Milton Freidman was a conservative who loved freedom. He was the greatest economist of his generation. He once explained capitalism does not establish freedom but “competitive capitalism” does. Nothing will change the problems Alaska has until we understand how to build Competitive Capitalism in Alaska.
That starts with money and its purpose. Most in Alaska understand we have many untouched natural resources. If we could only access them we could all prosper. But we also have another resource which we never touch, Money. The world is awash with our money called the dollar. China has trillions of them and has established a Bank called Asia infrastructure Investment Bank (AIIB).
They will use our dollars to help Asian nations build infrastructure.
Alaska has billions of dollars sitting in our Permanent Fund. We could use those dollars to start our own Alaska Infrastructure Investment Bank (also called public Bank of Alaska.) We would have an advantage over China using our dollars. Banks in the USA use cold hard cash to create credit expanding the money supply 10 times greater than the cash they have on hand. A public Bank of Alaska could do the same.
How it would work. Some Permanent Fund money would be placed into this public Bank of Alaska. I suggest 30 billion dollars. Like the Permanent Fund this money could never be touched because it would become part of the banks reserves (https://en.wikipedia.org/wiki/Bank_reserves ) on which new money (credit) would be created. I believe expanding credit 10 times more than the reserve amount is foolish. It is my understanding the only public bank in the nation, Bank of North Dakota, creates only an equal amount of credit based on their reserve of deposits. If our public Bank of Alaska did the same we would have $30,000,000,000 ready to expand infrastructure. Some of which we could start to build the needed gas-line. Others around the world would invest.
Private enterprise would be hired to build the gas-line. Once built we could expand competitive capitalism. Hire the best company who could do the best job for the money. We would establish rules of safety and production levels.
Today’s economic environment revolves around crony capitalism. Too big to fail corporations. That will always lead to monopolies that control jobs and resources. The big banks have plenty of credit to lend. But understand private banks have one fiduciary responsibility, make the most money for their shareholders. If you were a private bank who would you lend to, big oil, too big to fail or some small company who may fail as oil prices drop.
Self interest drives the credit market. Until Alaskans take control of our untouched resource called money we will always have crony capitalism. As a conservative, I believe as Milton Friedman did. With competitive capitalism freedom will abound.