Leaders Misunderstand Economics 101

Commentary.

We find it revealing that the current mindset of Alaska elected leaders seems to be: 1) Raise taxes on those who supply major source of money and jobs for Alaska, then 2) witness a dimishment of money and jobs, then 3) ponder about how to give incentives for improving the investment climate but only if an employer will guarantee that incentives will be spent in a certain way.  (Note: this is the characteristic of a government that wants to control the 'means of production', not a government that wants to be inviting to investors.)   -dh  

Alaska Dispatch, by Rena Delbridge.  Rich in resources but plagued by remoteness from markets, small population and high costs, Alaska has struggled since statehood to realize the full promise of its natural wealth.  With oil production on the decline, the economy isn't looking particularly rosy going into the future. That's left policymakers wondering how much the state can give up in order to advance the developments -- on and off the North Slope -- that leaders believe would best serve the state's interests. Aside from the Mother Lode projects, like Prudhoe Bay or the proposed Pebble Mine, those developments aren't necessarily eyed favorably by the private sector. That leaves Alaska politicians to advocate various levels of subsidies -- call them incentives, credits, inducements, loans or grants -- to get what they want.  "We have to be competitive, and we have to look at what our goals and policies are as a state," Sen. Bill Wielechowski, D-Anchorage, said. Everyone wants more production in Cook Inlet, on the North Slope, more renewable energy projects. "The question then becomes what levers and triggers are available to the government to encourage those things. It's one we're really grappling with this year. You don't want to give incentives for things that don't have to be incentivized."