Month: March 2021

What do Mike Dunleavy, Muhammad bin Salman, Joe Biden and Vladimir Putin have in common?  They all want $100 oil, and they’re doing all they can to get it.  Alaska, Saudi Arabia and Russia want high oil prices for the income they derive from it.  Biden has thrown in with the environmental extremists in pursuit of a green energy future.  High oil prices discourage consumption, and reduce pollution.  They also incentivize the transition to alternative fuels.  The American consumer, especially the middle class which drives to work, is going to suffer, but as far as Joe Biden is concerned, they can lump it.  They’re sacrificing for the environment, and should be proud to do it.

As a result, the Alaska Department of Revenue sharply increased the projected revenues to the state from oil production.  This takes some of the pressure off the budget, and should reduce the amount needed from Permanent Fund earnings to balance the books.  The Governor and the legislature have some breathing space.

I believe revenues will continue to increase, as oil slowly continues its climb into triple digits. 

Not quite a year ago, oil sold for $19.33 a barrel.  President Trump managed to do something that had never been done before.  He got the Russians and the Saudis (OPEC +) to cooperate on curtailing production.  It worked, and a year later we’re at $60 oil.  The Russians and the Saudis, two of the top three oil producers in the world, will continue to constrain production, trying to balance it with consumption, and increase the price.  They’ve done it before, in cooperation with the other of the top three, the United States, and they can do it again, without active American participation.  Biden isn’t working with financial incentives.  He’s on a moral crusade.

For the State of Alaska, the pressure for new revenue   —   tax increases  — will decline, but it will not abate.  Alaska is on an unsustainable path, and it needs to be corrected.  Hopefully, we’ll have enough time to get it right.

But statutory fixes aren’t enough.  No legislature can bind future legislatures, so statutes restraining spending or setting the amount of the Permanent Fund dividend have no application in the future.  Only constitutional amendments can do that.

The legislature is considering amendments on all of these subjects, but none of them will easily reach the 2/3 vote required.  It’s doubtful they’ll pass.

In which case the people of Alaska have the once-in-a-decade opportunity to vote for a constitutional convention.  In November of 2022 that question will be on the ballot.  If a majority of Alaskans believe that they are capable of electing delegates to that Convention who are capable of crafting thoughtful and effective amendments, they will vote yes. 

And then we’d really have a chance to get it right.

James K. Polk was one of the most successful Presidents in our history, exceeded in his accomplishments only by Washington, Lincoln and Jackson. He had four goals when he took office in 1845, and he achieved all of them in his one term. He wanted to complete the process of Texas annexation, take California and its ports of San Diego and San Francisco from Mexico, settle the boundary dispute with Britain over the Oregon Territory, and reform the finances of the federal government. If you include Texas, the amount of territory he added to the United States exceeded that of the Louisiana Purchase.

He was the proud protege of Andrew Jackson, and completed what Jackson had begun. But he was not a good politician, and only obtained the Democratic nomination by promising to serve only one term. During his Presidency he was roundly disliked by foes and allies alike. Due to a horrifically painful operation when he was very young, he was probably impotent. He died shortly after he left office at the age of 53, an embittered and unloved man.

Donald Trump is not a politician, and never pretended to be one. Throughout his short career in politics, he has completely alienated half of the country. But in one term his accomplishments rank only behind James K. Polk, and ,of course, Washington, Lincoln and Jackson. He succeeded in doing what he said he would do, even to a greater extent than Ronald Reagan, who was a great President for winning the Cold War and revitalizing the economy.

Trump doesn’t need a second term to embellish his record. He has permanently reshaped the Republican Party, and the 2024 Republican nominee will only ratify this transformation. The Trump agenda, minus the personal Trump drama, will easily prevail without him.

He’s no James K. Polk, and he has a quite pleasant post-Presidency to look forward to. I hope he has a great time with his family, and avoids the labor of another campaign, and the virtual certainty that a second term would be something of a disappointment. It could never equal the first.

If you’re ever in Nashville, go by the State Capitol, and pay your respects at the grave of “Young Hickory”, the 11th President of the United States, and a great American.