L. Neil Smith's
THE LIBERTARIAN ENTERPRISE
Number 126, June 18, 2001
Cancel Dad's NRA Membership!
The Saga of the Moose's Tooth
by Vin Suprynowicz
Special to TLE
Eight Western states (but not California) outperformed the rest of the country in economic growth during much of the 1990s -- while Hawaii and Alaska suffered the most pathetic growth rates, according to a Commerce Department report released June 4 in Washington.
The report's authors blamed California's sub-par economic performance on slowdowns among defense contractors. In attempting to explain Hawaii's worst-in-the-nation economic performance during the period (the Aloha state's economy actually shrank by 0.3 percent), "Government analysts said that the state ... was hard hit by the 1997-98 Asian currency crisis, which cut into the state's tourism business," reports AP economics writer Martin Crutsinger.
What "government analysts" apparently failed to note or mention is that, among the 50 American commonwealths, Hawaii is the most nearly perfect model of a high-tax, single-party welfare state, where Democratic Party pork and make-work public sector jobs proliferate unchecked by any substantial conservative or libertarian opposition, and where the now-standard run of "environmental" restrictions on business activity not only proliferate like Kudzu (you can't even put up a billboard anywhere in Hawaii), but are then geometrically multiplied by restrictions on virtually any productive land use which might somehow offend aboriginal sensibilities.
That traditionally low-tax, less-government havens like Idaho, New Mexico, Utah, and New Hampshire (the last proving the trend is not merely regional) would also lead the nation in job and profit growth is no surprise. At first glance, however, this would appear to leave Alaska as the largest remaining mystery in this week's report.
Why would the once laissez-faire northern empire place next-to-last in growth with an average increase of just 0.5 percent during the eight-year period, faring even worse than Sen. Byrd's barefoot pork palace of West Virginia, which weighed in at a predictably anemic 2.4 percent?
The answer, of course, is that things have changed in Alaska. Matt Jones of the Bear Tooth Theater Pub explains there was no cap on microbrewery production or the number of locations he and partner Rod Hancock could open when they launched their popular, upscale Anchorage venture in 1996.
But then their competitors at Alaska's Cabaret, Hotel, and Restaurant Retailers Association got busy, dispatching highly-paid lobbyists to the state Legislature to warn that "If we don't watch out, Alaska will have a brew pub on every corner, like they do down in Seattle!"
Oh, the humanity.
"We were never contacted or asked about it," the microbrewer told me over lunch at his spiffy new joint last month. "Then suddenly we got this letter saying we were grandfathered in, but we can never open another restaurant, when it was written right there in our business plan that we'd always figured on expanding and opening subsequent locations."
In 1999, Jones and Hancock and the owners of Anchorage's competing Glacier Brew House were "allowed" to open second locations (Jones and Hancock started down the street at The Moose's Tooth Saloon), but only in exchange for agreeing to purchase otherwise unnecessary $150,000 full-liquor licenses for each location, and accepting production caps on their microbreweries of 4,800 kegs per year.
What does this mean to Jones and Hancock's fast-growing business, which has already created 200 new Alaska jobs?
"Due to the level playing field there, Oregon is now known as the mecca of handbrewed beer, because people can live and die by their wits," Jones explains. "If you're a beer connoisseur you visit Portland. But now no will will ever come to Anchorage for that. The state is shooting itself in the foot. We just had a meeting, and it looks like we're going to have to farm out the brewing of our extra production" (to meet current-year customer demand) "to Oregon. So those jobs and that tax revenue will all go to Oregon. What we'll have to do is pace our production here so as not to reach 75,000 gallons till December so our five brewery workers don't have to get laid off in October.
"We put together a great team of brewers, and they were real excited about the chance to grow, here. But now they're on pins and needles, wondering if they're even going to have their jobs."
Oregon's ranking in this week's Commerce Department survey of economic growth? Third best in the nation, at 6.8 percent, interestingly enough.
The real correlation with economic growth or slowdown would appear to have far less to do with defense contracts -- or any Asian currency crisis -- than it does with whether a state's lawmakers strive to keep taxes low and stay the employment-strangling hand of the "regulatory" racketeers. Once a laissez-faire paradise for the self-sufficient, Alaska now seems to have instead fallen into the hands of the protection rackets and their professional legislative wheel-greasers.
Too bad. Pretty country up there ... if only they'd let a guy make a living.