The story of petrocrats like Hugo Chavez and Mahmoud Ahmadinejad always follows the same arc. They come into power during a time of national turmoil, the oil cycle turns upward, their popularity soars to new highs, the price of oil tanks, and their grip on power slips. Will GOP veep candidate and possible 2012 flagbearer Sarah Palin suffer the same fate in her own socialist petrostate Alaska? When oil was at $120 she could afford to balance the budget, keep taxes low and even cut everyone in the state a sizable check each year, merely for being citizens. It was always funny that she howled so much about “spreading the wealth”, since that was exactly what she did in Alaska, but that’s politics. Anyway, with oil much lower, it seems the Sarahcudda isn’t finding life quite so easy:
Palin bills herself as a fiscal conservative, and has called for reducing state spending by $268 million in this budget year, but lawmakers and others say these aren’t reductions at all and do nothing to curtail spending. For example, the bulk of that sum _ $200 million _ is unspent tax credits for companies investing in oil and gas development that are being returned to the treasury.
Palin also is seeking approval from lawmakers to tap budget reserves to fill the deficit. She also has implemented a state hiring freeze that exempts public safety employees, but other departments are lining up to ask for waivers.
So far, petro-state dictators are holding on Ahmadinejad is still in power, and Hugo Chavez just won the right to run for yet another term. Sarah Palin, presumably, doesn’t have to worry about a violent overthrow, but if she wants to run for Prez in 2012, a nice life in prices would certainly help.
NOW WATCH: Money & Markets videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.