Learn From History, Not The Hard Way

by

Dave Harbour

An oil patch can become so proud of itself that it loses the competition, snatching defeat from the jaws of victory.

How does it do this?

A fossil fuel producing area becomes uncompetitive by jacking up taxes and royalties to the maximum.  Then it uses that largess taken from hapless investors to build great bureaucracies and entitlement systems.

Politicians, socialist and environmental activists use “community organizing techniques” to form movements against big bad (wealth producing) fossil industries.  This movement to mobilize hatred for the wealth producers by those dependent upon that wealth succeeds for a time until there comes a breaking point.

The economic breaking point, being a finite process, ends in economic doom but its end can be exacerbated by a sudden lowering of commodity prices, as now.  The entitlement, socialist, valueless culture has been trained to seek “more” and “more”, not to “do with less”.   So it takes more from the wealth producers to make up for lower prices, continues to demonize investors and block projects.  This perverted social structure grows until the economic death spiral finds the wealth producers gone.

Alaska and Alberta are now the poster places for this economic death spiral and the trend is currently looking very dangerous for both.  We would urge other states, provinces and  countries to learn by the sad examples provided by Alberta and Alaska — and, earlier, by Venezuela and Argentina — rather than learning the hard way themselves.

Do you hear us, North Dakota, Yukon Territory, Texas, Indonesia, Ohio, Mexico, Wyoming, Australia, et.al.?  Be lean.  Be moderate.  Be restrained.  Be competitive.  Be economically balanced for the sake of your next generation of citizens.

Big Oil’s Yuge Problem, Forbes, Liam Denning: Yesterday

Alaska Headlamp, This Morning, looks for good exploration news and higher production levels.  We join Ak-Headlamp in hoping for better news but the need for “right sizing” Alaska’s government is a continuing responsibility of elected leaders.  The most unappreciated responsibility of elected leaders is really to honestly focus on restraining general fund expense more than increasing general fund revenue; otherwise, economic crisis can return to the 49th state with a vengeance whenever prices drop, production ebbs, or a greedy majority seeks to extract still more from a defenseless minority.   -dh