Art Chance: 50 years, an oil boom, and how we broke the Alaska economy - Must Read Alaska
Connect with:
Wednesday, October 20, 2021
HomeColumnsArt Chance: 50 years, an oil boom, and how we broke the Alaska economy

Art Chance: 50 years, an oil boom, and how we broke the Alaska economy

gif ad for must read alaska donations

By ART CHANCE

My biological daughter will turn 50 in a few weeks. Her very pregnant mother and I were living in her childhood bedroom in her parents’ house in Atlanta. We’d had our run at being rebels without a clue; we’d run off to the Pacific Northwest, where she had some friends and I was something of a curiosity with my redneck Georgia ways.   

I had something of an ongoing controversy with Redneck Georgia law that remained unresolved.  We hadn’t had an “accident” and having a child together was a conscious choice. I had a decent job and we were able to provide for ourselves, but we both agreed that we needed the security of hearth and home to bring a child into the World, so we returned to Georgia.   

Drive a 1962 Chevy Corvair with no reverse gear across America and then talk to me about adventures; we had the time of our lives with the two of us and a half-Airedale mutt. That “Me and You and a Dog Named Boo” could have been written about us, but our dog was named Owsley; only some of you will know what that means. Her parents didn’t like me because I was Georgia white trash, and my parents didn’t like her because she was a Yankee. This was a marriage based on stupid, but she had a child in her belly.

We walked into the world of corporate Atlanta in 1971. Few married women worked in 1971,  so  I quickly secured a job as a management trainee for a major retailer; I’d learned to walk in a retail store, so it came naturally. I was “salaried,” so we didn’t count hours, but I was making $4 or $5 an hour, a princely sum in those days, in the South anyway. It was enough for a gated apartment complex with a pool and clubhouse, an Italian sporty car, and pretty good entertainment. We could send the kid to Montessori school, and my lady worked part-time because she wanted to. 

Banks and credit card companies weren’t generous in those days. My employer gave me a credit card with a $300 limit and somewhere along the way I got an American Express Green Card.  American Express once had that credit card thing down; you paid the bill at the end of the month, or you didn’t have any credit.  In those days, a Green Card was a status symbol. If you had a Gold Card, you were golden. Even though houses were only $20-$30K for nice three-bedrooms in the suburbs in those days, only those with good-in-laws could come up with the down payment when they were only a year or two out on their own.

We of that generation walked into paying the bills for President Lyndon B. Johnson’s “guns and butter” policy in the Vietnam Era. LBJ and a Democrat Congress determined to pay for the “Great Society” social welfare programs and the war in Vietnam with borrowed money.   

We of my time (born in 1949) walked into the world of paying LBJ’s debts. President Richard Nixon tried to keep it under control with what had once been regarded as wartime measures like wage and price controls. To add insult to injury, we had the Arab oil embargo in 1974, which crushed what was left of the U.S. economy.  

I had moved on to private enterprise and was a partner in a shop in Atlanta’s entertainment district.  We were living pretty high on the pig, basically a life out of “Good Fella’s,” until it all died as the oil embargo ended tourism.   

I bailed and bought a bunch of outdoor gear and a Land Cruiser and struck out “North to Alaska;” I’d read that they had that “Pipeline thing” going on there.

Just like Weimar Germany, Alaska’s heavily unionized economy allowed the economy to keep up with inflation; as the prices went up, the wages went up.  Alaska weathered the 1970s by inflating its economy, and while there were some tough times in the late Seventies, after completion of the pipeline but before significant oil revenue began to flow into the State treasury, Alaska prospered as never before.   

The early ‘80s were Alaska’s “Blue-eyed Arab” days; we had more money than we knew what to do with. And then it all went to Hell; the price of oil went from $30 and change to less than $10 a barrel.  Dreams of domed Capital cities and huge hydroelectric dams died painful deaths.

Fast forward to 2021: We have a broken Alaska economy. We have a faltering US economy as the result of the Chinese attack on the U.S. – yeah there is the hook for all you lefty trolls.   

Now we have to pay the bill for the last few years. President Trump’s spending on the China Virus was scary, but it was cheaper than a war that really wouldn’t have resolved anything.  We could have turned China into a sheet of glass, but it would have cost us some major U.S. cities, including Anchorage; you can print more money.

Now the communists, excuse me — Democrats, are being their natural selves and reaching as far into the cookie jar as they can.  Their so-called infrastructure and COVID relief bills are nothing more than “walking around money” bills for Democrat constituencies with a minor amount — 10 percent or so — that actually goes to COVID or infrastructure; typical Democrat sham.   

Between the Trump and Biden Administrations, we’ve added around $10 trillion to the national debt in the last year or so. That bill is coming due, and soon.  

The notion that the U.S. can just endlessly print money is today’s version of “voodoo economics,” fundamentally you can only print money so long as somebody will take your money. Recall that it wasn’t Christian ideas of sin and degeneracy that caused the decline and fall of the Western Roman Empire; it was the debasement of their silver currency to the point where nobody would any longer take their currency.   

The Chinese would be happy to have the Yuan rather than the U.S. dollar become the world’s reserve currency, and the Biden Administration seems intent on helping its Chinese friends do that.

The last several U.S. Administrations have rendered the Consumer Price Index meaningless; they’ve taken the economically volatile products that really give an indication of inflation out of the index, so the index doesn’t indicate much anymore, and they can claim that there isn’t much inflation, and they can control that with their “quantitative easing” and other central bank sorcery; go take a look at your grocery bill or buy some 2 X 4s if you’d like a reality check.

Just as the explosive rise of fuel prices in the run-up to the 2006 election and the crash of the housing market in 2006 “snuck up” on us, we will face 1970’s “stagflation within the next year or so; the U.S. economy is going to hell. 

My grandkids are older than my new-born daughter was in the early 1970s, but their world is just as daunting, maybe more so. 

Frankly, Alaska was our salvation; we could make ourselves worth more as the costs of everything went up; you couldn’t do that in most of the Lower 48 and many families went bust in the Seventies and early Eighties. Reagan and Volker’s steps to control inflation in the Eighties were dramatically painful; I knew families who had been free-holders since the late 1700’s who didn’t survive the Eighties as free-holders.   Most of us here in Alaska made it because we could ride the inflationary wave – until it broke in 1985.   All good things must end.

Our children and grand-children have lost a year and more of their lives; time they’re unlikely to get back. The economy is certain to crash in the next couple of years. We’ll see if there remain any people in the US who can rise to leadership rather than just to demagoguery; my money is on media-driven demagoguery.



Donations Welcome

Share

Latest comments

  • Sadly, Art, you are pretty much right on. Think 1930s and how that debacle ended. It’s been a good run but I worry for those grandchildren. My oldest is fleeing California for Alaska (and he’s Mexican-American). At least it is a chance to bring the family together.

  • Alaska broke its own economy from electing too many DRUNKEN legislators who cared more about parties over capital work not being much a good role model to constituents who followed in their leaders footsteps

  • If Alaskans don’t smarten up real quick, Alaska will mirror California. Seeing people camping in tents won’t be a luxury happy vacation, the sight will be the norm with tents going on and on for blocks spilling out of parks that were once used mainly for healthy recreation use.

  • All the money they’ve been printing won’t actually hit the economy until reopening, the current circulation is low, once that changes we will see the full impact of this folly, right about the time most people think their lives are getting back to normal.
    Just wait until they roll out the CBDC, what a horrible power trip that will be. The US is up to eyebrows in communism, and AK will go down with the ship if we are not very careful. Prepare for price spikes of 30% or more in all directions while you can.

  • This will be one of those many times that folks will earnestly hope that there really is the God that they sort of believe in, and that He will hear all their prayers. If there is no God, or that He won’t hear our prayers … we’re so screwed.

  • Alaska’s problem is and has been that they gave away their resources.

    Since the Russians sold Alaska the people that fished, mined, cut tree’s down or pumped oil out of the ground got the resources too cheaply.

    Since no one in Alaska feels that it is necessary to pay a few taxes the colonial powers keep on taking.

    Alaska even gives away its money and the resident still complain.

    When oil workers, commercial fisherman and others can make a couple hundred grand a year and not pay a dime worth of taxes you know you have a problem.

    We have seen the enemy and it is us.

  • The entire damn issue boils down to one thing and one thing only. Voting. It seems like conservatives have lost the will to survive. Not many like what is happening to Alaska but when it comes to voting, don’t care to take the time to add their vote and voice to counter the “political” disasters that are taking place all over Alaska. Sitting on your stern and waiting for someone else to save the day seems to be the rule. Not for everyone but if only 10% or so vote, the day will always be carried by the aggressive political side. As a result, the country once looked upon as “great” is headed towards extinction. Keep sitting on that sinking stern, conservatives. Karma begets.

  • As usual Art, you’re spot on.

    Alaska can survive. Will it survive? That’s a questions of leadership, both at the state house/senate level and more importantly, at the Governors mansion.

    We still have resources – we just need a political system that is intent on developing them “for the maximum benefit of all Alaskans”. Oil and gas, conventional and rare earth mining, fisheries, hunting and fishing, all of the classical elements. On top of that, we need to stand up to the federal government and tell them that we are not a colony… make good on the promises on the state compact and if you want to hold things back from that agreement – it will be a negotiation (not a dictate) and it will be an expensive negotiation for the feds.

    We need a strong governor and a legislature that will roll up its sleeves and get to work to stand up to this president and his congress. Its the only way we get out of this thing in one piece.

  • HARBORGUY, the basis of division in America today is the politics of ENVY, as in Thou shalt not covet. What one earns belongs to that one, not to anyone else! I do earn a decent wage, but sitting here now there have been 20 days this year that I did not labor 12+ hours. There are taxes and fees, which I pay along with every other working person. But looking your way, we should all be sitting in public housing with heat assistance, food stamps, Medicaid, free cable and an Obama phone, while berating the working class to work harder. The answer is development and jobs for all to be productive. A society which produces nothing cannot long survive. I am proud to be a producer.

  • Wrong! Oil pays lots of taxes – commie fishers pay less than their cost of regulation.

  • War has never been prevented by weakness. Possibly we did postpone the war with China by not responding to the Chinese flu in any real way so far as retribution. But read the WSJ today, China is coming for us. The next test is when they move on Taiwan; should be back down then too we will be tested throughout the Pacific. China is incredibly transparent in what it wants and in the strength it believes it has. China is coming for us. Europe will try to sit it out. Putin will stand by to pick up whatever falls off the table. This is 1936 and China is Germany, but the world is much smaller now.

  • All of those ignorant of true economics will continue to believe government provides money. Money printed out of thins air has no value, thereby limiting the value of all our money we have earned and saved for decades. All the bureaucratic drones living off the hard work and earnings of the producers will do everything possible, including theft of our earnings, to maintain their incomes.

  • Art, thanks for sharing with us. You old rabble-rouser. Your journey epitomizes the wayward style of youth in the 60’s, seeking out some truth and trying to figure out their place in the world. Your natural progression into maturity and a meaningful life is shared along with the majority of Americans from that era. Most of them grew up and acted responsible. Sone didn’t. Unfortunately, the ‘some’ that didn’t still have great influence on our political climate today {liberal college professors and old Lefties in journalism and the media}.
    .
    But Art, a Corvair? Without reverse? Your father in law should have shot you. Ralph Nader would have.

  • Chance, you need to write a book … “Drive a 1962 Chevy Corvair with no reverse gear across America and then talk to me about adventures …”. What a perfect first sentence for the Great American Novel!

    Besides that, you’re right the Consumer Price Index IS meaningless!

    And media-driven demagoguery is alive & well and living in Anchorage!

  • Dan Rogers: “We need a strong governor and a legislature that will roll up its sleeves and get to work to stand up to this president and his congress.”
    You’re absolutely correct, except those kind of people don’t exist in Alaska. You might fit the bill, but will you stop your life, run for office, and be the sort of legislator you advocate for?
    I won’t run for office because I have always “politicked” with 2x4s and tire irons. I would just be a bull in a china shop. What’s your reason for not going further than the comment sections?

  • @Kemosabe; The reverse broke early in the trip and fixing it wasn’t a viable option; it cost more than the car was worth. I learned that there were two kinds of people from our generation; those who went straight from school to government, entertainment, non-profits and the professions serving the non-profits and those of us who went out into the private sector; we got mugged by reality. If you went into government et al, you could keep the same dumb ideas you had smoking dope cross-legged on a dorm floor in 1969 for the rest of your life.

  • I have a past.

  • Art….Kemosabee:
    It’s these kind of interactions that we love at MRAK. Suzanne really DOES know how to pick them.

  • Art, I loved your book. Please write another.

  • Ellen: Seeing the differences in viewpoints, when argued on the merits, is educational. I actually learn new stuff here every now and then.

  • Josephdj: Myself as well. And there is no better outside contributor for Suzanne, than Art Chance. Honest to a fault, and he will tell you if he has been wrong before. He should be a History professor at UA.

  • How time flies…

  • @AKFIREFLOWER Thank you for the kind words. I have a 2nd Edition floating around in my head because the original is becoming dated. I thought I knew the communists pretty well, but the Obama Regime and its progeny have surprised me. The trade unionists and doctrinaire communists I dealt with were in the main rational actors. The world we knew didn’t end in a thermonuclear blast because the Soviets loved their children. The dominant powers in leftist politics today are nihilists and have no loyalty to anything other than power; they are more than willing to bring down the heavens. We now have two generations of citizens who have little knowledge of our history and traditions and have been fed a steady diet of hating America by the education racket and popular culture. So, while I generally understand the tactics of dealing with with the post-modernist Left, I don’t yet have a good handle on the strategy. I knew how to deal with people who for the most part wanted to live to fight another day; I don’t know how to deal with people who are willing to destroy everything in a quest for power.

  • It’s all about dominion, Art. Control.
    The devil seeks it and sets up myriads of workshops in which to propagate it.
    (interesting that the ballot counting machines are made by a company called,………..Dominion.).

  • @Art. Thank you for your reply. You could write about anything and make it interesting I think.

%d bloggers like this: