Steven Pearlstein's column in the Nov. 23 Business section incorrectly described one of two proposed bridges in Alaska, originally funded by Congress as part of the transportation bill, that have been derided as "bridges to nowhere." Only one bridge would connect to an island; the other would connect Anchorage to a nearly deserted port across an inlet.
Alaska Would Be More at Home in Russia
With General Motors in the midst of a painful downsizing and Ford scheduled to announce its plan next year, it struck me that it's time for the U.S. government to get serious about restructuring.
So, after crunching the numbers and tossing around ideas with world-renowned strategy consultants, I've come up with a dynamite plan -- one that would cut the federal deficit and the debt, heal a major rift within the body politic, and restore some sanity to the annual appropriations process:
Sell Alaska back to the Russians.
The timing couldn't be better. The market value of Alaska's 4.5 billion barrels of proven oil reserves, plus the gas, timber and copper, are at or near all-time highs, while Russia is flush with $50 billion in petrodollars it doesn't know how to invest. And with the Kremlin still smarting about losing all those unpronounceable republics, Alaska would be just the sort of strategic acquisition to appeal to President Putin's imperial instincts.
The deal could be structured as a leveraged buyout with some seller mezzanine financing, to give us some upside if commodity prices continue to climb. And if you figure a price of $1 trillion, the investment banking fees alone should be enough to add several points to U.S. gross domestic product. And the profit we make off Seward's original $7.2 million investment would put even the Carlyle Group to shame.
With Alaska free from the political grip of environmentalists in Washington and Marin County, Alaskans would be able to drill and fish and clear-cut to their heart's content, unlocking value that could never be realized as long as they are in the United States. And politics here will finally be free of the endless fights over Tongass and ANWR, sea lions and caribou.
In terms of cash flow, there's no question that the deal would, to use Wall Street-speak, be immediately accretive. The Tax Foundation calculates that in 2003, Alaska got $1.89 back in federal contracts, subsidies and income support for every dollar its residents and companies pay to the U.S. Treasury. That's the second-best deal in the union, after New Mexico's $1.99.
That federal largess is testimony to the hard work of a congressional delegation determined to lard any piece of legislation going by with special goodies for Alaska.
You already know about the $435 million for two bridges to two isolated Alaskan islands -- the so-called bridges to nowhere. But what's remarkable about these fiscal abominations is how unremarkable they were to Alaskans, for whom each new increment of federal money is merely the predicate for justifying yet another.
Subsidized highways that require subsidized bridges to bring people and cargo to subsidized airports serving subsidized flights.
Subsidized design studies for the subsidized construction of ferry boats that will offer subsidized service to isolated communities in which housing, education, health care and economic development are all heavily subsidized.
Subsidized marketing campaigns for salmon-fortified baby food made from fish caught by subsidized fleets. (I'm not making this up.)