June 4, 2025 • 52 mins
Welcome to The Weekly Top 3 — our look at the top 3 things on our mind here at Alaskans for Sustainable Budgets — for the week of June 2, 2025.
This week, our top 3 issues are these: 1) we explain why the Permanent Fund Corporation’s April results demonstrate our point about its deficient returns (2:03); 2) in the wake of the visit from three of its cabinet officials, we examine the potential impact of the Trump Admin’s focus on Alaska (18:58); and 3) putting all the pieces together, we discuss which “working people” exactly Angela Rodell really seems concerned about (34:02).
The Weekly Top 3 is a regular weekly segment on The Michael Dukes Show. The Show broadcasts on Facebook and YouTubeLive as well as via streaming audio from the Show’s website weekdays from 6–8am. We join Michael weekly in the first hour of Tuesday’s show, from 6:25–7am, for a discussion between the two of us about our three issues.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:10):
Hi, this is Brad Kiefle, managing Director of
Alaskans for Sustainable Budgets.
Welcome to the weekly top three, the top three things on our
mind here at Alaskans forSustainable Budgets for the week
of June 2nd 2025.
The weekly top three is aregular segment on the Michael
Duke Show.
The show broadcasts on bothFacebook Live and YouTube Live
(00:32):
as well as via streaming audiofrom the show's website.
Weekdays from 6 to 8 am.
I join Michael weekly in thefirst hour of Tuesday's show
from 6.10 to 7 am for adiscussion between the two of us
about our three issues.
We post the podcast of ourdiscussion following the show on
the Alaskans for SustainableBudgets Facebook, youtube,
(00:54):
soundcloud, spotify and Substackpages.
Also on the Alaskans forSustainable Budgets website, as
well as the projects page onnational blog site mediumcom.
You can find past episodes ofthe weekly top three also at the
same locations.
Keep in mind that, in additionto these podcasts during the
(01:15):
week, you can also follow andparticipate in the discussion
with us of these and otherissues affecting Alaska's fiscal
and economic condition byfollowing us on the Alaskans for
Sustainable Budgets Facebookpage and through our posts on
Twitter.
This week, our top three issuesare these First, we explain why
(01:36):
the Permanent FundCorporation's April results
demonstrate our point.
Second, we examine thepotential impact of the Trump
administration's focus on Alaska.
And third, putting all thepieces together, we discuss
which working people exactlyAngela Rodale really seems
(01:58):
concerned about.
And now let's join Michael.
Speaker 2 (02:03):
Well, Brad, let's get started, for today We've got a
lot of stuff to cover and someinteresting things.
It wasn't too long ago what wasthat?
Just last week.
Maybe Do you remember thePermanent Fund Corporation's
recent brag session about howwell they were doing.
What's the update on that, Brad?
Speaker 1 (02:26):
Well last week or a couple of weeks ago, but in any
event, one of our segments wason the Permanent Fund
Corporation's press release thatgot picked up by Must Read
Alaska on how well they weredoing through March.
It was odd because it was like20 days after the end of
(02:48):
publishing March results, butnonetheless they had a press
release and they said how wellthey were doing on the fiscal
year basis and how well theywere doing on a longer term
basis.
Since that time they'vepublished April and this is a
lesson.
This always should be a lessonNever publish something on a
(03:10):
monthly basis when you know thenext month could undermine what
you were claiming on in theprevious month.
So let's take a look at whatthe April results are for the
Permanent Fund Corporation andmonthly after the Permanent Fund
Corporation publishes theseresults, we do a post, we do a
(03:30):
table of what the Permanent Fundresults are, permanent Fund
Corporation results are, andpublish it as part of our
monthly chart series.
So this is April's chart and ifyou've got it we can pull it up
.
This chart shows it's a runningtab since FY12 on an annual
(03:55):
basis and then on a fiscal yearto date basis and then on a
five-year average, three-yearaverage, rolling one year
12-month average basis.
It looks at what the permanentfund results have been in the
left-year average rollingone-year 12-month average basis.
It looks at what the permanentfund results have been in the
left-hand column, what theVanguard S&P 500 results have
been their ETF have been, whatthe total fund return objective,
(04:20):
which is the CPI 5% plusinflation, what that standard
has been.
That, to me, is the mostimportant standard to use as a
comparison because that's thebasis on which the POMV draw is
based.
It's based on a 5% taking, 5%real return off the permanent
(04:43):
fund.
So that standard sort of tellsyou how we're doing, how the
permanent fund's doing againstthe POMV draw, whether it's
keeping up with the POMV draw,running ahead or lagging behind.
And then off to the right wehave all of the various
benchmarks self-createdbenchmarks that the permanent
fund has used over time to judgeits own performance.
(05:05):
It's sort of like, hey, let meset a standard that I can judge
myself against, that thepermanent fund has used over
time to judge its ownperformance.
It's sort of like, hey, let meset a standard that I can judge
myself against.
And that's what all of the onesover to the right are the
year-to-date results are belowthe line, below the yellow line.
The yellow line is an averageof FY12 through FY24.
The line below that is thefiscal year to date average.
(05:29):
This is part of what thePermanent Fund Corporation was
bragging on for April.
It shows that the permanentfunds return year to date.
Fiscal year 25 to date, throughApril, is 4.7%, which is
actually a little bit higherthan what they were saying in
March.
But here's the rest of thenumbers.
The S&P number's down.
The S&P number is 2.92, but Ichecked this morning and, taking
(05:54):
into account the futures marketthrough the end of June, the
S&P has bounced back up.
This was its low point, hasbounced back up and it's now
showing an 8 plus percent returnon the year by the time we get
to the end of the fiscal year.
The total fund return objective, cpi plus five and again this
is the important standardbecause it's the one that is
(06:16):
used for the POMV draw sort ofreflects the POMV draw.
That's 6.24.
Now in the March release thepermanent fund was
congratulating itself for beingrelatively near the total fund
return objective.
But now the total fund, whenyou roll a month forward, the
total fund return objective isnow 6.24%, 1.5% ahead of where
(06:38):
the permanent fund is.
Permanent fund is again.
These are the permanent fund'sown benchmarks that they create
for themselves.
So permanent fund is exceedingslightly its performance.
Its own performance benchmark4.63%.
The permanent fund's got a 4.7.
But look at the passive indexbenchmark.
This is the benchmark createdby the permanent fund to say,
(07:01):
look, if we didn't activelymanage this fund, we sort of put
it on autopilot.
It's another way of putting iton autopilot.
If we put it on autopilot, thisis what would be the returns
that we'd be generating.
And the passive index benchmarkis 5.81, a point and a half a
point, 1.1, ahead of wheretheermanent Fund Corporation's
(07:25):
return is.
So last month they wereextolling how good a job they
were doing for their activemanagement of the Permanent Fund
.
This month's results areshowing no, they're lagging.
Their active management isactually costing Alaskans.
In terms of returns.
Relative to the Perman's ownpermanent fund corporation's own
(07:45):
passive index benchmark, theaverages below the five-year
average.
The permanent fund is producing,on a five-year rolling average
basis, returns that look prettygood compared to the other
benchmarks.
Well, except for the S&P.
(08:05):
The S&P is at 15.5, six pointsahead of where the permanent
fund is.
But the total fund returnobjective.
The CPI plus five is at 9.59.
They're about in the ballpark.
And then on the five-yearaverage, the permanent fund is a
little bit ahead of that.
But when you look below that,when you sort of take the cover
off or take the hood up, liftthe hood up and look what's
(08:27):
going on underneath that, thethree-year average, which will
become the five-year average atsome point, is rolling into the
five-year average and a muchbetter review of how the
permanent fund's done recentlycompared to a few years back.
That may be distorting theresults.
When you look at the three-yearaverage, the permanent fund is
(08:48):
doing 4.9% on a three-yearaverage, compared to the S&P at
12.09, fully seven points aheadof where the permanent fund is
Total fund return objective.
The CPI plus five is 8.53, wellahead of where the permanent
fund is.
The performance benchmark, thepermanent fund's own performance
(09:10):
benchmark.
They're lagging it 4.9 to 5.2.
And they're lagging the passiveindex benchmark again, the
autopilot benchmark.
The three year average is 4.9compared to 6%.
So I think what these numbersare telling us and you can see
(09:32):
in the year-by-year results thatthere is one year FY21, the
bounce back year from COVID thatthe permanent fund did
exceptionally well.
They did a 29.73, not as goodas the S&P would have done.
The S&P had a 41.1, 41.0%return in that year.
But the permanent fund did wellin that year.
(09:54):
And what's really going on whenyou sort through these numbers
is that year FY21 is driving thefive-year results.
When you sort of exclude it andsay, okay, well, what have you
done for me recently?
And look at the three-yearresults, you see that the
Permanent Fund Corporation islagging significantly, not only
the S&P, not only the S&P, butalso the CPI plus five objective
(10:18):
and even its own passive indexbenchmark.
So I don't think we're going tohave another press release at
the end of this month.
I think they cherry-picked themonth they wanted to stand on
and then, well, just don't payattention to that guy, don't pay
attention to those numbersbehind the curtain Right.
Speaker 2 (10:38):
Well, what this tells us, even if you just look at
the bottom three rows there,which is the five-year, the
three-year and the one-yearaverage, the story is told the
permanent fund is not earningenough money, with the CPI plus
five, to be able to make thedraw, especially compared to the
S&P or the Vanguard fund.
(10:59):
The S&P 500 Vanguard fund whichis, you know, I mean it's twice
, almost three times, what thepermanent fund is earning on a
passive basis.
I mean you know that shouldtell the whole story right there
.
I don't care if you've got oneor two good months, what's the
five, three and one-year averagelook like?
And the bottom line is that wehaven't made enough money to pay
(11:22):
for everything and to keep thefund up to the proper amount and
we've lost out on well asignificant amount of money,
almost three times the amount ofearnings we could have got if
they had just sat there with theVanguard 500.
Speaker 1 (11:38):
Yeah, and this rolls in, Michael, and explains why
the press for merging the twoaccounts is so important to some
people.
Because you look at thepermanent fund returns, the
earnings the permanent fund isachieving compared to the CPI
plus five, which is what thePOMV draws based on, and you can
(12:00):
see that the permanent fund isconsistently running below what
they would need to be earning tokeep up with the CPI plus five.
So one answer to that would behey, maybe we ought to change
our investment strategy.
Maybe we ought to go onautopilot, because autopilot
would do better than we're doing.
Or maybe we ought to look atthe S&P strategy, because that
(12:22):
would do a heck of a lot betterthan what we're doing.
But instead of that, instead ofhey, maybe we ought to be
reevaluating our investmentstrategy.
What they're doing is they'retalking about merging the
permanent fund earnings and thepermanent fund corpus together
in a way that, as we've talkedabout on the show before, opens
(12:42):
the back door into the permanentfund corpus, so that when you
have as they are doing, when youhave this string of
performances that are lower thanthe CPI plus five and you're
not earning enough to cover thePOMV, draw what merging those
two accounts are going to do isallow them to come into the
corpus and start draining thecorpus to keep the money rolling
(13:05):
, even though they aren'tearning enough to cover the draw
.
Speaker 2 (13:10):
That's not to mention the fact that if they did go on
the set it and forget it schemeof the Vanguard 500, they'd
save themselves nearly a billiondollars in management fee.
A billion one like $890 millionin management fees per year per
year, yeah, exactly per year,uh, which is a lot.
When you're talking about an 80billion dollar funding, you
(13:32):
start chipping away at it onepercent at a time.
That's not a, that's not asmall amount, uh, by any strange
stretch of the imagination.
Um, I mean, this is just someastonishing stuff, and I am
surprised that more people, morenews outlets, more folks
they're just not, they're notpicking up on it.
Well, I mean, what, what?
What are we missing herequickly?
Speaker 1 (13:53):
Well, legislators aren't talking about it.
If you look at the news media,they follow what legislators say
and legislators aren't talkingabout this.
They're talking, instead, aboutmerging the two accounts.
They see these numbers,legislators see these numbers,
but they're talking aboutmerging the two accounts
together to allow the backdoorinto the corpus, and that's what
(14:15):
the media is following.
They're following thelegislators about that.
If we had legislators that weretalking about this instead, I
think the media would startpicking up on it.
Speaker 2 (14:25):
Brad, here's what I don't understand.
I'm just looking at thesenumbers 15 plus 12 plus 11, I
mean it's 22.
We're looking at, I mean thisis almost a 30%, that was 30,
almost a 40, almost a 42%increase over the 5, 3, and
1-year average, versus barely a20% increase over the five,
three and one year average,versus a barely a 20% increase.
(14:48):
You know, and if these guyswere really about making as much
money for the government asthey could, you'd think they'd
be clamoring to get to the S&P500 model instead of the current
managed model that thepermanent fund has.
What's the?
You know why?
What's going?
Speaker 1 (15:07):
on.
Well, a couple of things,michael.
One is the current approachemploys a lot of people down in
Juneau.
They've got a lot of analysts,they've got a lot of investment
advisors, they've got a lot ofpeople on contract that are
friends and friends on contract,friends and advisors on
contract, friends and advisorson contract, and so it's like
(15:29):
undoing any bureaucracy.
We don't want to do thatbecause, oh my gosh, how many
people would we have on thestreet in Juneau suddenly?
The second is this is sort of aclassic case of safety first
right.
A classic case of safety firstright.
If I rely on a bunch of advisors, if I do a bunch of you know
(15:49):
risk management and spend a lotof time on risk management, then
I'm not subject to being I'mlikely not going to be
criticized because I can alwayssay, hey, I just relied on these
guys, I relied on Wall Street,or I relied on these advisors,
or I put my money with theseguys.
You know, don't blame me, I'mthe one you know I relied on all
these, or I put my money withthese guys.
You know, don't blame me, I'mthe one.
You know, I relied on all theseother people and we had all
these risk management tools thatwe were using.
(16:12):
So it's aversion, risk aversionin a big way, you know.
And when they're asking aboutthe S&P, they say, oh well,
that's volatile, it goes up anddown, it goes up and down, it
goes up and down, it goes up anddown, and it does.
I mean, the S&P is morevolatile than the boring thing
(16:32):
that they've put together.
But the thing about the S&P, ifyou look at it over time, it
goes up and down, but it's goingsteadily up.
It has corrections at times,but it's going steadily up.
What this is doing, what thepermanent fund is doing, is sort
of flatlining.
So they're saying, look, we areless risky, we're less volatile
than the S&P and so we'rebetter.
(16:54):
If you look at the beta, whichis a measure of volatility, we
have a better beta than does theS&P because the S&P is more
volatile.
They're not looking at the endresult of where the S&P is
taking you.
Speaker 2 (17:06):
Sure, if you're looking at it month to month,
the S&P is much more volatile,even sometimes year to year.
But if you're looking at it ina 10-year, which is what
investment is supposed to beabout it's supposed to be about
the long term.
If you look at it in the oneand three and five-year averages
is you can see that it's 50 to100 to 150% higher returns if we
(17:35):
go with a more volatile plan.
Speaker 1 (17:36):
I mean, I don't understand.
And I guess the third thing Iwould add is we've got a highly
unsophisticated board.
We've got political appointeeson the board of the permanent
fund and they're the ones thatare ultimately responsible for
what's happening here.
So they don't know.
In all honesty, I don't thinkthey know enough to ask
questions, they don't knowenough to pose alternatives, and
(18:01):
so they're being advised bythis staff.
That again alternatives, and sothey're being advised by this
staff.
That, again, is well paid.
A bunch of them in Juneau, abunch of advisors that they're
able to keep on contract.
A billion dollars worth ofadvisors they're able to keep on
contract.
So if they ever want to jumpship, they've got friends out
there they could jump to, I mean.
So we've got a combination ofthings, but I think I think at
(18:24):
the apex of it is a board that'sreally very unsophisticated in
this stuff Likes to take selfiesof going to board meetings.
We saw that this past week whenthey were on their way to a
board meeting Likes to takeselfies and say we're board
members, but they really don'tknow what they're doing.
Speaker 2 (18:41):
Yeah, this is some crazy stuff.
And a boy, I'd love to put youin a room with all these guys
for about 30 minutes and, just,you know, ask them some
questions, but you know, that's,that's, that's never going to
happen.
That's never going to happen.
Uh, unfortunately.
All right, brad Keithleycontinues.
The weekly top three continues.
(19:02):
We're on to number two, andnumber two is what should we
expect from Trump's not hisupcoming visit, but he just had
three.
I mean, maybe he'll be havingan upcoming visit.
I put upcoming into what Imeant was his visit.
That just happened with all ofhis talking heads from the EPA
and the Corps, and I mean allthe guys that just showed up.
(19:25):
So, brad, we just had all theluminaries in town.
What should we expect from thisvisit?
Speaker 1 (19:32):
Well, we've got three major ones in town We've got
the Secretary of the Interior,we've got the Secretary of
Energy and we've got theDirector of the Administrator of
the EPA, environmentalProtection Agency, and that's
who have been in town and theybrought a lot of attention, I
think, to issues that Alaska hashad, significant issues that
(19:55):
Alaska has had in the past withgetting permits and getting
leases and getting access toadditional lands and getting the
permits timely to develop thoselands when they found oil and
gas on those lands.
And I think they've done agreat job this past week of of
bringing those issues toattention and bringing attention
(20:18):
to the fact that the Trumpadministration is different
about that and has and hasprogressed that.
It's been interesting to watchDan Sullivan, who's up for
election in two years is or in20 next year.
It'd been interesting to watchDan Sullivan sort of glue
himself to those three and takea lot of credit for and he
(20:39):
deserves some of it take a lotof credit for progressing those
issues and getting theadministration to pay attention
to them.
Here's what I think is reallygoing to be the result not so
much of this visit but of theefforts by this administration
to loosen up the rules and openup lands and promote development
(21:00):
.
I think that the Willow projectConoco's Willow project, which
had a number of additionalpieces to it at the time that
Willow applied for it, inaddition to the core project,
had a number of additionalstep-out projects in its
application that were deniedessentially by the Biden
(21:20):
administration.
I think those additionalprojects likely will go forward,
be permitted and within thefour-year span of the current
administration, conoco will beable to get so far along with
those that they likely won't beable to be undone.
So I think that's a plus ofwhat the Trump administration is
(21:43):
doing.
I think there will beadditional leasing.
There'll be additional leasingin NPRA, there'll be additional
leasing, there'll be leasing inANWR and I think people will
respond to that not by payinghigh prices but will respond to
that by putting some risk moneyin to see what happens.
(22:03):
You're not going to get aproject in ANWR and you're not
going to get additional projectsin NPRA developed within the
four-year window of the Trumpadministration.
Npra developed within thefour-year window of the Trump
administration.
But if the leases are available, I think people will put up
money to buy those leases andwill begin the process of
evaluating whether the oil andgas underlying those additional
(22:25):
leases is economic to produceand we'll get sort of down the
road.
Here's the key.
At the end of that four-yearwindow we'll have another
election and if the election thepresidential election is a
continuum of the Trump approach,then that spade work begun
(22:46):
during that four-year windowwill start to produce results in
terms of finding prospects andapplying for permits and
beginning to go forward with newprojects.
But you're not going to findpeople putting a huge amount of
money, investing a huge amountof money into those projects
until they know what's going tohappen at the end of that
four-year window is put a bunchof money in in trying to define
(23:13):
and identify a project and startputting your arms around a
project during the four-yeartime period and then at the end
of that come back to a Bidenadministration again and all of
a sudden have all that stuffdenied.
So we'll see outside of Willow,which I think will make some
solid steps toward additionaldevelopment, which I think will
make some solid steps towardadditional development.
(23:35):
I think we'll see somebeginning steps in MPRA, other
parts of MPRA and in ANWR duringthat period.
Ak LNG, one more AK LNG.
You know God love it.
We'd all wish that project togo forward.
But even when you look at thearticle in the ADN today about
(23:56):
the results of their trip to theslope and all of the talk that
they did, those officials didabout the AKLNG project, you see
very little response frompotential customers from Japan
or from Korea or from Taiwan orfrom the Philippines.
Everybody's being careful, allof the potential customers are
(24:16):
being careful.
Until they see hard and fastnumbers on what the project
costs are going to be and whatthe prices are going to be, and
Dunleavy, sullivan and all ofthe federal officials can talk
all they want about how thisproject's going to go forward.
Chris Wright said.
The Secretary of Energy saidwe're going to twin the TAPS
pipeline.
(24:36):
They can talk all they wantabout that, but until we see
hard and fast numbers we're notgoing to see a lot of progress
on that.
Speaker 2 (24:44):
Brad Keithley, alaska's four sustainable
budgets, the weekly top three, Imean.
Overall, though, this was agood visit and it shows that the
Trump administration, I guess,is pretty serious about what's
going on, right.
I mean, that's the kind of thewhole point, that's the, that's
the direction they're going.
Speaker 1 (25:02):
Yeah, I think it shows attention to Alaska, which
certainly the Trumpadministration is giving, and in
Sullivan term you get some ofthe credit for that.
Governor Dunleavy gets some ofthe credit for that.
I think it shows attention toAlaska and I think it shows
incremental steps.
But aside from Willow, which Ithink it does show it is going
to show concrete benefits fromthis, aside from Willow, I think
(25:25):
I think it's all going todepend first of all on what the
perception is about what's goingto happen in four years with
the next election cycle, on whatthe perception is about what's
going to happen in four yearswith the next election cycle,
and secondly about what thenumbers are going to say on
AKLNG and to some degree theTrump administration is working
at cross purposes on AKLNG.
When you look at steel costs,when you look at machine costs
(25:56):
used in the pipeline business,those costs are escalating
rapidly.
It's hard to do economics inthis cycle.
We've got friends down in thepipeline industry in the lower
48, and I'm asking them abouthow they're doing their projects
.
They said we're takingvacations.
We're going to wait until thissettles for a while before we
make big decisions about bigmoney, because we don't know
where the costs are going.
So I think on AKL&G we can talka lot, and they certainly have
(26:18):
talked a lot.
We can encourage potentialmarkets to look at it and
they've certainly done a lot ofthat and they can talk a good
game about how they're going tobe supported.
But until those numbers come in, and until the numbers stick,
until they translate into hardand fast projections, offers of
(26:39):
what the rates are going to befor the, for the pipeline costs,
uh, until those numbers stick,we're not going to see a whole
lot of real progress on that, onthat front.
Speaker 2 (26:47):
Well, and this has been your and my contention for
well ever since we startedtalking about it uh, at least 10
years.
And this was something that Ihad changed my mind on about,
probably close to 15 years ago,because I was very much you know
, gas tomorrow, let's get gastomorrow.
Until I started talking to somefolks much smarter than me and
(27:08):
I said how come we can't get itdone?
And they laid it out and theysaid it's all about the
economics, right, it's all aboutthe.
We've got to get it andsomebody's got to pay for it,
and then they've got to be paidback.
And I started looking at it andrealized until the economics of
this project work out, we cantalk about it all we want, but
it's just pie in the sky untilwe get solid numbers and
(27:29):
somebody who's willing to takethat investment.
Now, if Trump did it as anational security or national
infrastructure project and thegovernment paid for a big chunk
of it, well, maybe it's doable,but if you're looking for
private people to pick up thepieces, I don't know how they
get it done.
Brad, I really don't.
(27:49):
I don't care how many pressconferences you have and how
many people you sign letter ofintent of oh yeah, we'd love to
have your gas, but you knowagain, nobody's going to jump
when it's 30 or 40 percent overmarket value.
Speaker 1 (28:03):
Yeah, exactly right, michael.
And and you know what, what?
What the AKLNG project has doneis has done a good job of sort
of creating a scenario underwhich all this would work.
If they filled the pipelinecompletely, if they had it going
up 365 days a year, ifproducers were willing to sell,
(28:23):
develop and sell gas at a dollar, which is the assumption if
they were willing to do that,then the economics would look
sort of marginally okay.
And they've done a great job, Ithink, of creating that
scenario under which thingsmight be okay, but the
likelihood of that scenariocoming to pass being the actual
(28:44):
scenario that develops isrelatively low.
One other thing that I will adda lot of my friends in the lower
48 say, oh, this is just kabukitheater.
I will add a lot of my friendsin the lower 48 say, oh, this is
just kabuki theater.
What's really going on is Japan, korea, taiwan all of these
people are looking at AKLNG andsaying good things about it and
listening to Trump and lettingTrump talk about it a lot as a
(29:06):
negotiating tool for lowerprices out of the Qataris, who,
gutter, has a huge amount of LNGthat they're marketing, and
other LNG projects throughoutthe world, including LNG
projects on the Gulf Coast, andso what Alaska really is again
from my friends in the lower 48,what Alaska is really being
(29:28):
used for is a stalking horsesaying you know, yes, if all
these numbers came together itmight be an economic project
we're going to, we would tilttoward that project.
If it was otherwise economic,we would tilt for that project
because of the strategicbenefits and sort of just trying
to get gutter to say, okay,well, we'll drop our price
another 50 cents If that's whatit's going to take to get you to
(29:51):
buy from us or Australia or theUS Gulf Coast projects.
My friends in the lower 48 saythat's really the game that's
being played here.
And maybe it is.
And, as I said, aklng has puttogether a scenario under which
maybe it could all fit.
(30:12):
But when the numbers, when thetrue numbers come in, when the
true economics come in and it'stime to lay down real money,
that's the point at which wewill find out whether any of
this works.
Speaker 2 (30:25):
Wow, brad, you're on track, not off the rails.
As usual, brad's been sayingthe same thing this whole time.
You know, why do I even bother?
Why do I even bother?
Look, I'm cautiously optimisticthat maybe, with all this
attitude of development andeverything else, some things
will happen.
Are all the things going tohappen that everybody's talking
about?
Like, do I believe that we'regoing to have an Alaska LNG
(30:46):
project?
I don't think so, but maybesome other things will come out
of it.
I don't know, you know, but Idon't believe that it's the
end-all, be-all that everybody'sback-slapping each other over.
Speaker 1 (30:58):
Yeah Well, again, some of this is the Dan Sullivan
re-election tour and theback-slapping is oh, dan, you
did a great job in getting theseguys to come and getting a
positive attitude and look.
A positive attitude is come andgetting a positive attitude and
look.
A positive attitude is muchbetter than a negative attitude
and in the case as I say in thecase of Willow I think it will
(31:20):
produce some positive results,some additional development that
otherwise isn't going to occur.
Actually, that puts the budget,the state budget, in a weaker
position because of the way oiland gas tax credits work.
It'll extend out the time thatwe actually get revenue out of
these projects, but nonetheless,it's a good thing to have
(31:41):
additional oil and gasdevelopment in the state.
But we can't.
I mean those people who say, ohwell, that's going to solve the
problem, we don't need to worryabout anything else.
That's wrong.
And those people who say, oh,if we get AKL and G, that'll
solve all of our problems.
That's wrong.
A we're not going to get.
It's very unlikely.
We get AKL and G and B.
Look, akl and G is predicatedon a field price for gas of a
(32:06):
dollar or less.
What's the royalty?
There's not a whole lot ofroyalty that gets produced out
of a, out of a, out of a dollarsales price.
So it it's it.
It is.
It is better to have a positiveattitude.
I think it will serve in termsof willow some additional
development.
I think it will position Anwarand some parts of NPRA for
(32:29):
additional development If infour years the nation looks like
it's going to continue downthis road, as opposed to
deviating yet again.
But you know, we've got totemper this back-slapping within
the bounds of reality.
Speaker 2 (32:46):
Right and again the other back.
You know, the backhandedproblem with all the things that
the president's doing isobviously it's driving the cost
of oil down worldwide.
He said he had a goal ofwanting to get oil in the low
fifties was his goal, and we'restruggling at 65.
What happens if he gets it downinto the mid fifties I mean,
(33:08):
it's a you know then it createsa real problem.
Speaker 1 (33:12):
It's a real problem for sure, yeah, we've got a lot
of cross-purposes going.
We've got the desire to get oilprices lower, we've got the
desire for all these tradeissues, trade resolutions that
result in higher import prices,that drive up the price of steel
and drive up the price ofmachinery and other things that
(33:32):
we've developed foreign supplychains for, and we've got the
desire to develop, which relatesto cost, which relates to the
cost going up, so cost going up,revenue is going, price is
going down, so it's um it.
There.
There's a lot of moving partsand a positive attitude about
some of the moving parts is good, uh, but we've got, we've got
(33:54):
to see where all these movingparts land before people start
putting down hard and fast uh,hard and fast commitments to
take gas the weekly top threecontinues with number three.
Speaker 2 (34:09):
Gas weekly top three continues with number three.
And that is, of course, uh,angela rodell.
She only cares about theworking people, she just cares
about the working people.
All right, brad, tell me, tellme all about it.
What do we got here?
Speaker 1 (34:19):
this is.
This is.
This is we could we couldalmost classify this as the
humor segment of the show AngelaRodale, former director,
executive director whatever thehell the title is of the
Permanent Fund Corporation,after she left that job,
somewhat unceremoniously.
(34:39):
After she left that job, shestayed in Juneau.
She stayed active.
She ran for mayor of Juneau inthe last election, lost but ran
for mayor of Juneau and hasbecome active in Juneau politics
.
She wrote an op ed, a my turn,what they call a my turn in the
Juneau empire, the title ofwhich is time for a government
that works for working people.
(35:00):
And what this is built aroundis a three-pronged petition
that's being circulated withAngela's support, to do three
separate things with respect toJuneau.
One is impose a property taxcap.
The Juneau Assembly keepsincreasing the property tax
(35:20):
rates and it would impose a cap.
The second is to exemptgroceries and utilities from a
sales tax.
Juneau currently has a salestax, doesn't exempt groceries
and utilities and the proposalis to have petition, is to have
by petition, to have an electionthat would exempt groceries and
(35:41):
sales tax.
That would exempt groceries andsales tax.
And the third is to restorewhat she refers to as restore
poll-based voting.
Juneau has elections by ballotnow, basically, and it would
restore the obligation to go tothe polls to cast a vote.
So that's what she's promoting.
(36:03):
And here's the paragraph where Istarted chuckling.
The paragraph is this thecurrent system hits working
families the hardest.
She's talking mostly about theproperty tax cap and the
exemption for groceries here.
The current system hits workingfamilies the hardest.
It's regressive, it'sunsustainable and it's driving
(36:24):
people away.
If we want to keep Gino livable, not just for the wealthy but
for teachers, nurses, fishermen,caregivers and retirees, we
need to act now.
So Angela is focusing onworking families and concerned
about a regressive tax systemand concerned about a system
(36:46):
that focuses just on the wealthyand she's trying to undermine
it.
This is the same Angela Rodalewho, maybe a year, maybe two
years ago, in a debate that hadme defending the PFD and Larry
personally saying we need tochange the PFD, had Angela
Riddell as the third personarguing that we ought to
(37:08):
eliminate the PFD and all of themoney ought to go to the state.
And keep in mind that the PFDis one half of what happens with
POMV distributions.
It's the part that goes largelyto middle and lower income
Alaska families.
The other half protects thewealthy and protects all
(37:29):
companies by substituting fortaxes that they would otherwise
pay, and she wanted to eliminatethe PFD and use all of the POMD
draw for this tax protection,tax substitution role that helps
the wealthy and, by using PFDcuts, undermines working Alaska
(37:51):
families, middle and lowerincome Alaska families.
This is the same.
We now have the same AngelaRodale talking about protecting
working families againstregressive taxes.
We have the same person doingthat now, who you know a couple
of years ago, or a year a coupleof years ago, was arguing for
(38:13):
eliminating the PFD entirely.
What's the?
You know, when you look at theevent, sometimes you look at
Venn circles or, and you try tofigure out where the overlap is,
who they're, who they're tryingto protect.
When you look at the Venndiagram of of what happens with
PFD cuts, which she advocates,and you and you look at the Venn
diagram of of what happens withPFD cuts, which she advocates,
and you and you look at the Venndiagram of what happens with,
with, with what she's proposing,with the property tax cap and
(38:35):
the and the sales tax exemptionsand so forth, the, the, the
group that's getting protectedis the wealthy.
The wealthy is going to getprotected by the property tax
cap.
The wealthy is going to getprotected by uh, to some degree,
by by, by groceries and theexemptions for groceries, and uh
, uh and and utilities.
(38:56):
Um, so what's really going onis the working families that
Angela is really interested in,really interested in protecting
her, the wealthy families thatAngela is really interested in,
really interested in protectingher, the wealthy families?
She's couching it like ZachFields does and Elise Galvin and
a number of others at thelegislature.
She's couching PFD, or she'scouching her proposal at the
(39:20):
Juneau level.
She's couching it as oh, we'regoing to look out for working
Alaska families.
That's what Zach Fields andElise Galvin and the others do
at the legislature.
They say, oh, PFD cuts are toprotect working Alaska families.
We're going to take that moneyand we're going to spend it so
much better to protect workingAlaska families than they can
(39:40):
themselves.
So it's a tool, it's a device.
Saying you're trying to protectworking Alaska families is a
device.
To try to sell a product, Inthe case of Zach Fields and
Elise Galvin, is to sell PFDcuts.
In the case of Angela, it's tosell property tax caps.
Sort of funny to see thejuxtaposition of what she's
(40:10):
saying now compared to what shesaid, uh, just a year or a
couple years ago.
Right, uh, about pfds.
It's not about working alaskafamilies.
Speaker 2 (40:14):
There's something else going on here and and I
can't, I I pulled the article upthis morning and read it real
quickly and then I just wentback to it and, of course, the
paywall at the juno empire, justyou know now I can't read it,
but but there was a, there was a, there was a paragraph there
where she talked about againtalking about working class
families and how the people aredisconnected now from their
(40:35):
government because they're not.
I mean, it's like she's takingsome of the greatest hits from
people like Ben Carpenter andthings like that and she's
twisting it to her, she's makingherself sound so reasonable and
so all these other things, whenyou know she's a big government
gal.
That's what she does.
She's all about.
She doesn't care about theworking people.
It's a, it's a, you know it's.
(40:57):
It's again like you said, she'sselling the product.
But you can see how they cherrypick some of this verbiage and
they use it and twist it totheir own, to their own ends
yeah, and, and you know, and soit's a well-worn path.
Speaker 1 (41:10):
Because when you look at the legislature, when you
look at zach fields, when youlook at andy joseph, so when you
look at elise galvin, when yougo down the line on the on the
uh, on the on the house majorityand, to some degree, some
members of the house minority,when you go down the line, it's
all, it's that verbiage.
It's we're protecting you,we're protecting you with child
(41:30):
care credits, we're protectingyou with spending on this and
that government program.
We're working on your behalf.
It's at the same time they'redoing that, they're saying
they're protecting you.
At the same time, they'retaking money out of your pocket,
out of middle and lower incomeAlaska families, through PFD
cuts, and they're taking moremoney out through PFD cuts than
(41:55):
it would cost, than the benefitsthat they're redistributing.
So it is never buy into thewords, just like Angela, and
never, never buy into the wordsjust like Angela.
Don't buy into the words thatshe's saying.
Understand the economic impactof what's going on with their
(42:16):
proposal and the economic impactthat she's, the totality of the
economic impact that she talksabout, both at the local level
and at the state level, is notpro-working Alaska family.
It's pro-wealthy and thetotality of what Zach Fields and
Elyse Galvin and Andy Josephsontalk about at the state level
is not pro-working Alaska family.
(42:38):
It's pro because of the waythat they're using the POMV draw
to protect against taxes.
It's pro all companies, protoptop 20%, pro-non-residents.
That's the economic effect ofwhat they're arguing.
And Angela's?
I just had to chuckle as I wasworking through this op-ed
(43:02):
because it's just a bunch ofwords.
It's, you know, whole testedwords.
This gives the response youwant.
Just throw them out there.
Have some sort of idea abouthow that sort of relates, but
throw them out there and then dowhatever you want in terms of,
in terms of the actual proposal.
Speaker 2 (43:21):
Right, no, and and again.
This is just again anothersnapshot of the mindset that's
in Juno, right now.
For what's going on?
Like you said, Galvin Fields,these kind of people who are
taking these things and twistingthem to the point to where
you're saying you know you needus.
This is why we're here toprotect you from you.
(43:42):
Essentially I mean, that'sessentially what the whole
fallacy is is that we knowbetter than you how these money
should be spent, and so let usdo that.
And if we put put it under theguise of protecting the working
class, well, that just soundssexy, right?
I mean, that's really what itall comes down to.
It's all about how is itpackaged at this point?
Speaker 1 (44:05):
Yeah, exactly Right, we.
I did some numbers, I did somecalculations over the weekend, I
used my weekend for that, andwe have like a billion $500
million that's been transferred.
With these PFD cuts, the PFDcuts that the legislature just
enacted We've had a billion $500million about a billion and a
half that's been transferred outof the pockets of middle and
(44:27):
lower income Alaska families andis being transferred to being a
tax shelter for the top 20%,the old companies and
non-residents.
But they say they're doing it.
They say they're doing it forthe benefit of working Alaska
families, but we've had $1.
Half dollars taken out of theirpockets to fund the additional
(44:50):
tax shelters.
But the words, when you look attheir words, oh, we're just
doing it to protect you,Government's here to protect you
and we're taking your money.
We're taking money out of yourpocket and sort of sprinkling
some of it back on some of youto protect you.
Same way with Angela we'retaking money out of your pocket
(45:12):
and we're sprinkling some of itback to protect you.
Speaker 2 (45:15):
Boy Kyle comes into the chat room like a bomb and
tries to tell everybody andapparently he missed the whole
part at the beginning where wetalked about how the governor is
responsible for what's going onwith the Permanent Fund fund
board.
But what we were talking aboutwith the legislature is their
fascination with combining thecorpus of the fund and the era
and how that is wrong.
(45:35):
But he's telling us how wrongwe are.
Um, so I, you know, I, I, kyle,you can't just pop into the
room, read one comment and gooff without context oh yeah,
kyle can well, that's easy forhim to do.
He can, he can, but it's not theright thing to do.
Is what I'm saying?
I guess you know, uh, and thenget heated when somebody tells
(45:58):
him to, uh, to, to, you know,pound sand or whatever, but
anyway, um, I mean, this is,this is the, this is the
reaction of what's going on.
The problem is they're all toblame, right, they're all to
blame.
The legislature is to blame,the governor is to blame, the
historically past legislaturesare to blame, the Republicans
are to blame, the Democrats areto blame.
(46:20):
Everybody has got a fair shareof blame on what's going on
right now, even the electoratefor putting these numbskulls
back in office over and over andover again.
Speaker 1 (46:35):
But yeah, it's a problem, right?
I mean this is an overallproblem.
It is, and it starts with theperception that the legislature
knows better than the citizens.
The legislature knows betterhow to use citizens' money than
the citizens do, and so thelegislature can take money out
of the pockets of middle andlower income Alaska families
huge, you know, a billion and ahalf out of the pockets of
(46:56):
middle and lower income Alaskafamilies and redirect it over to
their chosen uses of the moneybecause they know better.
But the problem is they don't.
The problem is, while it maybenefit a few, why a few may get
more benefits out ofredirecting that money than they
(47:20):
would have had they got themoney in their pockets.
It's taking money out of allmiddle and lower income Alaska
families.
It's taking money out of allmiddle and lower income Alaska
families, is taking money out ofall of the economy that's
driven by middle and lowerincome Alaska families in order
to redirect it to a few.
So, yeah, when the Republicansthink they can do that, when the
Democrats think they can dothat, when voters think they
(47:41):
want to elect people who do thatit causes a problem because we
are redistributing money thatotherwise, by statute, is
supposed to go to the pockets ofmiddle and lower income Alaska
families and the legislature isredirecting it into the pockets
of a select few, and that'sgoing to be a problem.
Speaker 2 (47:58):
Yeah, no, it is.
And, of course, the more theytalk about this, the more
anxious I get.
The more they talk aboutcombining the corpus of the fund
and the ERA, the more anxious Iget.
The more they talk aboutcombining the corpus of the fund
and the ERA, the more anxious Iget, because most people, most
Alaskans, don't understand howit works.
They don't understand themechanisms for how all these
things work, and so they justbelieve what they're told in the
(48:21):
news media, because the newsmedia is not digging deeper into
it, not giving you the problemsor the foibles or the pitfalls
of it, and they just go oh, ok,you have to do this to save us.
Ok, go ahead.
You know, and you know it'sbecause it's complicated and
most people are just not payingattention and the news media is
not doing their job in digginginto this and saying, ok, why,
(48:43):
why would what?
Ok, so you want to do this?
What are the downsides?
Saying, okay, why, why wouldwhat?
Okay, so you want to do this?
What are the downsides, whatare the pitfalls, what are the
problems?
Oh well, nowhere, because thisis how all sovereign wealth
funds work.
No, no, that's not what we're.
No, that's not what's going on,but you know, this is this, is
this thing.
This is what really makes menervous about the future of
Alaska is, if we get to thispoint, to where they're able to
(49:03):
slap these things togetherwithout any kind of real
resistance, where does it gofrom there?
Speaker 1 (49:08):
Yeah and we don't have.
I mean, people don't back upand step back and say, okay, why
do we need to combine these twoaccounts, the earnings reserve?
I got to say Joe Pasquan,former Senator from Fairbanks,
who I disagree with on a lot ofstuff.
Pasquan's got this right.
Pasquan has backed up and hesaid, okay, let me understand
this.
The earnings reserve is beingdrained, so we need to do
(49:32):
something to protect, to allow,to ensure that we continue to
get money out of the POMV or outof the permanent fund, but the
earnings reserve is beingdrained.
We aren't earning enough moneyto keep the earnings reserve
whole.
There's a problem there and theproblem is, of course.
The problem is, of course, thepermanent fund corporation isn't
generating enough earnings well, shouldn't that be a red flag
(49:53):
to begin with?
Speaker 2 (49:53):
shouldn't we either, you know, stop, we're not
earning enough to draw from hereto make, so shouldn't we stop
drawing at that point, or find away to earn more?
You know, I mean one of thosetwo things, that's the you know,
and the fact that they theypurposely have done this by
transferring $8 billion into thecorpus of the fund over the
last five years.
So, you know, for futureinflation proofing, right, for
(50:16):
future inflation proofing, uh.
And now they're like oh, now wedon't know what to do.
I mean, no, now, what do we do?
Now?
You know, um, and it's a crisisof their own making.
It's exactly what they, it'sexactly what they wanted to do,
which is a little spooky at thispoint for sure.
Speaker 1 (50:33):
Yeah, but Pascavan's got it right.
But but Pascavan's one of thefew I mean Joe, joe's asking the
right questions.
But if you read the media, ifyou read Sean, if you read the
ADN, or you read the AlaskaBeacon, or you read, you know,
the Fairbanks News Minor, or youread any of them, they're all
(50:53):
going oh yeah, well, there's aproblem, the earnings reserves.
So let's just, let's justcombine the two, that'll do it.
It does it only because youthen set up an opportunity to
drain the corpus.
Yeah, think, think, think aboutwhat the consequences are.
But we don't have that.
Speaker 2 (51:12):
No, it's some crazy stuff, but you know, don't worry
, angela will save us.
She's here to fight for us.
She's here to fight for us forsure, yeah, yeah, for the
working man and woman.
Speaker 1 (51:26):
She's here to protect us from arsenal it's almost
michael, as if they walk intotheir pr consultants and they
say, okay, what?
What phrases poll test the best?
Forget what I'm proposing.
Just tell me what phrases polltest the best and I'll use those
.
Yeah, and I'll, and.
And then I'll do what I wantbehind the scenes.
But I'll use those phrases, um,and claim and claim that that's
(51:47):
what I want behind the scenes.
But I'll use those phrases andclaim that that's what I'm doing
.
I'm protecting Alaskans.
I'm looking out for workingAlaska families.
Speaker 2 (51:55):
All right, Brad Well, thank you so much for coming on
board.
We will talk with you againsoon, okay, Michael?
Thanks for having me.
Speaker 1 (52:02):
Well, that's a wrap for another week's edition of
the Weekly Top Three fromAlaskans for Sustainable Budgets
.
Thank you again for joining us.
Remember that you can find pastepisodes on our YouTube,
soundcloud, spotify and Substackpages, and keep track of us
during the week on Facebook andTwitter.
This has been Brad Keithley,managing Director of Alaskans
(52:23):
for Sustainable Budgets.
We look forward to you joiningus again next week on the Weekly
Top Three.
Hi, this is Brad Kiefle, managing Director of
Alaskans for Sustainable Budgets.
Welcome to the weekly top three, the top three things on our
mind here at Alaskans forSustainable Budgets for the week
of June 2nd 2025.
The weekly top three is aregular segment on the Michael
Duke Show.
The show broadcasts on bothFacebook Live and YouTube Live
(00:32):
as well as via streaming audiofrom the show's website.
Weekdays from 6 to 8 am.
I join Michael weekly in thefirst hour of Tuesday's show
from 6.10 to 7 am for adiscussion between the two of us
about our three issues.
We post the podcast of ourdiscussion following the show on
the Alaskans for SustainableBudgets Facebook, youtube,
(00:54):
soundcloud, spotify and Substackpages.
Also on the Alaskans forSustainable Budgets website, as
well as the projects page onnational blog site mediumcom.
You can find past episodes ofthe weekly top three also at the
same locations.
Keep in mind that, in additionto these podcasts during the
(01:15):
week, you can also follow andparticipate in the discussion
with us of these and otherissues affecting Alaska's fiscal
and economic condition byfollowing us on the Alaskans for
Sustainable Budgets Facebookpage and through our posts on
Twitter.
This week, our top three issuesare these First, we explain why
(01:36):
the Permanent FundCorporation's April results
demonstrate our point.
Second, we examine thepotential impact of the Trump
administration's focus on Alaska.
And third, putting all thepieces together, we discuss
which working people exactlyAngela Rodale really seems
(01:58):
concerned about.
And now let's join Michael.
Speaker 2 (02:03):
Well, Brad, let's get started, for today We've got a
lot of stuff to cover and someinteresting things.
It wasn't too long ago what wasthat?
Just last week.
Maybe Do you remember thePermanent Fund Corporation's
recent brag session about howwell they were doing.
What's the update on that, Brad?
Speaker 1 (02:26):
Well last week or a couple of weeks ago, but in any
event, one of our segments wason the Permanent Fund
Corporation's press release thatgot picked up by Must Read
Alaska on how well they weredoing through March.
It was odd because it was like20 days after the end of
(02:48):
publishing March results, butnonetheless they had a press
release and they said how wellthey were doing on the fiscal
year basis and how well theywere doing on a longer term
basis.
Since that time they'vepublished April and this is a
lesson.
This always should be a lessonNever publish something on a
(03:10):
monthly basis when you know thenext month could undermine what
you were claiming on in theprevious month.
So let's take a look at whatthe April results are for the
Permanent Fund Corporation andmonthly after the Permanent Fund
Corporation publishes theseresults, we do a post, we do a
(03:30):
table of what the Permanent Fundresults are, permanent Fund
Corporation results are, andpublish it as part of our
monthly chart series.
So this is April's chart and ifyou've got it we can pull it up
.
This chart shows it's a runningtab since FY12 on an annual
(03:55):
basis and then on a fiscal yearto date basis and then on a
five-year average, three-yearaverage, rolling one year
12-month average basis.
It looks at what the permanentfund results have been in the
left-year average rollingone-year 12-month average basis.
It looks at what the permanentfund results have been in the
left-hand column, what theVanguard S&P 500 results have
been their ETF have been, whatthe total fund return objective,
(04:20):
which is the CPI 5% plusinflation, what that standard
has been.
That, to me, is the mostimportant standard to use as a
comparison because that's thebasis on which the POMV draw is
based.
It's based on a 5% taking, 5%real return off the permanent
(04:43):
fund.
So that standard sort of tellsyou how we're doing, how the
permanent fund's doing againstthe POMV draw, whether it's
keeping up with the POMV draw,running ahead or lagging behind.
And then off to the right wehave all of the various
benchmarks self-createdbenchmarks that the permanent
fund has used over time to judgeits own performance.
(05:05):
It's sort of like, hey, let meset a standard that I can judge
myself against, that thepermanent fund has used over
time to judge its ownperformance.
It's sort of like, hey, let meset a standard that I can judge
myself against.
And that's what all of the onesover to the right are the
year-to-date results are belowthe line, below the yellow line.
The yellow line is an averageof FY12 through FY24.
The line below that is thefiscal year to date average.
(05:29):
This is part of what thePermanent Fund Corporation was
bragging on for April.
It shows that the permanentfunds return year to date.
Fiscal year 25 to date, throughApril, is 4.7%, which is
actually a little bit higherthan what they were saying in
March.
But here's the rest of thenumbers.
The S&P number's down.
The S&P number is 2.92, but Ichecked this morning and, taking
(05:54):
into account the futures marketthrough the end of June, the
S&P has bounced back up.
This was its low point, hasbounced back up and it's now
showing an 8 plus percent returnon the year by the time we get
to the end of the fiscal year.
The total fund return objective, cpi plus five and again this
is the important standardbecause it's the one that is
(06:16):
used for the POMV draw sort ofreflects the POMV draw.
That's 6.24.
Now in the March release thepermanent fund was
congratulating itself for beingrelatively near the total fund
return objective.
But now the total fund, whenyou roll a month forward, the
total fund return objective isnow 6.24%, 1.5% ahead of where
(06:38):
the permanent fund is.
Permanent fund is again.
These are the permanent fund'sown benchmarks that they create
for themselves.
So permanent fund is exceedingslightly its performance.
Its own performance benchmark4.63%.
The permanent fund's got a 4.7.
But look at the passive indexbenchmark.
This is the benchmark createdby the permanent fund to say,
(07:01):
look, if we didn't activelymanage this fund, we sort of put
it on autopilot.
It's another way of putting iton autopilot.
If we put it on autopilot, thisis what would be the returns
that we'd be generating.
And the passive index benchmarkis 5.81, a point and a half a
point, 1.1, ahead of wheretheermanent Fund Corporation's
(07:25):
return is.
So last month they wereextolling how good a job they
were doing for their activemanagement of the Permanent Fund
.
This month's results areshowing no, they're lagging.
Their active management isactually costing Alaskans.
In terms of returns.
Relative to the Perman's ownpermanent fund corporation's own
(07:45):
passive index benchmark, theaverages below the five-year
average.
The permanent fund is producing,on a five-year rolling average
basis, returns that look prettygood compared to the other
benchmarks.
Well, except for the S&P.
(08:05):
The S&P is at 15.5, six pointsahead of where the permanent
fund is.
But the total fund returnobjective.
The CPI plus five is at 9.59.
They're about in the ballpark.
And then on the five-yearaverage, the permanent fund is a
little bit ahead of that.
But when you look below that,when you sort of take the cover
off or take the hood up, liftthe hood up and look what's
(08:27):
going on underneath that, thethree-year average, which will
become the five-year average atsome point, is rolling into the
five-year average and a muchbetter review of how the
permanent fund's done recentlycompared to a few years back.
That may be distorting theresults.
When you look at the three-yearaverage, the permanent fund is
(08:48):
doing 4.9% on a three-yearaverage, compared to the S&P at
12.09, fully seven points aheadof where the permanent fund is
Total fund return objective.
The CPI plus five is 8.53, wellahead of where the permanent
fund is.
The performance benchmark, thepermanent fund's own performance
(09:10):
benchmark.
They're lagging it 4.9 to 5.2.
And they're lagging the passiveindex benchmark again, the
autopilot benchmark.
The three year average is 4.9compared to 6%.
So I think what these numbersare telling us and you can see
(09:32):
in the year-by-year results thatthere is one year FY21, the
bounce back year from COVID thatthe permanent fund did
exceptionally well.
They did a 29.73, not as goodas the S&P would have done.
The S&P had a 41.1, 41.0%return in that year.
But the permanent fund did wellin that year.
(09:54):
And what's really going on whenyou sort through these numbers
is that year FY21 is driving thefive-year results.
When you sort of exclude it andsay, okay, well, what have you
done for me recently?
And look at the three-yearresults, you see that the
Permanent Fund Corporation islagging significantly, not only
the S&P, not only the S&P, butalso the CPI plus five objective
(10:18):
and even its own passive indexbenchmark.
So I don't think we're going tohave another press release at
the end of this month.
I think they cherry-picked themonth they wanted to stand on
and then, well, just don't payattention to that guy, don't pay
attention to those numbersbehind the curtain Right.
Speaker 2 (10:38):
Well, what this tells us, even if you just look at
the bottom three rows there,which is the five-year, the
three-year and the one-yearaverage, the story is told the
permanent fund is not earningenough money, with the CPI plus
five, to be able to make thedraw, especially compared to the
S&P or the Vanguard fund.
(10:59):
The S&P 500 Vanguard fund whichis, you know, I mean it's twice
, almost three times, what thepermanent fund is earning on a
passive basis.
I mean you know that shouldtell the whole story right there
.
I don't care if you've got oneor two good months, what's the
five, three and one-year averagelook like?
And the bottom line is that wehaven't made enough money to pay
(11:22):
for everything and to keep thefund up to the proper amount and
we've lost out on well asignificant amount of money,
almost three times the amount ofearnings we could have got if
they had just sat there with theVanguard 500.
Speaker 1 (11:38):
Yeah, and this rolls in, Michael, and explains why
the press for merging the twoaccounts is so important to some
people.
Because you look at thepermanent fund returns, the
earnings the permanent fund isachieving compared to the CPI
plus five, which is what thePOMV draws based on, and you can
(12:00):
see that the permanent fund isconsistently running below what
they would need to be earning tokeep up with the CPI plus five.
So one answer to that would behey, maybe we ought to change
our investment strategy.
Maybe we ought to go onautopilot, because autopilot
would do better than we're doing.
Or maybe we ought to look atthe S&P strategy, because that
(12:22):
would do a heck of a lot betterthan what we're doing.
But instead of that, instead ofhey, maybe we ought to be
reevaluating our investmentstrategy.
What they're doing is they'retalking about merging the
permanent fund earnings and thepermanent fund corpus together
in a way that, as we've talkedabout on the show before, opens
(12:42):
the back door into the permanentfund corpus, so that when you
have as they are doing, when youhave this string of
performances that are lower thanthe CPI plus five and you're
not earning enough to cover thePOMV, draw what merging those
two accounts are going to do isallow them to come into the
corpus and start draining thecorpus to keep the money rolling
(13:05):
, even though they aren'tearning enough to cover the draw
.
Speaker 2 (13:10):
That's not to mention the fact that if they did go on
the set it and forget it schemeof the Vanguard 500, they'd
save themselves nearly a billiondollars in management fee.
A billion one like $890 millionin management fees per year per
year, yeah, exactly per year,uh, which is a lot.
When you're talking about an 80billion dollar funding, you
(13:32):
start chipping away at it onepercent at a time.
That's not a, that's not asmall amount, uh, by any strange
stretch of the imagination.
Um, I mean, this is just someastonishing stuff, and I am
surprised that more people, morenews outlets, more folks
they're just not, they're notpicking up on it.
Well, I mean, what, what?
What are we missing herequickly?
Speaker 1 (13:53):
Well, legislators aren't talking about it.
If you look at the news media,they follow what legislators say
and legislators aren't talkingabout this.
They're talking, instead, aboutmerging the two accounts.
They see these numbers,legislators see these numbers,
but they're talking aboutmerging the two accounts
together to allow the backdoorinto the corpus, and that's what
(14:15):
the media is following.
They're following thelegislators about that.
If we had legislators that weretalking about this instead, I
think the media would startpicking up on it.
Speaker 2 (14:25):
Brad, here's what I don't understand.
I'm just looking at thesenumbers 15 plus 12 plus 11, I
mean it's 22.
We're looking at, I mean thisis almost a 30%, that was 30,
almost a 40, almost a 42%increase over the 5, 3, and
1-year average, versus barely a20% increase over the five,
three and one year average,versus a barely a 20% increase.
(14:48):
You know, and if these guyswere really about making as much
money for the government asthey could, you'd think they'd
be clamoring to get to the S&P500 model instead of the current
managed model that thepermanent fund has.
What's the?
You know why?
What's going?
Speaker 1 (15:07):
on.
Well, a couple of things,michael.
One is the current approachemploys a lot of people down in
Juneau.
They've got a lot of analysts,they've got a lot of investment
advisors, they've got a lot ofpeople on contract that are
friends and friends on contract,friends and advisors on
contract, friends and advisorson contract, and so it's like
(15:29):
undoing any bureaucracy.
We don't want to do thatbecause, oh my gosh, how many
people would we have on thestreet in Juneau suddenly?
The second is this is sort of aclassic case of safety first
right.
A classic case of safety firstright.
If I rely on a bunch of advisors, if I do a bunch of you know
(15:49):
risk management and spend a lotof time on risk management, then
I'm not subject to being I'mlikely not going to be
criticized because I can alwayssay, hey, I just relied on these
guys, I relied on Wall Street,or I relied on these advisors,
or I put my money with theseguys.
You know, don't blame me, I'mthe one you know I relied on all
these, or I put my money withthese guys.
You know, don't blame me, I'mthe one.
You know, I relied on all theseother people and we had all
these risk management tools thatwe were using.
(16:12):
So it's aversion, risk aversionin a big way, you know.
And when they're asking aboutthe S&P, they say, oh well,
that's volatile, it goes up anddown, it goes up and down, it
goes up and down, it goes up anddown, and it does.
I mean, the S&P is morevolatile than the boring thing
(16:32):
that they've put together.
But the thing about the S&P, ifyou look at it over time, it
goes up and down, but it's goingsteadily up.
It has corrections at times,but it's going steadily up.
What this is doing, what thepermanent fund is doing, is sort
of flatlining.
So they're saying, look, we areless risky, we're less volatile
than the S&P and so we'rebetter.
(16:54):
If you look at the beta, whichis a measure of volatility, we
have a better beta than does theS&P because the S&P is more
volatile.
They're not looking at the endresult of where the S&P is
taking you.
Speaker 2 (17:06):
Sure, if you're looking at it month to month,
the S&P is much more volatile,even sometimes year to year.
But if you're looking at it ina 10-year, which is what
investment is supposed to beabout it's supposed to be about
the long term.
If you look at it in the oneand three and five-year averages
is you can see that it's 50 to100 to 150% higher returns if we
(17:35):
go with a more volatile plan.
Speaker 1 (17:36):
I mean, I don't understand.
And I guess the third thing Iwould add is we've got a highly
unsophisticated board.
We've got political appointeeson the board of the permanent
fund and they're the ones thatare ultimately responsible for
what's happening here.
So they don't know.
In all honesty, I don't thinkthey know enough to ask
questions, they don't knowenough to pose alternatives, and
(18:01):
so they're being advised bythis staff.
That again alternatives, and sothey're being advised by this
staff.
That, again, is well paid.
A bunch of them in Juneau, abunch of advisors that they're
able to keep on contract.
A billion dollars worth ofadvisors they're able to keep on
contract.
So if they ever want to jumpship, they've got friends out
there they could jump to, I mean.
So we've got a combination ofthings, but I think I think at
(18:24):
the apex of it is a board that'sreally very unsophisticated in
this stuff Likes to take selfiesof going to board meetings.
We saw that this past week whenthey were on their way to a
board meeting Likes to takeselfies and say we're board
members, but they really don'tknow what they're doing.
Speaker 2 (18:41):
Yeah, this is some crazy stuff.
And a boy, I'd love to put youin a room with all these guys
for about 30 minutes and, just,you know, ask them some
questions, but you know, that's,that's, that's never going to
happen.
That's never going to happen.
Uh, unfortunately.
All right, brad Keithleycontinues.
The weekly top three continues.
(19:02):
We're on to number two, andnumber two is what should we
expect from Trump's not hisupcoming visit, but he just had
three.
I mean, maybe he'll be havingan upcoming visit.
I put upcoming into what Imeant was his visit.
That just happened with all ofhis talking heads from the EPA
and the Corps, and I mean allthe guys that just showed up.
(19:25):
So, brad, we just had all theluminaries in town.
What should we expect from thisvisit?
Speaker 1 (19:32):
Well, we've got three major ones in town We've got
the Secretary of the Interior,we've got the Secretary of
Energy and we've got theDirector of the Administrator of
the EPA, environmentalProtection Agency, and that's
who have been in town and theybrought a lot of attention, I
think, to issues that Alaska hashad, significant issues that
(19:55):
Alaska has had in the past withgetting permits and getting
leases and getting access toadditional lands and getting the
permits timely to develop thoselands when they found oil and
gas on those lands.
And I think they've done agreat job this past week of of
bringing those issues toattention and bringing attention
(20:18):
to the fact that the Trumpadministration is different
about that and has and hasprogressed that.
It's been interesting to watchDan Sullivan, who's up for
election in two years is or in20 next year.
It'd been interesting to watchDan Sullivan sort of glue
himself to those three and takea lot of credit for and he
(20:39):
deserves some of it take a lotof credit for progressing those
issues and getting theadministration to pay attention
to them.
Here's what I think is reallygoing to be the result not so
much of this visit but of theefforts by this administration
to loosen up the rules and openup lands and promote development
(21:00):
.
I think that the Willow projectConoco's Willow project, which
had a number of additionalpieces to it at the time that
Willow applied for it, inaddition to the core project,
had a number of additionalstep-out projects in its
application that were deniedessentially by the Biden
(21:20):
administration.
I think those additionalprojects likely will go forward,
be permitted and within thefour-year span of the current
administration, conoco will beable to get so far along with
those that they likely won't beable to be undone.
So I think that's a plus ofwhat the Trump administration is
(21:43):
doing.
I think there will beadditional leasing.
There'll be additional leasingin NPRA, there'll be additional
leasing, there'll be leasing inANWR and I think people will
respond to that not by payinghigh prices but will respond to
that by putting some risk moneyin to see what happens.
(22:03):
You're not going to get aproject in ANWR and you're not
going to get additional projectsin NPRA developed within the
four-year window of the Trumpadministration.
Npra developed within thefour-year window of the Trump
administration.
But if the leases are available, I think people will put up
money to buy those leases andwill begin the process of
evaluating whether the oil andgas underlying those additional
(22:25):
leases is economic to produceand we'll get sort of down the
road.
Here's the key.
At the end of that four-yearwindow we'll have another
election and if the election thepresidential election is a
continuum of the Trump approach,then that spade work begun
(22:46):
during that four-year windowwill start to produce results in
terms of finding prospects andapplying for permits and
beginning to go forward with newprojects.
But you're not going to findpeople putting a huge amount of
money, investing a huge amountof money into those projects
until they know what's going tohappen at the end of that
four-year window is put a bunchof money in in trying to define
(23:13):
and identify a project and startputting your arms around a
project during the four-yeartime period and then at the end
of that come back to a Bidenadministration again and all of
a sudden have all that stuffdenied.
So we'll see outside of Willow,which I think will make some
solid steps toward additionaldevelopment, which I think will
make some solid steps towardadditional development.
(23:35):
I think we'll see somebeginning steps in MPRA, other
parts of MPRA and in ANWR duringthat period.
Ak LNG, one more AK LNG.
You know God love it.
We'd all wish that project togo forward.
But even when you look at thearticle in the ADN today about
(23:56):
the results of their trip to theslope and all of the talk that
they did, those officials didabout the AKLNG project, you see
very little response frompotential customers from Japan
or from Korea or from Taiwan orfrom the Philippines.
Everybody's being careful, allof the potential customers are
(24:16):
being careful.
Until they see hard and fastnumbers on what the project
costs are going to be and whatthe prices are going to be, and
Dunleavy, sullivan and all ofthe federal officials can talk
all they want about how thisproject's going to go forward.
Chris Wright said.
The Secretary of Energy saidwe're going to twin the TAPS
pipeline.
(24:36):
They can talk all they wantabout that, but until we see
hard and fast numbers we're notgoing to see a lot of progress
on that.
Speaker 2 (24:44):
Brad Keithley, alaska's four sustainable
budgets, the weekly top three, Imean.
Overall, though, this was agood visit and it shows that the
Trump administration, I guess,is pretty serious about what's
going on, right.
I mean, that's the kind of thewhole point, that's the, that's
the direction they're going.
Speaker 1 (25:02):
Yeah, I think it shows attention to Alaska, which
certainly the Trumpadministration is giving, and in
Sullivan term you get some ofthe credit for that.
Governor Dunleavy gets some ofthe credit for that.
I think it shows attention toAlaska and I think it shows
incremental steps.
But aside from Willow, which Ithink it does show it is going
to show concrete benefits fromthis, aside from Willow, I think
(25:25):
I think it's all going todepend first of all on what the
perception is about what's goingto happen in four years with
the next election cycle, on whatthe perception is about what's
going to happen in four yearswith the next election cycle,
and secondly about what thenumbers are going to say on
AKLNG and to some degree theTrump administration is working
at cross purposes on AKLNG.
When you look at steel costs,when you look at machine costs
(25:56):
used in the pipeline business,those costs are escalating
rapidly.
It's hard to do economics inthis cycle.
We've got friends down in thepipeline industry in the lower
48, and I'm asking them abouthow they're doing their projects
.
They said we're takingvacations.
We're going to wait until thissettles for a while before we
make big decisions about bigmoney, because we don't know
where the costs are going.
So I think on AKL&G we can talka lot, and they certainly have
(26:18):
talked a lot.
We can encourage potentialmarkets to look at it and
they've certainly done a lot ofthat and they can talk a good
game about how they're going tobe supported.
But until those numbers come in, and until the numbers stick,
until they translate into hardand fast projections, offers of
(26:39):
what the rates are going to befor the, for the pipeline costs,
uh, until those numbers stick,we're not going to see a whole
lot of real progress on that, onthat front.
Speaker 2 (26:47):
Well, and this has been your and my contention for
well ever since we startedtalking about it uh, at least 10
years.
And this was something that Ihad changed my mind on about,
probably close to 15 years ago,because I was very much you know
, gas tomorrow, let's get gastomorrow.
Until I started talking to somefolks much smarter than me and
(27:08):
I said how come we can't get itdone?
And they laid it out and theysaid it's all about the
economics, right, it's all aboutthe.
We've got to get it andsomebody's got to pay for it,
and then they've got to be paidback.
And I started looking at it andrealized until the economics of
this project work out, we cantalk about it all we want, but
it's just pie in the sky untilwe get solid numbers and
(27:29):
somebody who's willing to takethat investment.
Now, if Trump did it as anational security or national
infrastructure project and thegovernment paid for a big chunk
of it, well, maybe it's doable,but if you're looking for
private people to pick up thepieces, I don't know how they
get it done.
Brad, I really don't.
(27:49):
I don't care how many pressconferences you have and how
many people you sign letter ofintent of oh yeah, we'd love to
have your gas, but you knowagain, nobody's going to jump
when it's 30 or 40 percent overmarket value.
Speaker 1 (28:03):
Yeah, exactly right, michael.
And and you know what, what?
What the AKLNG project has doneis has done a good job of sort
of creating a scenario underwhich all this would work.
If they filled the pipelinecompletely, if they had it going
up 365 days a year, ifproducers were willing to sell,
(28:23):
develop and sell gas at a dollar, which is the assumption if
they were willing to do that,then the economics would look
sort of marginally okay.
And they've done a great job, Ithink, of creating that
scenario under which thingsmight be okay, but the
likelihood of that scenariocoming to pass being the actual
(28:44):
scenario that develops isrelatively low.
One other thing that I will adda lot of my friends in the lower
48 say, oh, this is just kabukitheater.
I will add a lot of my friendsin the lower 48 say, oh, this is
just kabuki theater.
What's really going on is Japan, korea, taiwan all of these
people are looking at AKLNG andsaying good things about it and
listening to Trump and lettingTrump talk about it a lot as a
(29:06):
negotiating tool for lowerprices out of the Qataris, who,
gutter, has a huge amount of LNGthat they're marketing, and
other LNG projects throughoutthe world, including LNG
projects on the Gulf Coast, andso what Alaska really is again
from my friends in the lower 48,what Alaska is really being
(29:28):
used for is a stalking horsesaying you know, yes, if all
these numbers came together itmight be an economic project
we're going to, we would tilttoward that project.
If it was otherwise economic,we would tilt for that project
because of the strategicbenefits and sort of just trying
to get gutter to say, okay,well, we'll drop our price
another 50 cents If that's whatit's going to take to get you to
(29:51):
buy from us or Australia or theUS Gulf Coast projects.
My friends in the lower 48 saythat's really the game that's
being played here.
And maybe it is.
And, as I said, aklng has puttogether a scenario under which
maybe it could all fit.
(30:12):
But when the numbers, when thetrue numbers come in, when the
true economics come in and it'stime to lay down real money,
that's the point at which wewill find out whether any of
this works.
Speaker 2 (30:25):
Wow, brad, you're on track, not off the rails.
As usual, brad's been sayingthe same thing this whole time.
You know, why do I even bother?
Why do I even bother?
Look, I'm cautiously optimisticthat maybe, with all this
attitude of development andeverything else, some things
will happen.
Are all the things going tohappen that everybody's talking
about?
Like, do I believe that we'regoing to have an Alaska LNG
(30:46):
project?
I don't think so, but maybesome other things will come out
of it.
I don't know, you know, but Idon't believe that it's the
end-all, be-all that everybody'sback-slapping each other over.
Speaker 1 (30:58):
Yeah Well, again, some of this is the Dan Sullivan
re-election tour and theback-slapping is oh, dan, you
did a great job in getting theseguys to come and getting a
positive attitude and look.
A positive attitude is come andgetting a positive attitude and
look.
A positive attitude is muchbetter than a negative attitude
and in the case as I say in thecase of Willow I think it will
(31:20):
produce some positive results,some additional development that
otherwise isn't going to occur.
Actually, that puts the budget,the state budget, in a weaker
position because of the way oiland gas tax credits work.
It'll extend out the time thatwe actually get revenue out of
these projects, but nonetheless,it's a good thing to have
(31:41):
additional oil and gasdevelopment in the state.
But we can't.
I mean those people who say, ohwell, that's going to solve the
problem, we don't need to worryabout anything else.
That's wrong.
And those people who say, oh,if we get AKL and G, that'll
solve all of our problems.
That's wrong.
A we're not going to get.
It's very unlikely.
We get AKL and G and B.
Look, akl and G is predicatedon a field price for gas of a
(32:06):
dollar or less.
What's the royalty?
There's not a whole lot ofroyalty that gets produced out
of a, out of a, out of a dollarsales price.
So it it's it.
It is.
It is better to have a positiveattitude.
I think it will serve in termsof willow some additional
development.
I think it will position Anwarand some parts of NPRA for
(32:29):
additional development If infour years the nation looks like
it's going to continue downthis road, as opposed to
deviating yet again.
But you know, we've got totemper this back-slapping within
the bounds of reality.
Speaker 2 (32:46):
Right and again the other back.
You know, the backhandedproblem with all the things that
the president's doing isobviously it's driving the cost
of oil down worldwide.
He said he had a goal ofwanting to get oil in the low
fifties was his goal, and we'restruggling at 65.
What happens if he gets it downinto the mid fifties I mean,
(33:08):
it's a you know then it createsa real problem.
Speaker 1 (33:12):
It's a real problem for sure, yeah, we've got a lot
of cross-purposes going.
We've got the desire to get oilprices lower, we've got the
desire for all these tradeissues, trade resolutions that
result in higher import prices,that drive up the price of steel
and drive up the price ofmachinery and other things that
(33:32):
we've developed foreign supplychains for, and we've got the
desire to develop, which relatesto cost, which relates to the
cost going up, so cost going up,revenue is going, price is
going down, so it's um it.
There.
There's a lot of moving partsand a positive attitude about
some of the moving parts is good, uh, but we've got, we've got
(33:54):
to see where all these movingparts land before people start
putting down hard and fast uh,hard and fast commitments to
take gas the weekly top threecontinues with number three.
Speaker 2 (34:09):
Gas weekly top three continues with number three.
And that is, of course, uh,angela rodell.
She only cares about theworking people, she just cares
about the working people.
All right, brad, tell me, tellme all about it.
What do we got here?
Speaker 1 (34:19):
this is.
This is.
This is we could we couldalmost classify this as the
humor segment of the show AngelaRodale, former director,
executive director whatever thehell the title is of the
Permanent Fund Corporation,after she left that job,
somewhat unceremoniously.
(34:39):
After she left that job, shestayed in Juneau.
She stayed active.
She ran for mayor of Juneau inthe last election, lost but ran
for mayor of Juneau and hasbecome active in Juneau politics
.
She wrote an op ed, a my turn,what they call a my turn in the
Juneau empire, the title ofwhich is time for a government
that works for working people.
(35:00):
And what this is built aroundis a three-pronged petition
that's being circulated withAngela's support, to do three
separate things with respect toJuneau.
One is impose a property taxcap.
The Juneau Assembly keepsincreasing the property tax
(35:20):
rates and it would impose a cap.
The second is to exemptgroceries and utilities from a
sales tax.
Juneau currently has a salestax, doesn't exempt groceries
and utilities and the proposalis to have petition, is to have
by petition, to have an electionthat would exempt groceries and
(35:41):
sales tax.
That would exempt groceries andsales tax.
And the third is to restorewhat she refers to as restore
poll-based voting.
Juneau has elections by ballotnow, basically, and it would
restore the obligation to go tothe polls to cast a vote.
So that's what she's promoting.
(36:03):
And here's the paragraph where Istarted chuckling.
The paragraph is this thecurrent system hits working
families the hardest.
She's talking mostly about theproperty tax cap and the
exemption for groceries here.
The current system hits workingfamilies the hardest.
It's regressive, it'sunsustainable and it's driving
(36:24):
people away.
If we want to keep Gino livable, not just for the wealthy but
for teachers, nurses, fishermen,caregivers and retirees, we
need to act now.
So Angela is focusing onworking families and concerned
about a regressive tax systemand concerned about a system
(36:46):
that focuses just on the wealthyand she's trying to undermine
it.
This is the same Angela Rodalewho, maybe a year, maybe two
years ago, in a debate that hadme defending the PFD and Larry
personally saying we need tochange the PFD, had Angela
Riddell as the third personarguing that we ought to
(37:08):
eliminate the PFD and all of themoney ought to go to the state.
And keep in mind that the PFDis one half of what happens with
POMV distributions.
It's the part that goes largelyto middle and lower income
Alaska families.
The other half protects thewealthy and protects all
(37:29):
companies by substituting fortaxes that they would otherwise
pay, and she wanted to eliminatethe PFD and use all of the POMD
draw for this tax protection,tax substitution role that helps
the wealthy and, by using PFDcuts, undermines working Alaska
(37:51):
families, middle and lowerincome Alaska families.
This is the same.
We now have the same AngelaRodale talking about protecting
working families againstregressive taxes.
We have the same person doingthat now, who you know a couple
of years ago, or a year a coupleof years ago, was arguing for
(38:13):
eliminating the PFD entirely.
What's the?
You know, when you look at theevent, sometimes you look at
Venn circles or, and you try tofigure out where the overlap is,
who they're, who they're tryingto protect.
When you look at the Venndiagram of of what happens with
PFD cuts, which she advocates,and you and you look at the Venn
diagram of of what happens withPFD cuts, which she advocates,
and you and you look at the Venndiagram of what happens with,
with, with what she's proposing,with the property tax cap and
(38:35):
the and the sales tax exemptionsand so forth, the, the, the
group that's getting protectedis the wealthy.
The wealthy is going to getprotected by the property tax
cap.
The wealthy is going to getprotected by uh, to some degree,
by by, by groceries and theexemptions for groceries, and uh
, uh and and utilities.
(38:56):
Um, so what's really going onis the working families that
Angela is really interested in,really interested in protecting
her, the wealthy families thatAngela is really interested in,
really interested in protectingher, the wealthy families?
She's couching it like ZachFields does and Elise Galvin and
a number of others at thelegislature.
She's couching PFD, or she'scouching her proposal at the
(39:20):
Juneau level.
She's couching it as oh, we'regoing to look out for working
Alaska families.
That's what Zach Fields andElise Galvin and the others do
at the legislature.
They say, oh, PFD cuts are toprotect working Alaska families.
We're going to take that moneyand we're going to spend it so
much better to protect workingAlaska families than they can
(39:40):
themselves.
So it's a tool, it's a device.
Saying you're trying to protectworking Alaska families is a
device.
To try to sell a product, Inthe case of Zach Fields and
Elise Galvin, is to sell PFDcuts.
In the case of Angela, it's tosell property tax caps.
Sort of funny to see thejuxtaposition of what she's
(40:10):
saying now compared to what shesaid, uh, just a year or a
couple years ago.
Right, uh, about pfds.
It's not about working alaskafamilies.
Speaker 2 (40:14):
There's something else going on here and and I
can't, I I pulled the article upthis morning and read it real
quickly and then I just wentback to it and, of course, the
paywall at the juno empire, justyou know now I can't read it,
but but there was a, there was a, there was a paragraph there
where she talked about againtalking about working class
families and how the people aredisconnected now from their
(40:35):
government because they're not.
I mean, it's like she's takingsome of the greatest hits from
people like Ben Carpenter andthings like that and she's
twisting it to her, she's makingherself sound so reasonable and
so all these other things, whenyou know she's a big government
gal.
That's what she does.
She's all about.
She doesn't care about theworking people.
It's a, it's a, you know it's.
(40:57):
It's again like you said, she'sselling the product.
But you can see how they cherrypick some of this verbiage and
they use it and twist it totheir own, to their own ends
yeah, and, and you know, and soit's a well-worn path.
Speaker 1 (41:10):
Because when you look at the legislature, when you
look at zach fields, when youlook at andy joseph, so when you
look at elise galvin, when yougo down the line on the on the
uh, on the on the house majorityand, to some degree, some
members of the house minority,when you go down the line, it's
all, it's that verbiage.
It's we're protecting you,we're protecting you with child
(41:30):
care credits, we're protectingyou with spending on this and
that government program.
We're working on your behalf.
It's at the same time they'redoing that, they're saying
they're protecting you.
At the same time, they'retaking money out of your pocket,
out of middle and lower incomeAlaska families, through PFD
cuts, and they're taking moremoney out through PFD cuts than
(41:55):
it would cost, than the benefitsthat they're redistributing.
So it is never buy into thewords, just like Angela, and
never, never buy into the wordsjust like Angela.
Don't buy into the words thatshe's saying.
Understand the economic impactof what's going on with their
(42:16):
proposal and the economic impactthat she's, the totality of the
economic impact that she talksabout, both at the local level
and at the state level, is notpro-working Alaska family.
It's pro-wealthy and thetotality of what Zach Fields and
Elyse Galvin and Andy Josephsontalk about at the state level
is not pro-working Alaska family.
(42:38):
It's pro because of the waythat they're using the POMV draw
to protect against taxes.
It's pro all companies, protoptop 20%, pro-non-residents.
That's the economic effect ofwhat they're arguing.
And Angela's?
I just had to chuckle as I wasworking through this op-ed
(43:02):
because it's just a bunch ofwords.
It's, you know, whole testedwords.
This gives the response youwant.
Just throw them out there.
Have some sort of idea abouthow that sort of relates, but
throw them out there and then dowhatever you want in terms of,
in terms of the actual proposal.
Speaker 2 (43:21):
Right, no, and and again.
This is just again anothersnapshot of the mindset that's
in Juno, right now.
For what's going on?
Like you said, Galvin Fields,these kind of people who are
taking these things and twistingthem to the point to where
you're saying you know you needus.
This is why we're here toprotect you from you.
(43:42):
Essentially I mean, that'sessentially what the whole
fallacy is is that we knowbetter than you how these money
should be spent, and so let usdo that.
And if we put put it under theguise of protecting the working
class, well, that just soundssexy, right?
I mean, that's really what itall comes down to.
It's all about how is itpackaged at this point?
Speaker 1 (44:05):
Yeah, exactly Right, we.
I did some numbers, I did somecalculations over the weekend, I
used my weekend for that, andwe have like a billion $500
million that's been transferred.
With these PFD cuts, the PFDcuts that the legislature just
enacted We've had a billion $500million about a billion and a
half that's been transferred outof the pockets of middle and
(44:27):
lower income Alaska families andis being transferred to being a
tax shelter for the top 20%,the old companies and
non-residents.
But they say they're doing it.
They say they're doing it forthe benefit of working Alaska
families, but we've had $1.
Half dollars taken out of theirpockets to fund the additional
(44:50):
tax shelters.
But the words, when you look attheir words, oh, we're just
doing it to protect you,Government's here to protect you
and we're taking your money.
We're taking money out of yourpocket and sort of sprinkling
some of it back on some of youto protect you.
Same way with Angela we'retaking money out of your pocket
(45:12):
and we're sprinkling some of itback to protect you.
Speaker 2 (45:15):
Boy Kyle comes into the chat room like a bomb and
tries to tell everybody andapparently he missed the whole
part at the beginning where wetalked about how the governor is
responsible for what's going onwith the Permanent Fund fund
board.
But what we were talking aboutwith the legislature is their
fascination with combining thecorpus of the fund and the era
and how that is wrong.
(45:35):
But he's telling us how wrongwe are.
Um, so I, you know, I, I, kyle,you can't just pop into the
room, read one comment and gooff without context oh yeah,
kyle can well, that's easy forhim to do.
He can, he can, but it's not theright thing to do.
Is what I'm saying?
I guess you know, uh, and thenget heated when somebody tells
(45:58):
him to, uh, to, to, you know,pound sand or whatever, but
anyway, um, I mean, this is,this is the, this is the
reaction of what's going on.
The problem is they're all toblame, right, they're all to
blame.
The legislature is to blame,the governor is to blame, the
historically past legislaturesare to blame, the Republicans
are to blame, the Democrats areto blame.
(46:20):
Everybody has got a fair shareof blame on what's going on
right now, even the electoratefor putting these numbskulls
back in office over and over andover again.
Speaker 1 (46:35):
But yeah, it's a problem, right?
I mean this is an overallproblem.
It is, and it starts with theperception that the legislature
knows better than the citizens.
The legislature knows betterhow to use citizens' money than
the citizens do, and so thelegislature can take money out
of the pockets of middle andlower income Alaska families
huge, you know, a billion and ahalf out of the pockets of
(46:56):
middle and lower income Alaskafamilies and redirect it over to
their chosen uses of the moneybecause they know better.
But the problem is they don't.
The problem is, while it maybenefit a few, why a few may get
more benefits out ofredirecting that money than they
(47:20):
would have had they got themoney in their pockets.
It's taking money out of allmiddle and lower income Alaska
families.
It's taking money out of allmiddle and lower income Alaska
families, is taking money out ofall of the economy that's
driven by middle and lowerincome Alaska families in order
to redirect it to a few.
So, yeah, when the Republicansthink they can do that, when the
Democrats think they can dothat, when voters think they
(47:41):
want to elect people who do thatit causes a problem because we
are redistributing money thatotherwise, by statute, is
supposed to go to the pockets ofmiddle and lower income Alaska
families and the legislature isredirecting it into the pockets
of a select few, and that'sgoing to be a problem.
Speaker 2 (47:58):
Yeah, no, it is.
And, of course, the more theytalk about this, the more
anxious I get.
The more they talk aboutcombining the corpus of the fund
and the ERA, the more anxious Iget.
The more they talk aboutcombining the corpus of the fund
and the ERA, the more anxious Iget, because most people, most
Alaskans, don't understand howit works.
They don't understand themechanisms for how all these
things work, and so they justbelieve what they're told in the
(48:21):
news media, because the newsmedia is not digging deeper into
it, not giving you the problemsor the foibles or the pitfalls
of it, and they just go oh, ok,you have to do this to save us.
Ok, go ahead.
You know, and you know it'sbecause it's complicated and
most people are just not payingattention and the news media is
not doing their job in digginginto this and saying, ok, why,
(48:43):
why would what?
Ok, so you want to do this?
What are the downsides?
Saying, okay, why, why wouldwhat?
Okay, so you want to do this?
What are the downsides, whatare the pitfalls, what are the
problems?
Oh well, nowhere, because thisis how all sovereign wealth
funds work.
No, no, that's not what we're.
No, that's not what's going on,but you know, this is this, is
this thing.
This is what really makes menervous about the future of
Alaska is, if we get to thispoint, to where they're able to
(49:03):
slap these things togetherwithout any kind of real
resistance, where does it gofrom there?
Speaker 1 (49:08):
Yeah and we don't have.
I mean, people don't back upand step back and say, okay, why
do we need to combine these twoaccounts, the earnings reserve?
I got to say Joe Pasquan,former Senator from Fairbanks,
who I disagree with on a lot ofstuff.
Pasquan's got this right.
Pasquan has backed up and hesaid, okay, let me understand
this.
The earnings reserve is beingdrained, so we need to do
(49:32):
something to protect, to allow,to ensure that we continue to
get money out of the POMV or outof the permanent fund, but the
earnings reserve is beingdrained.
We aren't earning enough moneyto keep the earnings reserve
whole.
There's a problem there and theproblem is, of course.
The problem is, of course, thepermanent fund corporation isn't
generating enough earnings well, shouldn't that be a red flag
(49:53):
to begin with?
Speaker 2 (49:53):
shouldn't we either, you know, stop, we're not
earning enough to draw from hereto make, so shouldn't we stop
drawing at that point, or find away to earn more?
You know, I mean one of thosetwo things, that's the you know,
and the fact that they theypurposely have done this by
transferring $8 billion into thecorpus of the fund over the
last five years.
So, you know, for futureinflation proofing, right, for
(50:16):
future inflation proofing, uh.
And now they're like oh, now wedon't know what to do.
I mean, no, now, what do we do?
Now?
You know, um, and it's a crisisof their own making.
It's exactly what they, it'sexactly what they wanted to do,
which is a little spooky at thispoint for sure.
Speaker 1 (50:33):
Yeah, but Pascavan's got it right.
But but Pascavan's one of thefew I mean Joe, joe's asking the
right questions.
But if you read the media, ifyou read Sean, if you read the
ADN, or you read the AlaskaBeacon, or you read, you know,
the Fairbanks News Minor, or youread any of them, they're all
(50:53):
going oh yeah, well, there's aproblem, the earnings reserves.
So let's just, let's justcombine the two, that'll do it.
It does it only because youthen set up an opportunity to
drain the corpus.
Yeah, think, think, think aboutwhat the consequences are.
But we don't have that.
Speaker 2 (51:12):
No, it's some crazy stuff, but you know, don't worry
, angela will save us.
She's here to fight for us.
She's here to fight for us forsure, yeah, yeah, for the
working man and woman.
Speaker 1 (51:26):
She's here to protect us from arsenal it's almost
michael, as if they walk intotheir pr consultants and they
say, okay, what?
What phrases poll test the best?
Forget what I'm proposing.
Just tell me what phrases polltest the best and I'll use those
.
Yeah, and I'll, and.
And then I'll do what I wantbehind the scenes.
But I'll use those phrases, um,and claim and claim that that's
(51:47):
what I want behind the scenes.
But I'll use those phrases andclaim that that's what I'm doing
.
I'm protecting Alaskans.
I'm looking out for workingAlaska families.
Speaker 2 (51:55):
All right, Brad Well, thank you so much for coming on
board.
We will talk with you againsoon, okay, Michael?
Thanks for having me.
Speaker 1 (52:02):
Well, that's a wrap for another week's edition of
the Weekly Top Three fromAlaskans for Sustainable Budgets
.
Thank you again for joining us.
Remember that you can find pastepisodes on our YouTube,
soundcloud, spotify and Substackpages, and keep track of us
during the week on Facebook andTwitter.
This has been Brad Keithley,managing Director of Alaskans
(52:23):
for Sustainable Budgets.
We look forward to you joiningus again next week on the Weekly
Top Three.
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