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Friday, September 05, 2008

The Emir of Alaska?

My colleague, Clay Gillette, refers to Governor Sarah Palin as "the Emir of Alaska," a sobriquet that is less a criticism of the governor and more a recognition of the corrupting effect of oil on democracy. As Governor Palin is the first to admit, Alaska's politics have been steeped in corruption. Well-connected businessmen use bribes to lubricate their relations with dynastic politicians while voters are curiously indifferent to the conflicts of interest. (Ted Stevens apparently remains popular despite his indictment). Clay observes that one sees similar patterns of government in Louisiana, Venezuela, Saudi Arabia, Russia, and other jurisdictions cursed with oil. The reason is, in part, that voters do not monitor or punish politicians (or emirs or dictators) for wasting other people's money. If the government had to finance itself with taxes, then politicians could pad their pockets only by raising taxes or deficits -- actions likely to inspire voter backlash. By side-stepping the taxation process, oil-based political systems also side-step the major process by which government builds legitimacy with constituents.

Should these observations lead one to disfavor the Emir of Alaska in November? Not necessarily: Palin could be a reforming Emir. But Clay is correct to observe that Palin's executive experience with a regime floating on petrodollars is unusual in the United States and might not equip her for the rigors of tax-based democracies. Whoever wins in November will be stuck with fixing a broken fiscal system -- a fix that manifestly cannot be accomplished by eliminating the chump change spent on earmarked budget items.

Nothing in Palin's convention speech indicates that she will rise to the occasion: she included the usual anti-tax rhetoric while ignoring the budget debacle looming over the nation. As the crowd roared at her laugh lines, I muttered "spoken like a true emir." But there are precedents for anti-tax Republicans' seeing the light. Bush Senior showed extraordinary courage in 1990, when he abandoned his convention slogans of '88 to endorse the Omnibus Budget Reconciliation Act, which included a 10% surtax on the top income tax bracket. That tax increase and the "pay-as-you-go" financing of the Budget Enforcement Act of 1990 may have cost Bush I the election -- but they laid the foundation for a decade of fiscal sanity.

If Palin can enlist her formidable speaking talents to wean the Republicans from their anti-tax obsessions, then she may become a great executive leader. But her experience as the Emir of Alaska will not steel her courage for this unpalatable task.

Posted by Rick Hills on September 5, 2008 at 11:14 AM in Current Affairs | Permalink


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