Wednesday, May 13, 2009

On Stimulus and Energy Funds

While thinking about the energy fund battle and the stimulus in general, I thought about what Governor Palin's decision-making process on these funds might have looked like.

There are four main reasons, in my opinion, why she would reject funds:

1) Accepting the funds would add to the problem of growing our national debt, which she is clearly opposed to.

2) She has to certify that the money will create jobs and stimulate the economy.

3) The "hole" left behind because of built-up expectations once the money is gone.

4) The strings attached to the money.

Okay. Right off the bat, option number 1 is off the table because rejecting the money for that reason is pointless. If you reject the money it just goes to other states, so the debt is not lowered at all. It would go to places like California that would waste it anyway. So, since option 1 has no legs, let us proceed to option 2.

Option number 2 was what was originally addressed in her stimulus press conference. She accepted the money that would go towards infrastructure projects because she could certify that those funds would create jobs. The other funds that would go toward government operations, she wasn't so sure about. She couldn't accept them out of hand in good conscience, but rather than reject them out of hand she put them before the legislature for discussion and public input.

I think all would agree that her decision-making process so far is perfectly reasonable. The media of course went crazy with the spin, not only on a state level, but on a national level. For instance, Neil Cavuto ran stories comparing the amounts "rejected" by various governors implying that it was some sort of contest. "Whoever rejects the most wins." This was a gross mischaracterization, and proof that even Fox cannot be trusted to get Palin stories straight. They just can't see past the end of their national nose.

Lieutenant Governor Sean Parnell hit the talk radio circuit to try to combat the mischaracterizations, but the damage had by and large been done. So, the money left to be accepted goes to the legislature. The Governor has answered potential problem number 2 by laying the uncertain money in the legislature's court. Now, on to numbers 3 & 4.

The strings attached and the holes dug were battled out in the legislative process. In the end, the public made it known that they wanted the money, and the Governor got them to understand that it was one-time money, and they better only use it for one-time things. The legislature got on board with that, even issuing statements in their stimulus money decision that the school districts must realize there will be no money after this, etc.... So, Number 3 is taken care of. Anyone who comes crawling after two years asking for more will get the door slammed in their face.

Having eliminated most of the hurdles of 1, 2, and 3 the Governor was able, in good conscience, to acknowledge the legislature's decision and accept most of the money, putting out a statement that her administration would now see to it that the money was spent in a responsible way. The only problem left was number 4, the strings.

The energy funds had some major strings attached. Here's the basic gist at this point: The Governor was willing to take most of the stimulus money because she was able, with the legislature, to get rid of most of the problems that came with the money. But the Governor will do what is best for her state. If she hadn't been able to get the concessions she did, I think she would have rejected more. She was not able to fix the strings attached to the energy funds and decided that taking the funds would simply not be worth it in the long run. It would arguably be more expensive for the state to accept this money and then have to grow bureaucracy to uphold the energy codes than if the state just allotted their own 28 million at some point. (On a sidenote, the state budget this year has already set aside 100 million for energy.)

The energy funds fall into the category of number 4. Those trying to get her to take the money are using the number 1 argument, that the money is just going to other states anyway. But at the end of the day, the losses that would come by having to maintain the conditions surrounding this money outweigh the gains to Alaska. So the Governor could not in good conscience accept them.

Let me put it this way; Alaskans should understand the concept of bait on a hook. That bait sure looks good, but you bite down on it and you'll get a hook through the roof of your mouth that you won't be able to shake free from. The bait is the yummy money; the hook is a loss of freedom. As the Gov said on her Twitter page, it's really an issue of federal vs. local control of Alaska's destiny. Now you can disagree with her position, but the Governor has the state's best interests at heart.

Those urging the Gov to take the money are also using the old "well, everyone else is doing it" line. Fine. Let them dig their own graves. Governor Palin does not have to answer for what California does with its stimulus money, she has to answer for what she does with Alaska's. She takes that charge seriously. She got the poison removed from the majority of the stimulus funds so that she could accept them and not hurt Alaska in the long term. The only money she was not able to do that with was a measly 28 million. She simply will not harm the state by taking that money. I don't think it's political, I don't think it's anything other than her doing what she believes is best for her state. Period. We're the ones who sit around and worry about the political implications, not her.

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