Northern populist

Juan Cristobal says: – A scenery-chewing political reformer. A bible-thumping banner of books. A pitbull with lipstick. The political heiress to Ronald Reagan and Margaret Thatcher. A hack.

Sarah Palin has been called a lot of things in the past two weeks, but of all the names, one characterization has stuck with me: right-wing populist.

Webster’s defines populism as “antiestablishment or anti-intellectual political movements or philosophies that offer unorthodox solutions or policies and appeal to the common person rather than according with traditional party or partisan ideologies.” It goes on to say that populism is a “representation or extolling of the common person, the working class, the underdog…”

Palin fits this definition like few Republicans do. Her folksy demeanor and her Marge Gunderson-accent are an integral part of her charm and appeal as a politician. She routinely touts her small-town, hockey-mom credentials as a way of telling the voters “I’m one of you… only I hunt bears.”

But her populist strain is more than superficial. It resides in a deeper place, one rooted in the energy agenda she has carved in Alaska. Looked at more closely, Palin’s relationship with Big Oil and the Alaska politicians they were used to commanding is actually kind of interesting.

It wouldn’t be a stretch to say it is eerily reminiscent of Hugo Chávez’s banana-republic populism, albeit with some stark differences.

Before going into the details, it is worth noting that Alaska is like a sophisticated, moose-populated version of a petro-state. A portion of oil revenues are distributed to the population according to the rules of the Alaska Permanent Fund, much like it is done in places such as Norway. And while, unlike Venezuela, Iran and the like, the state is not a basket case, the vices of the petro-state pop up from time to time.

Palin’s first foray into statewide politics began in 2002, when she was appointed to chair the Alaska Oil and Gas Conservation Commission. This body is in charge of coordinating, along with oil companies, the rational exploitation of the state’s oil and natural gas reserves.

Palin resigned from that job raising all sorts of hell. She claimed fellow Republican members had conflicts of interest and were in bed with the oil companies they were supposed to regulate. Her grandstanding won her wide notoriety, and resulted in the resignation of her fellow members, one of whom was subsequently fined.

Like Palin, Hugo Chávez was elected on an anti-corruption platform. Anti-corruption is a typical populist stance, although it usually helps if you follow tough stances with actions, something Chávez has so far failed to do. In fact, the last few days have provided us with engrossing details of just how corrupt the chavista regime is.

Partly thanks to her tough stance on this issue, Palin was elected Governor of Alaska in 2006. One of her first measures was to slap oil companies with a huge , quasi-confiscatory tax hike. In fact, Palin increased the oil tax from a 10 percent gross revenue tax to a 25 percent profits tax, with the tax rate rising 0.2% for each dollar the price of oil exceeds $52 per barrel.

The result was a massive influx of cash to state coffers, and Palin gleefully distributed part of it among Alaska’s residents. In typical populist fashion, Palin coined her plan “Alaska’s Clear and Equitable Share.”

The oil companies were being milked, and they were not happy. According to the New Republic, BP, for example, saw its state taxes increase by 480 percent. The company announced the move would “weaken investment” and that they would be “reviewing planned activities.” Royal Dutch Shell also fretted, although most were keen to continue participating in Alaska’s oil biz.

Hugo Chávez also has a record of raising taxes and royalties on oil companies. However, Chávez’s heavy-handed approach has gone further than Palin’s. While BP and Shell remain in Alaska in spite of the tax increase, these and other multinationals have diminished their Venezuelan exposure or left the country altogether for friendlier territory. Venezuela relies more and more on state oil companies from friendly countries that have not been expropriated… yet.

Another difference is that part of Palin’s tax increase went directly into the pockets of the citizens of Alaska. Chávez’s tax increase has gone to lots of places. Some of it has made its way to Venezuelans’ income (some more than others), but a lot of it has fled the country in the form of imports, subsidies to political allies and even suitcases.

Like Chávez, Palin came into office with grand infrastructure visions. Alaskans had long wanted to build a natural gas pipeline so that its vast reserves could feed into the existing North American pipeline infrastructure. The problem was that oil companies had a differing set of incentives.

The state’s long-standing approach had been to encourage oil companies to build the pipeline by offering incentives. But the companies did not want to build a pipeline that was too large, because that would diminish their power to negotiate vis-a-vis the state and their competitors. The prospect of a BP- or Exxon-owned pipeline discouraged gas exploration because smaller companies did not want to have to ship their product through their competitor’s pipeline.

Instead, Alaskans decided a series of “must-haves” for the pipeline, one that specified low tariffs and large volume capacity. In the end, Trans-Canada won the right to build the pipeline, in what is being touted as the largest private infrastructure project in North America.

Like Palin, Chávez dreams of pipelines spanning the continent. Yet again, the similarities with Chávez stop soon. Chávez’s pipe dreams make little economic sense and, by excluding the private sector, are incredibly costly to the taxpayer. It’s no wonder that most of his proposals end up being shelved.

The comparison between Chávez’s and Palin’s energy agendas yields remarkable similarities, but also stark differences. While both are guided by populist, anti-big business instincts, Palin’s populism remains rooted in the rule of law and in economic rationale.

During my stay in the U.S. in the past few weeks, she was all people were talking about. Experts began laughing at the choice, circling the McCain candidacy like coroners with their pens on their toe-tags, only to see the press begin talking about the “Palin surge.” Scorn turned quickly into worry. In a surprising turn of events, feminists began wondering if she was fit to be both a mother and a Vice-president, while Obama began playing the experience card Hillary Clinton unsuccesfully used on him in the primary. To top it all off, Republicans find themselves enthralled by a neo-populist with an anti-big-business agenda.

Whatever you think about Palin, you have to hand it to McCain. That crazy old fart has made an already entertaining election 10 times more entertaining.

One final thing that surprised me was how polarized the US has become in recent months. It is extremely difficult to have an impartial conversation about the election with anyone. Both sides play games with the truth and the important issues are left by the wayside. Palin’s selection only heightened the volume of the debate.

Just like in Venezuela… Palin los tiene locos.