

5. Are there other states that could really, really, really use the money a lot more? (Arkansas, Michigan, Louisiana, plenty more states without booming natural resource based economies.)

6. As federal tax payers, aren’t we just going to have to pay it back later?

7. Should we always receive the highest percentage of federal money per capita?

8. Do we Alaskans put on our “We’re so rugged, strong and independent” bullshit act and then have our hands out whenever there is some free money within arms reach?

9. Do we liberals hate Sarah Palin so much, that whatever she does, right or wrong, we are going to piss and moan about politics and curse the right wing?

10. In these hard economic times, shouldn’t we try to be team players and not drive the country deeper into debt when we are flush with oil money (for the time being) and our economy isn’t really that bad?

Caveat – I know we need money for education, I totally support that, and schools have to grab what they can, when they can. I know that many in Bush alaska are starving and freezing with the high cost of heating oil, groceries and shipping. I know there are villages without flush toilets, or else their buildings are washing away into the sea. I know times are tough all over, but I just want people to think objectively about what’s going on, how much money we have, how much we need, and how much we just want. I want Alaskans to be smarter about how we are using the money we already have and stop thinking Boom and Bust like gold prospectors. I want us to think about other hard hit places around the country where their economy has gone south, or east, or west, or just disappeared. I want us to just Think.

I’ll say up front that my view is Alaska should take the entire amount.  Here’s what I wrote to my state legislators after Palin announced her rejections:

I hope you are doing everything in your power to override the governor’s egregious rejections.  I am looking over a summary sheet of the parts that Palin approved/didn’t approve of the total $930m to which Alaska is entitled — and I cannot believe the sorts of items that did not make her cuts.  Looks like she took all of the capital project related money, and rejected anything that would help poor people, seniors, children and those with less ability and resources.  It is disgusting and super upsetting!

I’d call your attention to this column, listing some evidence that rejecting the part of the stimulus providing for unemployment compensation will compound the burden on businesses, because of commensurate changes to eligibility standards.

Thanks for your efforts to stop this madness!

Now let me try to tackle the items above one at a time.

1. Yes, we do.  But the Permanent Fund was specifically set up so it cannot be raided by the Legislature.  There are good reasons for this.  It is supposed to be a rainy day fund that will eventually allow the state to transition to a post-fossil fuel based economy.  That’s a ways off.

2. The dividends are an annual payout of a portion of the fund’s interest earnings [thus, the ebb and flow of the annual payout amount].  The dividends do not draw on the fund’s principal.  Again, it was all set up thirty years ago and the basis has not changed.  It is not “courtesy of the oil companies”.  They are essentially contractors.  The oil itself belongs to the people of Alaska.  It says as much in the state’s constitution: the resources will be developed for the benefit of the people.

3. That isn’t what is at issue.  The stimulus money was apportioned on the basis of population — not on the basis of whether each state is currently operating in the black or not.  It’s not clear what will happen if Palin prevails in the power struggle underway and Alaska does not receive the $400 million, but it’s reasonable to assume the money will go to other states.

4. The stimulus represents a unique opportunity, as a one-time, finite appropriation.  Alaska is near dead last among the 50 states in some disturbing ways — domestic violence; infant mortality; access to care; alcoholism and drug abuse to name a few.  Crime is on the increase.  We could use the stimulus money in creative, directed, thoughtful ways to increase preventive measures and education on all the above problems and several others.  This would ultimately save money, by curbing social problems.

5. See #3.

6. When Bush took over in 2001, there were surpluses as far as you could see.  In eight years we ran up the largest deficits in world history, due to endless foreign military interventions, outsourcing jobs [Clinton was involved in this, too], under-regulation of banks and Wall St. and tax cuts for the super-rich.  The situation we are in is a direct result of this, and the stimulus is the first attempt to change course and get to the heart of the problem.  It won’t work on its own, but in combination with rolling tax policy back to at least 1990s rates on the top 2%, and other remedial measures, it has a chance.  Got a better idea?

7. It’s the same situation in any lesser-populated, more rural and/or remote area in the country.

8. In some way all of the federal money is a legacy from Ted Stevens.  In another sense, it’s appropriate because two thirds of the land in the state is federally owned, and we’re a young state.  Most other cities the size of Anchorage have five to 10 percent of workers employed in government jobs.  In Anchorage it’s 29 percent.

9. I reserve the right to disagree with her policies, while not engaging in cheap mudslinging.  She should reciprocate by not behaving like a victim.  It’s not a personality issue with me.  Last year she vetoed about a third of the Legislative capital budget requests.  [No projects in Mat-Su were cut.]  The reason given for almost all the cuts was, “Not a state repsonsibility”.  She was probably technically correct in most of that.  But it was the way she did it, revealing the cuts at the stroke of midnight at the end of the Legislative session, when the legislators had left Juneau on recess.  She could have previewed her intentions, working with them and letting them know she intended to introduce an entire new paradigm, instead of what was being followed for years beforehand [partly based on statute and partly on tradition].

10. There was a guest editorial in ADN in December 2006 by Mike Mense.  It was after Palin won election and just before she was sworn in.  Mense had been an outspoken opponent of the Knik Arm Crossing project for some time.  His suggestion was that Palin should give back the federal monies secured by Stevens and Young for both the Knik and Gravina Island bridges.  Imagine the good will accomplished by this single simple gesture, he wrote.  The state might suggest the money could be redirected toward Katrina rebuilding or other more urgent public infrastructure projects.  Instead, she took the money, then later declared during the McCain campaign that she didn’t.