New York Times
September 17, 2008
By Timothy Egan
People should stop picking on vice-presidential nominee Sarah Palin because she hired a high school classmate to oversee the state agriculture division, a woman who said she was qualified for the job because she liked cows when she was a kid. And they should lay off the governor for choosing another childhood friend to oversee a failing state-run dairy, allowing the Soviet-style business to ding taxpayers for $800,000 in additional losses.
What these critics don’t understand is that crony capitalism is how things are done in Alaska. They reward failure in the Last Frontier state. In that sense, it’s not unlike like Wall Street’s treatment of C.E.O.’s who run companies into the ground.
Look at Carly Fiorina, John McCain’s top economic surrogate — if you can find her this week, after the news and her narrative fused in a negative way. Dismissed as head of Hewlett-Packard after the company’s stock plunged and nearly 20,000 workers were let go, she was rewarded with $44 million in compensation. Sweet!
Thank God McCain wants to appoint a commission to study the practice that enriched his chief economic adviser. On the campaign trail this week, McCain and Palin pledged to “stop multimillion dollar payouts to C.E.O.’s” of failed companies. Good. Go talk to Fiorina at your next strategy session.
Palin’s Alaska is a cultural cousin to this kind of capitalism. The state may seem like a rugged arena for risky free-marketers. In truth, it’s a strange mix of socialized projects and who-you-know hiring practices.
Let’s start with those cows. A few years ago, I met Harvey Baskin, one of the last of Alaska’s taxpayer-subsidized dairy farmers, at his farm outside Anchorage. The state had spent more than $120 million to create farms where none existed before. The epic project was a miserable failure.
“You want to know how to lose money in a hurry?” Harvey told me, while kicking rock-hard clumps of frozen manure. “Become a farmer with the state of Alaska as your partner. This is what you call negative farming.”
That lesson was lost on Palin. As the Wall Street Journal reported this week, Governor Palin overturned a decision to shutter a money-losing, state-run creamery — Matanuska Maid — when her friends in Wasilla complained about losing their subsidies. She fired the board that recommended closure, and replaced it with one run by a childhood friend. After six months, and nearly $1 million in fresh losses, the board came to the same conclusion as the earlier one: Matanuska Maid could not operate without being a perpetual burden on the taxpayers.
This is Heckuva-Job-Brownie government, Far North version.
On a larger scale, consider the proposal to build a 1,715-mile natural gas pipeline, which Palin touts as one of her most significant achievements. Private companies complained they couldn’t build it without government help. That’s where Palin came to the rescue, ensuring that the state would back the project to the tune of $500 million.
And let’s not talk about voodoo infrastructure without one more mention of the bridge that Palin has yet to tell the truth about. The plan was to get American taxpayers to pay for a span that would be 80 feet higher than the Brooklyn Bridge, and about 20 feet short of the Golden Gate — all to serve a tiny airport with a half-dozen or so flights a day and a perfectly good five-minute ferry. Until it was laughed out of Congress, Palin backed it — big time, as the current vice president would say.
Why build it? Because it’s Alaska, where people are used to paying no state taxes and getting the rest of us to buck up for things they can’t afford. Alaska, where the first thing a visitor sees upon landing in Anchorage is the sign welcoming you to Ted Stevens International Airport. Stevens, of course, is the 84-year-old Republican senator indicted on multiple felony charges. He may still win re-election thanks to Palin’s popularity at the top of the ballot.
Alaskans will get $231 per person in federal earmarks — 10 times more than people in Barack Obama’s home state. That’s this year, with Palin as governor.
If Palin were a true reformer, she would tell Congress thanks, but no thanks to that other bridge to nowhere.
Yes, there is another one — a proposal to connect Anchorage to an empty peninsula, speeding the commute to Palin’s hometown by a few minutes. It could cost up to $2 billion. The official name is Don Young’s Way, after the congressman who got the federal bridge earmarks. Of late, he’s spent more $1 million in legal fees fending off corruption investigations. Oh, and Young’s son-in-law has a stake in the property at one end of the bridge.
Some of these projects might be fully explained should Palin ever open herself up to questions. This week she sat down for her second interview — with Sean Hannity of Fox, who has shown sufficient “deference” to Palin, as the campaign requested.
One question: When Palin says “government has got to get out of the way” of the private sector, as she proclaimed this week, does that apply to dairy farms, bridges and gas pipelines in her state? I didn’t think so.