JOBS, JOBS, AND MORE JOBS

In the world of Estate Planning nothing has changed from the beginning of the year. The Trust and Estates section of the State Bar is putting on a seminar in April entitled, “Estate Planning Opportunities in a World of Transfer Tax Chaos.” There has been not so much as a whimper of debate as far as correcting the problem of repealing the repeal of Estate Tax since the Senate excused itself for Christmas last year.

Of course the focus of our Congress, in case you haven’t heard, has been healthcare. Since that doesn’t really go into effect until 2014 and since the L.A. Times reported over the weekend that “State voters largely back health law,” that has left some time to discuss the debate over jobs, jobs and more jobs. I am in favor of anybody that promotes jobs for every person that wants to work.

When President Obama announced opening up the coastline for oil drilling, with the exception of the West Coast of course, but most particularly in the Chukchi Sea and Beaufort Sea above the North Slope of Alaska I recognized an opportunity for any man or woman not to just get a job, but to get rich doing that job.

Above the North Slope it is the coldest of the cold. It is dark nine months out of the year and the sun never reaches above the horizon during the summer. For those readers that were of working age in 1974, they may recall, or worked on, the oil and gas pipeline that stretched 3,000 miles from the top of Alaska, through the Yukon to the Midwest of America. It was a tremendous undertaking, but it worked, and about 200,000 members of the teamsters, laborers, carpenters, steel workers, chambermaids, cooks, welders and many others that had been making $10,000 to $12,000 a years, were suddenly making over $100,000 a year.

There were at least 100,000 employees working at all times on that pipeline and another 100,000 to replace those doing one month on and one month off. But there is so much money in oil that not only do the Native Eskimos and Indians still receive the lion’s share of the yearly stipend, but every citizen of Alaska receives as much as $6,000 each year, and there are no State taxes.

Strangely enough, although I had graduated from college and was working in the logging industry in Southeast Alaska in 1974, the Pipeline was hiring anyone with an arm and a leg to make this kind of money, and feast on steak and lobster after their shift. By the time I arrived in Anchorage in November of 1975, I went to the teamster’s call twice a day for eight months and never got called to work. They had already hired too many with seniority over me.

So it was back to a lousy $7.10 an hour, the best you could get anywhere else in America in 1976 for risking your life as a “rigging slinger” on Prince of Wales Island. But this was not for long. I realized on any given day Anchorage was filled with men and women with more money than they ever thought they would have, and most of them wanted more of it.

To fulfill this need emerged the entrepreneurs that built syndicates from workers’ funds to buy large parcels of land – deals from the top of the Captain Cook Hotel to any one of many strip clubs. These parcels appreciated at an astronomical rate as though there was no land left in this boom town. The parcels were subdivided and sold into lots creating more jobs for people building houses and strip malls with yarn and fingernail shops.

What appeared unforeseeable at the time was that Alaska is not a very hospitable place to live during the eight months of winter. Therefore, when the pipeline was completed in 1979, there was a full scale exodus from the State, leaving all those new homes to crack and whither in the freezing weather. The only people making money were in the U-Haul business. Many very big names went bankrupt depending on what they were left owning.

Then something happened it seems hard to imagine. It was the decision of the banks holding those mortgages, to plow through new subdivisions, destroying a thousand new homes in their wake. The purpose was to bring a bottom to the decline in the value of existing homes which had declined over 60%.

Anyone looking for an island subdivision in Kenai, Alaska? Please go to www.IslandAlaska.com.