Thursday, October 17, 2013

The parallels between the Administrations of Sean Parnell and George H.W. Bush

It’s been a hectic, but relaxing past few days.  As in most Octobers in recent years I have spent a few days on Cape Breton, an island at the eastern end of Nova Scotia, Canada, attending the annual Celtic Colours International Festival, a world-renowned music gathering.

I was not the only Alaskan doing so.  Monday afternoon I was sitting in a small community hall in the town of Christmas Island, Nova Scotia (described as having “a post office, a firehall and a very small population”), listening to songs largely being sung in Scottish Gaelic.  At a break the couple sitting in the next seats over and I struck up a conversation.  When I responded “Alaska” to their question of where I am from, they laughed and introduced me in turn to their friends, sitting on the other side of them, who live in Wasilla.  

Two years ago I came down to breakfast at the small bed and breakfast where I always stay and the owner, who over the years has become a very good friend, introduced me to Jack Goodsell and his wife, who of all the places to stay on the island had checked in to the room next to mine.  Jack, as some of you will recognize immediately but who I had never met before that morning, is the owner of the Turnagain Arm Pit BBQ, located near Indian on the road to Girdwood, and in the process of opening a new location in town across Old Seward from the Midtown New Sagaya.

I wasn’t far from home in other ways as well.  During my time there a friend here catching me up on the latest said that various, unnamed Alaska Republicans recently have taken to referring to me as political “gadfly” because of my pieces on state fiscal policy.  I suppose that is the latest in what appears to be an ongoing effort to use “names” – and other such tactics – to make me back down.  Good luck with that.

During the discussion we talked about others that had been called the same at various times, and in the course of that, started talking about Ross Perot.  Perot, as some may remember, was the Texas businessman who, in 1992, launched an unorthodox (to say the least) campaign for President as an Independent, focusing almost exclusively on fiscal and budget policy issues.  As a refresher, the other candidates in the race were George H.W. Bush, the Republican incumbent, and Bill Clinton. 

I remember that campaign well.  What Bush never understood – but Clinton did – was that Perot’s campaign wasn’t about himself; it was about the issues he advocated.  He wasn’t a politician who went searching for issues on which to run.  Instead he came at it in the reverse.  He was a private citizen who was seriously concerned about the country’s then-current economic path and when the existing candidates didn’t take them seriously, he ran to force the debate.

While Bush attempted to dismiss Perot as a gadfly and, at times, attacked him personally, Clinton largely did not.  Instead, in various ways, Clinton incorporated Perot’s issues into his own campaign.

The result.  While Perot did not win, his issue did by shining intense light on the economic future being created by the massive budget deficits being run up in the first Bush Administration.  Bush never was able to come up with a good response to those economic issues -- and lost the election.  Clinton did, and won.

As I thought about it, various other parallels between the Parnell and first Bush Administration also have occurred to me. 

Parnell is setting much the same stage for himself as Bush did during his single, elected term as President.   Compared with sustainable budget levels, the Parnell Administration currently is running up massive budget deficits.  According to an analysis done earlier this year by the University of Alaska-Anchorage’s highly respected Institute of Social and Economic Research (ISER), Alaska currently can afford state spending levels in the range of $5.5 billion.  Against that, the Parnell Administration spent roughly $7.8 billion (or $2.4 billion over sustainable levels) in the recently completed FY 2013, and proposes to spend another $7.1 billion (or $1.6 billion over sustainable levels) in FY 2014.

More disturbingly, in April Parnell said he intends to continue spending at the same levels for the next five years.  If given the opportunity to carry through, that means by the time he ultimately leaves office at the end of 2018 he cumulatively will have overspent sustainable spending levels by more than $10 billion.  Or to put it another way, by the end of his term Parnell will have spent away, rather than saved as a sustainable budget requires, the equivalent of roughly 25% of the current value of the Alaska Permanent Fund.

And there is another parallel.  Many will recall that while accepting the party’s Presidential nomination during the 1988 Republican National Convention, George Bush famously said, “Read my lips, no new taxes.”  Repeatedly referring to himself as a “fiscal conservative,” Sean Parnell effectively has said the same thing.
 
George Bush later had to eat those words.  At current spending levels, Parnell is on track to do the same thing, although the burden of the tax increases he is creating will fall conveniently (for him) mostly on future Alaskans, after he leaves the Governor’s office (as current rumor has it, to “primary” Senator Murkowski). 

The ISER report makes clear where the state is headed on its current track:
“Reasonable assumptions about potential new revenue sources suggest we do not have enough cash in reserves to avoid a severe fiscal crunch soon after 2023, and with that fiscal crisis will come an economic crash.”
And two separate reports written in 2009 and 2011 make clear what options that will leave the state:
“… projection of future state population and public sector demands compared to revenues suggests that a number of adjustments to the state’s fiscal structure will be necessary … to maintain adequate public services.  Two options available to the state, in addition to reducing expenditures, are institution of a broad-based tax, and use of a portion of the earnings of the Permanent Fund. … It is anticipated that both options will be required ….”
Rather than focus on changing policy directions while they still had the chance in the runup to the 1992 election, Republicans instead spent their time and effort thinking up different ways to call Ross Perot a “gadfly.”  The result:  George Bush lost.

Maybe the parallels between the first Bush and Parnell Administrations will end before it reaches that point … or maybe not.