The June issue of The Atlantic is out today (please subscribe!) and includes a long piece I wrote -- "The Tragedy of Sarah Palin" -- that considers the effect Palin has had on Alaska and on American politics broadly. If you believe that Palin no longer represents a serious force in our politics, that she's "over," as one writer recently put it, then think of my piece as a retrospective that explores why that is so and considers what she might have been. If, on the other hand, you think Palin is just biding her time, that her greatest days still lie ahead of her -- and a number of people do think this -- then my piece can be read as an exegesis of her record, particularly her record in Alaska, which is much stronger than most people realize and could be drawn upon to revitalize her political career.
As I write in the piece, her critics dismiss her out of hand for a number of obvious reasons, especially for her abrupt decision two years ago to quit her governorship. But in her brief tenure as governor, Palin was strikingly effective on the issue that matters most in Alaska, its oil and gas politics. Through sheer force of will (and a willingness to cooperate with Democrats), she managed to solve, at least for a time, the problem that lay at the heart of Alaska's politics for a generation: how to break the oil companies' grip on the state and capture a fair share of their profits for Alaskans. Palin's major achievement was winning an oil tax that did just that and was called Alaska's Clear and Equitable Share (ACES). While reporting the piece, I came to think of it as her "secret" success because, while there is nothing hidden about it, no one, including Palin herself that I can see, pays it any mind -- even though it has helped bring Alaska a $12 billion budget surplus, an achievement most presidential hopefuls would brag about incessantly (and justifiably). From the piece:
What [Palin] signed into law went well beyond her original proposal: ACES imposes a higher base tax rate than its predecessor on oil profits. But the really significant part has been that the tax rate rises much sooner and more steeply as oil prices climb--the part Democrats pushed for. The tax is assessed monthly, rather than annually, to better capture price spikes, of which there have been many. ACES also makes it harder for companies to claim tax credits for cleaning up spills caused by their own negligence, as some had done under the old regime.
Four years later, Palin's gas line hasn't gotten going, but it's not really her fault. Plunging natural-gas prices have made the project uneconomical. Her oil tax is a different story: though designed to capture more revenue under most scenarios, ACES has raised a lot more money than almost anyone imagined. That's largely because of high oil prices. But it also shows that the law is working. ConocoPhillips, BP, and ExxonMobil have reported record profits--so it's fitting that, in a sense, Alaska has, too. It's no exaggeration to say that ACES has made the state one of the fiscally strongest in the union. Flush with cash, Alaska produced large capital budgets that blunted the effects of the recession. Moody's just upped the state's bond rating to AAA for the first time. While other states reel under staggering deficits, budget cuts, and protests, Alaska has built up a $12 billion surplus, most of it attributable to Palin's tax. Galvin estimates that it has raised $8 billion more than Murkowski's tax would have. But given the corruption that plagued the PPT, a better benchmark might be the tax it supplanted--the one put on the books after the Exxon Valdez spill. By that measure, Palin's major achievement has probably meant the difference between a $12 billion surplus and a deficit.