Palin's Geopolitical Prowess, Empowerment, and ACES Reform

There has been much said in the blogosphere about the changes to oil taxes that were passed in the Alaska State Senate this past week. Many loyal to Palin have seen it as a betrayal of trust by Parnell and the State Senate to what they consider Gov Palin’s major accomplishment. While ACES was extra-ordinary accomplishment by Gov Palin, changing it does not diminish her Governorship or her accomplishments. For those who consider alterations to ACES a black mark on her reputation, I would encourage them to consider the difference between a creation and a creator. Sarah Palin’s value rises far greater than that of a mere public policy document, and to confuse the two is a wee bit like hugging a tree to express one’s love for the Almighty.

To suggest that changing ACES diminishes Palin, or that Palin will be diminished by changes to ACES is pure balderdash. Government expenditures are growing through unfunded mandates. Oil revenue is declining because oil output is declining faster than the price of oil is rising. The budget is near collapsing, and I argued last year that we had already passed the tipping point in revenue. I called into question Governor Parnell’s own estimates as overly optimistic because it was predicated on a highly optimistic set of circumstances that I suspected would not materialize. They didn’t and I do wish I had been wrong. 

The situation may be direr today than it was back in the era when Alaska was considering ending the permanent fund that heralded Palin's rise to power and the ACES reform. It isn’t just financial. Back in that pre-ACES era, the state of Alaska (SOA) well had financial problems, but at least the Alaskan people had freedom and opportunity. Today's situation is far different and the failure is not ACES or Palin. However, circumstances and situations do require alterations to the arrangement of affairs, and Governor Parnell's tax change is a step in that direction. It is not complete, but it should do the job for the next few years. It isn't perfect, but it is politically viable and changes to the document that need to be made on economic linkages to the economy (which no one is addressing) can be made at a later time when industry viability is restored.

In changing the tax code, Alaskans are not killing Sarah Palin or marring her reputation. It is, without a doubt, one of the most emotional items on the docket for Alaskans.   Indeed, I would argue that those who tie Palin’s accomplishments to ACES alone are performing a disservice to the former Governor. If you think Sarah Palin was only ACES, then you really do not understand the forces that brought her to power or the people who rallied to her cause.   ACES was a small component of a greater empowerment agenda. It was not trivial, but it was the appetizer, the opening act, not the main item on the menu.  I would suggest that those who think it was only ACES to read more about the former Governor.

Palin’s contribution was the empowerment of the people against the establishment elite of both parties.  The tax code was only an example.

 The “new policy” or “modification to Alaska’s Clear and Equitable Share (ACES)” or however you choose to view it, is not entirely finished, but is likely in the form it will be in to arrive at the Governor’s desk. At the time of this writing, it still has to wander its way through the State House of Representatives. I suspect the media attention around it will be cluttered with stories from days gone by of evil multi-nationals who will consume our flesh and eat our young. I suspect there will be blogs written on the left about the unraveling of the Palin agenda and Palin blogs written about the return of the corrupt elite.

Perhaps it is. But thanks to Palin, the dark mirror that masked the global elite has been shattered and we at least now know what devil with whom we are sleeping.  We certainly are aware of the resident evil emanating from the White House into the daily lives of those who live in the farthest reaches of the waning American empire. The world for which ACES was written is gone, an epoch to be revered, and a morsel to be savored. However, it is gone, and chewing the fat over Alaska's next chapter has gone on for too long because an emotional value that has been placed on a public policy document.  Far too many have enshrined Gov. Palin in ACES, doing both the former Governor and the state a great disservice.

The world in which Governor Palin wrote and implemented ACES was vastly different than it is today. In that world, the United States had a President who understood the importance of fossil fuels for the American Economy. In that world, America had an EPA which looked out for the people of the United States, rather than the interests of radical environmentalists and global elites. In that world, oil reserves were well established, and Alaska was enviable. Alaska had suffered two vastly different governors, Tony Knowles and Frank Murkowski. In the end, both had been considered by the residents all too cozy with the petroleum industry. The state was teetering on bankruptcy; but it was still a land of enormous opportunity and freedom.

Gov. Palin well understood the geopolitical context of Alaska and its importance to the oil industry in that era. Alaska did have some competition from other states in the U.S., but it was clearly the energy jewel in America, with rich, proven reserves.  While often berated by the media for not understanding the “Bush Doctrine,” Governor Palin well understood that Alaska’s other competitors were not places where experienced labor would want to live and the risks associated with those investments. Despotic nations like Venezuela and Libya were competitors, along with Russia, Saudi Arabia, and a host of places that the lacked the political climate that investors prefer. From the perspective of oil, Alaska was the best place to do business. True, it is cold, and requires unique gear. Politically, however, it was not even a contest.  Who would you rather do business with, Sarah Palin in Alaska or Momar Kaddafi, Hugo Chavez, Vladamir Putin, a Sharia Sheikh, or Iraq’s PM de jure?

In addition to a dangerous political environment in those other nations, there were also tax rates in those nations that were extra-ordinarily high.  Alaska’s political peace, safety, and freedom, coupled with low taxes were very profitable for oil companies and a low risk for investors. She understood that this peace and security gave Alaska a monopolistic position in the market place from which to reap quazi-rents from producers for the state.  By establishing a progressive state tax, she was able to secure the revenue for the state budget, rebuild the reserve, and maintain the dividend by exploiting that geopolitical advantage.

But there were also other important differences domestically and inside the state of Alaska from today’s Alaska and the Alaska of ACES.  Back then, elections in Alaska were still honest, or at least we believed them to be so.  In that world, a 70 year old Alaskan could cross the river to go home without search, seizure, and arrest by the National Parks Service. In that world, the Department of Homeland Security would never dream of flying Howitzers suspended from a helicopter over Fairbanks, Alaska in a display of authority under the guise of a training exercise. Had they done so, there would have been an outcry by our state legislators in both parties rather than silence granting approval by our governing officials.  In that world, the red, white, and blue meant something good and decent and the powdered blue hat purveyors of global harmony had the good sense to know they were guests, not the masters of the land.  In the world that Palin wrote ACES, Alaskans were citizens of an American Republic, not quazi serfs of an empire, and they  loved their country and sent their young to defend it.  They were not concerned about a the looming tyranny that seemed to be approaching from those who say they are Americans but do not seem to behave as such. It was a different world,  a different America, and a different Alaska.

Alaskans still had their uncommon freedom. This is no longer so.

ACES was a heroic move that saved the state. It made Gov Palin a folk hero to the people of Alaska. Even so, I never really regarded it as her major accomplishment. I also would not regard it as trivial.  But I always thought that it demonstrated Gov. Palin understanding of the world stage, and Alaska’s ability to capitalize on Alaska’s unique attributes in that area. That was her strength. For someone who the media claimed did not know foreign policy, I don’t recall any other Governor of any other state having to wrangle oil profits from Hugo Chavez. I don’t recall any other Governor’s name being on the minds of Middle Eastern sheiks, and I certainly did not see Vladamir Putin take notice of Alaska in the way he did during the Palin era.


ACES also demonstrated that Alaska could hold its own on the world stage. This was something that did not escape the attention of the Alaskan people. She was an Alaskan for the Alaskan people in word and in her actions.  She was simply doing her job as governor and helping the state achieve economic and energy independence. It was a case of a governor actually doing their job, which had become a novel concept in Alaska in the post Hickel era.

 What was important about the Palin years was not just Palin herself, but the empowerment of   Alaskans. They were able to break the bonds that silent globalist entities had placed on the state. The amber glass hiding certain puppet masters was exposed.  Palin proved what Alaskans learned in a by-gone era in the lessons in populism: when the political left and the political right formed an agreement that unified Alaskans, the state could exercise real power globally. In the Palin era, this was “the backbone.” It was a curious and powerful combination of those who had supported or deferred to Ted Stevens, Walter Hickel, and Joe Voegler.  In more recent years, the back bone was coopted by Senate Democrats under the guise of a bi-partisan majority. It began to push a radical socialist agenda under the guise of populist bi-partisanship. It was not something that anyone in the Palin movement would recognize from the Palin era. It became an arm of the Obama Agenda, and had to be eliminated. It required those who would prefer a quiet life in the woods to interject themselves into political contests that one would ordinarily ignore.  But it was an exercise of empowerment that harkened back to the Palin era and included large blocks over voters and groups to accomplish. The back bone had to be taken back to save our state, and the empowerment that Palin personified was used to change the state senate by the very people who had risen up in past times to put Palin in office.

These changes have not been done in a dark place, but in the public purview with the full knowledge of the people. For me to read bloggers suggesting that these tax changes were done in some dark corner under slight of hand to perpetrate some evil on the people shows they are not keeping current on the events of Alaska. There was nothing sneaky here, and any Senate Democrat who suggests that is being dishonest. This is not the first legislative session on this bill. It has been studied, evaluated, and examined in the open. Alaskans are well aware of the dice we are rolling. It is a hand we are being forced into: turning to bankrupt federal government or applying supply side economics?


 Palin’s empowerment of the Alaskans people was something the establishment and ruling elite took note;  that fledging colony that had been allowed to enter statehood 50 years earlier was no longer a mere cesspool of serfs, political and economic refugees that could readily be forgotten and managed. The rest of the world took note that this radical little cadre in the ice box had not been indoctrinated in global governance, and that its people still held ideas that still resonated with the rest of the American people. It became apparent that the dangerous concepts such as personal sovereignty, limited government, and inalienable rights that were taught in camp fire session in the woods of Alaska had somehow crept into the mainstream thought and political dialogue. Alaska’s notions of liberty and freedom and habit of reading the Federalist papers and the Anti-Federalist papers began to infect America. Ultimately, Gov. Palin paid a high personal and professional price in the forms of various attacks from the establishment of the left and right, and  that is what led to her resignation, not ACES.

The Palin attacks were not because of oil per se, but this recognition of the America’s founding principles that became personified through her.  It was the recognition that these dangerous notions of a sovereign people born with rights from God, of the value of the individual as a citizen not a serf of the global elite, and the power of the people could radically reverse the globalists agenda into a state worthy of its star on the field of blue. That is what Sarah Palin really represented and in that context, ACES pales in comparison.

 ACES is hard to change for that reason.  It is a chink in the armor in the minds of Alaskans. It is a recognition that Alaska does not have a place on the world stage anymore; indeed it is not even a blip the halls of Congress. It is a confession, try as we might to pretend otherwise, that Barack Obama and radical EPA agents are running the show, and driving up production costs and prices. It is the recognition that the powder blue hats and green ooze blooded creatures exercise authority in our land through an alphabet of agencies and regulations that are strange to our ears, and seem to not have come from an authority for which anyone voted or consented. Oil prices are  rising through their actions as they raise production costs. It is not translating into new fields or state profits. Indeed, there are often times when the EPA is fighting another branch of the EPA, over restrictions, permits, and province and nothing gets accomplished or produced. They have become a strangle hold on production.


Remember, the high tax rates in Aces were predicated on greedy oil companies, not skyrocketing costs due to environmental regulation by a group of radical environmental terrorist who now hold positions in the EPA. The latter contingency never entered anyone's mind when ACES was passed. Nor did anyone ever believe we should model Alaska after a socialist nation.

 The peace between the political left and political right cracked last year as the left defended Barack Obama and openly and actively pursued his agenda and fashion Alaska as a socialist entity. They have been about this “under the wire”  in our state senate over the past year 4 years and did a great job of disguising “study it more” as a thorough and methodical approach to reform. I can even tell you the precise moment that the back bone broke: 11:14 am on January 23, 2012. It was the final straw and the gauntlet was thrown crashing to the ground. It was the speech that transformed the reform of ACES to something entirely different that is something the Senate Democrats were never able to comprehend.  To listen to Democrat state senators, such as Hollis French, argue that we should be like Norway was over the top. It became about more than money, and it became about the preservation of private property ownership, free market capitalism, and the American way of life. Even moderate Democrats could no longer stomach the “Let’s be like Norway” speeches from Hollis French. The more he talked about Alaska should be like Norway, the more Alaskans understood that if we didn’t make some kind of changes quickly, our very existence would be radically altered to look like a poster child for socialism. To have Vic Fisher rolled out yet again as some great authority on economic development is revolting to those in the populist cause and an rather insulting to the senses of interior residents who know full well that the southeast is using those oil profits to subsidize their docks and tourism industry infrastructure at the expense at the rest of the state. To listen to Sen. Gary Stevens misconstrue the words of Jay Hammond to justify "do nothing" as an economic policy dictated in the Alaska Constitution to enrich his own interests is an insult to the historical record and the Alaskan intellect, particularly when he has enriched his own district with no small number of subsidies. Bert Stedman has built a veritable empire in like manner and has been no small part of the problem. Keeping the people segmented and ignorant was the key to their success. Last summer, even their own constituents began to invite people down to see the display of vast pork that dots our coastal areas to the detriment of interior residents.  To suggest the rest of the state live off ice cold air pudding as they use profits from ACES to enrich their fiefdoms and starve the rest of the state was too much for any Alaskan to bear. The injustices were decried up and down the George Parks highway and a greater unity was fostered among the interior residents.  It was these actions that fostered the creation of unity among people of the state who oppose socialism, radical economic terrorism through the green agenda, stupid people, and Muslim appeasement. Oil companies fall naturally oppose these groups.

 This by no means should suggest we are all now Conoco Phillips; everyone knows that someday our paths will again depart. But for the moment, the enemy of our enemy is our friend, or at least, our temporary political ally. Will these companies “rape, pillage, and plunder,” and eat lobster dinners on our dime as Sen. Wolechoski suggests? Probably. But at least we will get tip money, or the orders to produce the plates upon which those dinners are eaten, and that is better than what we are getting today. Under the current regime, the state is not even getting tip money; that all goes to those in the ecotourism industry in the southeast and the rest of the state is left to starve. There is has been no new production, just the trickling of legacy wells like an old man with prostate problems. There are new hires to meet new federal regulations, but there is no substantial number of new hires that are connected to in an increase production. It is a classic case of the southeast tourism business raiding the state coffers just as assuredly as the oil companies did in times past. If you seek to find crony capitalism, look there, not in the Interior.

But, I digress from my main message...

The world is a different place today. True, some of Alaska’s global competitors are no better off. Libya is even more hazardous than it was in the Palin years. Saudi Arabia is facing the recognition that its reserves are dwindling faster than they have cared to admit. The Middle East remains dangerous and Arab Spring has taken a new meaning in the English vernacular. Norway, that once safe quiet place seems to look differently than it did a few years past, and may well resemble a Middle Eastern nation by the end of the decade. But other competitors have or will improve their competitive posture in attracting investment dollars. Hugo Chaves is dead, and things are changing in Venezuela and the political risk of investing in that nation may diminish over the next few years. Russia and China are no longer the bad political risks they once were and are actually considered more favorable for business than America. Even worse, they have formed an alliance of sorts, at least for now. This hurts Alaska significantly. This is a direct result of Barack Obama’s foreign policy of appeasement and neglect of spheres of influence, not Governor Palin’s ACES.

Even more challenging for Alaskans, other states with better tax climates and more pleasant amenities have risen on the scene as major producers due to changes in technology and discoveries. North Dakota’s rise on the oil stage so radically damaged Alaska’s economy that one would be hard pressed to walk down the streets of North Dakota and not meet someone from Alaska. Villages have become ghost towns as the quiet stampede to the fields of North Dakota have drained Alaska’ best and brightest just as quickly as the fields of Afghanistan and Bosnia did in times pasts. Oil wells in Texas that went out of production 100 years ago are seeing new life and Alaskan emigrants report having fun with Texans by suggesting they are from northern California. Pennsylvania is seeing a rebirth in production, and even Illinois is seeing a revitalization of its fields. While I could say many unpleasant things about Governor Quinn, he is no Hugo Chavez. Illinois may have high tax rates, but compared to Alaska’s tax rates, they are a bargain. All of these states have meteorological blessings that elude Alaska’s North Slope and have culminated to conspire against the America’s jewel of the north.

Economically, Alaska has to sweeten the pot to get back into the game, or it face its own demise.  What form this will take has been debated more extensively than any other subject I have seen debated in Alaska. There are people for the tax change, there are fewer against it, and there are people packing their bags. We know, as a state, what we have to do. We don’t want to do it. We have all watched the hearings, testified, written letters, made phone calls and read revisions, amendments, and amendments to the amendments.  360North is on everywhere, even on security televisions behind the counter of small rural dry goods stores. As DHS Chinooks practice lifting Howitzers and flying them overhead, the rest of Alaska pauses what they are doing to watch the oil tax hearings with one eye, and the skies with another. The testimony comes on, and chat boxes come alive, helicopter blades whir overhead and people who have never met, and likely never will, are discussing the matter. Unlike the Federal government, this is not being done in the dark behind closed doors or in inconvenient times and places that escape detection. Anyone who doesn’t know what is going on is willingly ignorant. This has gone on for two years, and represents no small amount of work on the part of those elected, and those who helped elect them. The urgency of the matter is well appreciated by the residents of the state.  

 It isn’t just the money. Every one of the problems that Alaska has faced came on the heels of either a failed foreign policy of appeasement or devastating domestic policy of rebranded socialism of Barack Obama’s administration. So please, both Palin supporters and haters, do not take the change in taxes as anything more than it is, simply an application of supply side economics in an environment where the competitors have similar political risks and better amenities. It is not an indictment of her, and it if it an indictment of anyone it is Barack Obama, not Sarah Palin. It is not a vindication of anyone, including Frank Murkowski. It simply is what it is, a necessity to adapt to a changing world where those who were once enemies are friends, and those who were friends are no longer qualified for the title. 

Gov. Sarah Palin’s major achievement was not simply ACES. ACES is a document that governs the affairs and arrangements of people and resources. Arrangements can be renegotiated as times and circumstances and parties dictate. It was AN accomplishment and an important one. But that was not Gov. Palin’s final act, nor will it, in the final analysis, be her most important contribution. That has yet to be written and can only be written by Gov. Palin herself.  But the Palin legacy, for Alaskans, indeed for all Americans, is the empowerment to determine our destiny, and the battle for freedom seeking people to unite, to take back the ruling authority from establishment elite in both parties,  to preserve and reestablish our economic and political liberty embodied in our constitution and to pursue the blessings of liberty. Anything else sells her short and fails to value her true contribution to the Alaskan and the American spirit.