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The state government of Alaska is the closest thing in America to a socialist state.

Alaska is the closest thing in America to a welfare state.

Alaska has fostered a culture of dependency for its 670,000 residents.

The governors, past and present, the government of Alaska, its representative in Congress, its two senators have for years created this culture, and they actively seek to extend it for the foreseeable future.

Each of the statements above seem to fly in the face of Alaska’s romantic image as the last frontier, Arctic and Subarctic wilderness, home of end of the road individualists, subsistence hunters, snowmobile racers, dog mushers, gold miners and unassimilated native Americans.

When Alaska joined the United States in 1959, its huge land area also had the fewest people of any state.  The state lacked the solid infrastructure, roads, electric power grids, hospitals, universities and the like that would be required to open the state up to development, tourism, natural resource extraction/exploitation and to meet the standards expected of an American state.

In the beginning of statehood, it made sense that Alaska would seek the help of the other 49 states to bring itself into the 20th century, and there is no evidence that the other states begrudged Alaska those resources needed to make that happen.  Alaska lacked the tax base necessary to build that infrastructure, and certainly did not have enough people to pay the millions of dollars necessary to create a comprehensive road network that was needed to develop the state’s economy.

Along the way to the creation of this welfare state, the North Slope of Alaska was found to contain billions of barrels of crude oil on state and/or federally owned land, and under the seabed.  The oil was not commercially exploitable until a pipeline could be built and the oil was available for shipment to markets from an ice-free port.  This need, of course, was the driving force behind the construction of the thousand-mile long Alaska Pipeline, both an engineering and environmental marvel which crossed permafrost, mountains, large bodies of water and streams.  This was by far the largest piece of infrastructure in Alaska’s history, and one of the biggest in American history.

Once the oil started flowing, the State of Alaska began collecting a tax on each barrel of oil extracted from the North Slope and delivered to the pipeline, approximately 400,000 barrels per day in the early days, and now 300,000 barrels per day.  This royalty created a bonanza for the state government, and the state was able to balance its books, cut personal taxes to very low rates, and it was even able to rebate part of the royalties to each and every Alaskan resident, the rebate was, until recently, $2,000 per resident, and recently, that was increased to $3,200 per resident.  Thus, a family of seven, Governor Palin’s for example, will receive about $22,400.00 annually; this includes her adult son who is in the Army Reserves/National Guard.  This is clearly a dramatic implementation of redistributive economic policy from corporations to citizens.  While the people of Alaska do not own the means of production, they do collectively own the oil itself, and extract from the oil companies a lot of money, enough to finance the state government to the degree that only 15% of the state budget comes from tax sources other than oil royalties, and the state government continues to run a surplus even after the citizen rebates.

In the early days of statehood, before the discovery and exploitation of the oil resource, Alaska was dependent upon Washington for most of its infrastructure development, and they had developed, through the congressional seniority system, and the development of long term safe seats, a very strong political "pipeline" which delivered large amounts of cash to the Alaskan government.  In the 1970’s after the oil and its cash began flowing into the state coffers, the suddenly flush state was able to maintain its grip on the handles that dispensed large amounts of federal dollars to Alaska, even though the state had the means to make many of these purchases on their own.  In 2006, this amounted to $2069, from the Alaska oil revenue-fueled Permanent Fund, per Alaskan, or in another way to look at it, Alaska received back $2.50 for every dollar in federal taxes they sent to Washington, further reducing the state tax burden on Alaska residents.

The effect is that both the State of Alaska, and its residents both have become dependent on the tax effort of others to maintain or enhance their standard of living, and to balance both their family and state budgets.  In fact, it appears from an objective viewpoint that both the state, and its citizens are on welfare, even though it appears that they do not need to be.  Now, if the state suddenly quit sending thousands of dollars to each and every household in Alaska, that would most likely be the cause for government heads to roll, and it appears to be politically untenable for Alaska lawmakers to take this step.  The extraction of big money from the oil companies gives the appearance that the state actually owns the oil, and its sale to the oil companies, with the express intent to redistribute the funds is essentially socialist, and very indicative of a true welfare state.

This dependency on redistributive policy, and the joint dependency on extracting cash from Washington and the pockets of Americans from all of the other states (Alaska by far has the largest per capita transfer payments from the federal government) show no sign of abating, as the current governor, Ms. Sarah Palin has requested $500 M from Congress in her two years in office, and prior to that, in her role as mayor of tiny Wasilla, Alaska ( 7,000 residents) sought $27 M in federal earmarks for her city, indicating a willingness to continue the culture of dependence that has developed over the 49 years of Alaska statehood.

Despite all protestations to the contrary, it appears that the government and governor of Alaska only make noises that cash from Washington is not to be desired, that only happens when a political spotlight has been shone on them, and when the light is switched off, it becomes business as usual.

Senator McCain is asking Americans to believe that a governor fully committed to a socialistic downward redistributive economic policy, which is totally in contravention to Republican orthodoxy in the other 49 states, that is, upward redistributive policy from lower income taxpayers to the wealthiest taxpayers, and the shifting of tax burden from the corporations and wealthy citizens to the middle and low wage earner, would make a good Vice President, or in the event of his illness, disability or death (he is 72), a good President.

I don’t even think the Republican power structure can look at this record and think that Sarah Palin is "one of them", and could on reflection, support her candidacy.   Can anyone imagine that a Republican president would support a policy of soaking the corporations, soaking the rich and giving the money away to the poor?  It’s preposterous, but that is exactly the policy Sarah Palin has followed in Alaska, and in fact, she upped the ante recently by supporting, due to the windfall brought on by high oil prices, and implementing a one-time $1,200 per resident increase in the oil company transfer payment, which will reinforce and strengthen the dependency, and not to mention, tend to make the voters loyal to her.

So that is the saga of how Alaska, the state of rugged individualists, became America’s welfare state, and how the Alaskan Republican establishment supports that dependency, which in turn supports their continued employment in elected office.  A co-dependency, if you will.

Alaska oil revenue article

Alaska welfare state comment from Republican.

Anonymous republican's statement regarding Alaska's welfare state

So that’s my take on Governor Sarah Palin who has lately taken to criticizing Barack Obama and calling him a Socialist, or Marxist or Communist.  She really shouldn’t be pointing fingers.

Originally posted to Ohiodem1 on Wed Oct 29, 2008 at 06:21 AM PDT.

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Comment Preferences

  •  Tips for (4+ / 0-)

    calling out a socialist who is calling someone else a socialist?

    It is time to renounce fear and go out and kick some Republican Ass

    by Ohiodem1 on Wed Oct 29, 2008 at 06:22:15 AM PDT

  •  Why don't we focus on simply cutting (0+ / 0-)

    costs.  I still am confused by this.  We currently have debt in excess of $60 trillion dollars.  The repugs for the last 8 years went on a massive spending spree increasing total debt.  The problem I see is that McCain wants to cuts taxes even more and hasn't really come out for any serious spending cuts.  Obama on the other hand also hasn't come out for spending cuts and actually is proposing new spending.  He also has stated that he wants to cut most people's taxes.  Isn't anyone worried about this?

    Shouldn't both canidates be focused on cutting costs not starting new programs since we can't even come close to affording what we currently have?  Honestly it makes no sense to cut taxes or propose any new spending.  Hell, it doesn't make sense to keep spending at the same rate we do.  We aren't even close to affording it.  To day every household in America needs to pay the goverment around $500,000 just to get the federal government back to square.

    Shouldn't we focus on that?  I would think the american public would be most concerned with our debt or at least they should be.

    This is my major gripe with both parties.  No one should propose any tax cuts or spending increases.  Both canidates should be proposing massive spending cuts.  We need to drop spending at least 30% and probably more to start working our way out of this debt.  No one seems to care yet you will since we are alerady close to bankrubtcy if not in it already.

  •  A rose by any other name... (2+ / 0-)
    Recommended by:
    bleeding heart, Ohiodem1

    Your diary is right on the money. I don't understand why this paradox isn't being brought up more by the media or Obama's campaign. I know Olbermann did a bit on it yesterday, but it needs to get beyond his show.
    Thanks for hard work!

    The radical invents the views. When he has worn them out the conservative adopts them. - Mark Twain

    by truthnow on Wed Oct 29, 2008 at 06:40:21 AM PDT

  •  The dishonesty of the "socialist" smear (2+ / 0-)
    Recommended by:
    bleeding heart, Ohiodem1

    is astounding.

    You're absolutely right about Palin and Alaska -- if there's any state in the union that truly operates like a socialist state, it's Alaska.   Palin mostly divvies up the state and federal dough.   She sure doesn't do a hell of a lot else -- except make nasty partisan attacks in order to beat opponents, so that she remains the one with the power to divvy up the dough.

    Beyond Palin and Alaska, the whole socialist / Marxist line of attack is pathetic.   They tried it on FDR in the 1930s, too... and failed.   He remains one of the most beloved Presidents ever.

    If the Republicans TRULY believed that taxing citizens is de facto socialism, then they would be screaming for abolishment of taxes.  Period.

    Beyond that, we're just talking about how taxes are structured.   The Republicans have decided that the real burden of paying for our military, our infrastrcuture, and all of their salaries in Congress should be given to the middle class and poor, not themselves and their rich benefactors.

    That's all we're talking about here.   They are greedy, dishonest, and shameless.   And they'll say ANYTHING to game the system against the middle class -- against most of America.

    JOHN McCAIN = George W. Bush's 3rd term.

    by chumley on Wed Oct 29, 2008 at 06:45:19 AM PDT

  •  Palin Oil pipeline to nowhere (2+ / 0-)
    Recommended by:
    bleeding heart, Ohiodem1   this whole  pipeline could be like the bridge to nowhere

  •  Dumb user question (1+ / 0-)
    Recommended by:

    as a non-economist: what would be the impact of many (as in lots) of us moving to Alaska to be part of that socialist redistribution?

    Although this question could be seen as somewhat tongue in cheek, the fact is that there are people losing their jobs and homes. Should/would they gain some advantage by relocating to Alaska where they would get some financial, unquestioned welfare? Perhaps that would give us a way to showcase Alaska:

    "Lose your job? Your home? Your livelihood? Well, come to wonderful (actually, I've heard it's a lovely place) Alaska where we 'share the wealth' and provide support for all our residents."

    Again, a bit facetous, but how far off? Could be a lifesaver for some.

    As we have discussed numerous times, OD1, is that all we need to do is look at the accusations the R's throw at us to find out what the R's are actually doing.

    Spot on diary. Thanks.

    You can always count on Americans to do the right thing - after they've tried everything else. -- Sir Winston Churchill

    by bleeding heart on Wed Oct 29, 2008 at 09:40:31 AM PDT

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