May 17, 2006
Wednesday

Between 1942 and 1945 the United States sent some 16 million men and several hundred thousand women overseas for the purpose of defeating two fascist entities in Europe and an imperialist autocracy in the Pacific. Fascism was a cancer infecting the body of what is known as Western civilization, and it was destroyed by the Western democracies who to eradicate it resorted to the use of the most extreme ultra-violence in the history of the world. Communism in the Soviet Union and Red China (a term rarely used anymore) was never accorded the concern tended to fascism. To begin with these are member states of different civilizations; they are rationalists; and containment as policy created a tenuous, but workable world order. In the course of incurring 400,000 U.S. military fatalities in combination with our allies we killed every European fascist we could get our hands on. Those we did not kill we humiliated and terrified to a point beyond anything imaginable prior to the event; and then as Kurt Vonnegut and many others have noted we imported fascism home.

Home-grown fascists really suck. They are people who hate free enterprise, hate competition, and despise all those hard-working schmucks out there trying to make a buck the old-fashioned way by working for it. Fascists are extreme right wingers who believe that government can do it better, that government should own heavy industry, should indeed own most, if not all of the major means of production in a community or in a society.

Bureaucrats are not by definition fascists, though it is certainly possible, if not probable, that many of them hold or share such beliefs; but most bureaucrats remain affected by that fundamental insecurity associated with all bureaucratic activity and, hence, themselves, and are thus not likely ever to be the fount from which such drivel flows. Like sheep they follow, however, for a fascist empowers bureaucracy, gives meaning to the bureaucrat, and actually thereby enhances that self-importance so essential to bureaucratic function.

Toynbee was not the first to see it, but his commentary on the subject of contemporary and historical bureaucracy is deserving of more than simple note; that when the true talent of a society opts for bureaucratic security instead of entrepreneurial risk the civilization of which such is part is already in permanent and irreparable decline. Free enterprise is what brought people to Alaska originally, but as the resources were tapped or capped Alaskans turned their backs on America, on capitalism, on free enterprise, and on their own innate abilities to deal with a problem firsthand. In Ketchikan we hate free enterprise, at least in official circles. Never forget the words of Karl Amylon, "Government can do it better (than the private sector)."

There is not much free enterprise left in Ketchikan, that's for sure. Oh, we have this imported industry, the tourist industry, and at the retail level there is a bit of cutthroat competition, but then we have the shipyard, the veneer plant (maybe??), the new dock, the IFA ferry, the Seley log mill, and oh yes, our current topic, the Aquarium of Dead Fish. None of these entities are businesses; they are massively subsidized government operations.

I am sure you will all be pleased to hear that the "wooden bowl scam" had at least a couple positive results. You remember that one, do you not? Our $300,000 went to pay off former state Senator Arliss Sturgulewski and associates for a previous bad investment, $299,000 of our money going to that cause. Apparently, there are thousands of these rough-cut wooden bowls wandering around town finding good use as pre-cut wood for fireplaces and wood stoves; been keeping some locals warm this past winter while saving a few bucks maybe. Along with the $500,000 from USDA that this bunch burned up we pretty much could have kept everyone in town warm this winter for next to nothing, but at least those rough-cut bowls are keeping a few folks warm. One of these rough-cut wooden bowls has been sequestered by my two-year old grandniece and has been converted to a cradle for her favorite doll. (Don't touch that cradle!) Young Mia does not realize how expensive that doll's cradle of hers actually is.

Gateway Forest Products you will recall was going to bring us "Jobs, jobs, jobs." What instead it brought us was waste and corruption, a whole lot of legitimate bad feelings and new animosities, and an embarrassment this community may never live down. The sole positive of this misery was that it highlighted the true purpose that all of these people have who are getting involved in these government-financed projects. Before ever making a dime in profit all of these people consider themselves entitled to a six-figure salary at government expense, at our expense. Then they price us out of the neighborhood and even out of the grocery store. They who have never once experienced the fear that maybe, just maybe some new customer won't come through that door, that maybe today you or I don't eat because of that fact, they think they are better than you and I; that they are entitled before ever producing a single dollar's profit to a six-figure salary paid in government dollars. This power is then used to run your chamber of commerce, local politics, and the price of everything. Rather than being led by the best among you, by the most creative, the most productive, you have institutionalized leadership by the worst. We can now at least identify how it is being accomplished.

For this cycle another 33.5 million government dollars has been allocated to this shipyard, this losing piece of white elephant junk that makes most of its money fixing government property. There is plenty of room for six-figure salaries for the losers at the shipyard in 33.5 million government dollars. Clearly there is no major reason for those folks to be concerned about profitability any time soon. It is not a condition of their survival or of the survival of the government entity they so pretentiously call a business. They don't have a clue what free enterprise really is beyond the fact it is something they are doing everything they can to intentionally avoid. They are too good for it.

I will bet anybody out there and despite all the ballyhoo to the contrary that the first time the IFA ferry hits a shipyard for a major refit that particular government entity will be bankrupt. Good talkers that they are, the folks who put together this particular personalized retirement plan will probably have secured additional millions in government funding to extend their product life cycle, but that extension will be bought with your dollars, not their profits. It is strange that we think certain people are so high and mighty when they can't even stand up without a massive handout from government; stranger still when they don't even have to make any money for anybody.

At least for the $38.4 million for the new dock folks got to vote on it. From the standpoint of local financing it was a form of mass suicide in which our city government sold its community down the river for the sake of the sales tax from the tourist industry. What appears to have been completely missed by everyone as they extolled the virtues of all this tourist money paying for this improvement is that now you local schmucks have to pay for everything else. This tourist industry just pays for itself, and you all bit off on that con. "Fear is the mind killer." Truly amazing.

Then there's these "South End Triplets" and $43 million for this Aquarium of Dead Fish. (That's what they said, folks. On display for the tourists will be stuffed fish and bureaucrats working behind large panes of glass, certainly a unique tourist ride.) As I said previously, the fix is in big time on this thing, and it definitely crosses party lines.

Now no one's getting to vote on this thing. Last summer indeed the "triplets" specifically indicated they were doing everything possible to prevent the voters having any say in this project at all. To date they have been quite effective in this respect, having secured $2 million in government funds for this cycle, the support of the newspaper, and the support of local government. It was a "priority" on the wish list to the state. What the hell is this abomination ten miles south of town, this $43 million Aquarium of Dead Fish?

"Abomination" is an accurate term to describe the nature of this thing as it has been presented to date. (Most definitely the sales pitch will soon be revised.) This proposed project is some kind of mutated hybrid that so far as I can tell is lacking a soul. It is generally presented to us a tourist ride, something we build that provides "jobs, jobs, jobs," once again all at tourist expense. It is also suggested that it is a science or fisheries lab. It is an educational institute. It is a business. It is a hatchery. It is a mariculture establishment. For the moment "abomination" will do.

Most frequently to date this thing has been hyped as a carnival ride for the tourists, and the tourists in their turn will contribute the necessary $3 million that will fund the massive aquarium bureaucracy, who in their turn I suppose will be tasked with enhancing the local fisheries and otherwise making squillions for the local economy with their other forms of magic.

Why is the government financing a $43 million tourist ride? The triplets tell part of the story: John Sund, Gary Freitag, Len Laurence, strange bedfellows; politics, bureaucracy, and promotion. John Sund's a lawyer, Gary a fisheries biologist and lifelong bureaucrat. Len Laurence is a self-promoter who has been around here for 40 years. Sund is a Democrat, Len a rock-hard Republican, so from the get-go this thing is designed to grease the political skids. There is no substantive business experience here, certainly not in relation to a project of this size. It shows. The politics of this thing is all rosy, the business presentation nonsense.

Are there any other tourist rides in town that cost $43 million? Any inventories at any one time in any of these tourist shops that total $43 million? I doubt it seriously. But the "south-end triplets" and whoever or whatever they otherwise might represent have been doing a pretty good job of convincing a whole lot of folks about what a great idea this is. Mayor Bob Weinstein, another lifelong bureaucrat, in the library parking lot Friday chided me and warned me off criticizing this project. This thing is already an obsessive fixation locally among the powers that be. But why should that surprise us? They all hang out together, have as example at the chamber of commerce, etc. all these other non-businessmen who have shown the way. What is the new "Ketchikan business paradigm?" "Profit is neither the intent nor the purpose of a so-called local 'business' entity. Pay yourself a very large salary, lie, and get government to pay for it all." (I apologize for the use of the term 'businessmen.' I do not intend to be sexist. So to be specific to date the vast majority, if not all, of the local beneficiaries of these very personalized retirement plans are white men who claim to be 'businessmen.' That is intended to highlight the racist aspect of these personalized retirement plans.)

I am surprised that the other tourist businesses have not been adamantly opposed to this proposed Aquarium of Dead Fish, for this tourist ride intends to siphon off a substantial portion of the tourist trade for the purpose of supporting a government-subsidized entity. Some of them, of course, are blind to anything beyond a 20-foot section of sidewalk, but just as likely is the evaluation that the Aquarium of Dead Fish is really not that much of a threat to their financial interests, it is going to bomb that bad. That is probably an accurate assessment.

Let's run some real numbers. For $2 million you can buy yourself as fancy a report as you want using computer 'pro forma' presentations, etc. to try to convince the naïve or the unsophisticated that speculation using a computer program is something more than speculation instead of just a guess. What we have been told is that the triplets intend their project to provide $3 million in salaries. At $43 million the annual depreciation reserve needs to be a bit under $1.1 million per annum, assuming a 40-year term on the building, (I know it's not likely that an aquarium and all that water would ever develop a mold problem, would never need $6.5 million or more in new roofing and for new windows to be installed. Not in 40 years.) All those pipes and plumbing, water tanks, power costs, stuffed fish, the annual overhead for a $43 million operation (whatever the heck it is) has to be considerable. So, what? Three million dollars for salaries, another $3 million to cover the rest?

Let's just deal with the salaries. In the first instance, in order to pay $3 million in salaries from revenues an operation needs to earn at least $3 million in revenues. (Actually, it needs to earn a lot more, but these guys are not businessmen, so they don't have to worry about that.) What seems so simple is in fact so complicated. First problem: The Aquarium of Dead Fish is (will be) ten miles south of town (or is it more?), meaning a bus ride one-way of 30 minutes minimum or a boat ride of longer duration than that. This is more than a major problem; this is a project unto itself. An hour-long ride requires content, thus some kind of tour has to be created out of the ride itself. That costs money. A boat ride is, therefore, 'a priori,' impractical, leaving the bus. The last time I priced bus rides and for a distance much shorter than that, the price was just under $10. I think it will cost more than that, but let's assume for our model that the cost of the bus ride is $10. That's a sunk cost, the aquarium makes nothing on this. So to make $10 a head the aquarium will need to charge a $20 ticket price plus the commission on the ticket, and the commission will not be less than $5. So for a $25 ticket price and barring any other interim costs, the aquarium would make $10; and if the aquarium sold 300,000 such tickets, it could pay $3 million in salaries and payroll taxes.

What that means is at $25 per head and with an average of 800,000 tourists per annum, 37.5% of all the tourists that land are expected to be carted off ten miles south of town for the better part of the duration of their stay in town. Now I think that's total blather to begin with, an absolutely unattainable number of customers relative to the total customer base. If it is even close to being possible, every tourist operator and tourist shop in this town ought be going nuts in their opposition to this thing.

At $35 a head 150,000 customers are necessary to cover $3 million in salary, 18.75% of the total market of tourists. By charging $45 a head we need only attract 12.5% of all available tourists to finance these $3 million in salaries. Unfortunately, there is always an inverse relation to demand as price increases, and while that function is not known at this time for this case, I find it dubious to believe that a price of $35 to $45 a head will attract that substantial a customer base. To the extent it does government money has created a giant tourist ride but at a cost incredibly disproportionate to anything the private sector would reasonably consider; and the specified intent of this tourist ride is to take from the private sector as much money as it can to pay for this abomination.

To load a bus takes 15 to 20 minutes. To move 10 miles on south Tongass with a bus is going to take 30 minutes under the best of circumstances. That is a minimum of 90 minutes and for all practical purposes it is two hours. Another hour for the tour and some messing around on the edges, and you have a three-and-a-half hour event, four hours or more for old folks moving from point to point. There's not much time left for them to take other tours or to shop, so what the government is in fact proposing is a mutually exclusive event where they take your market to pay for their bad news.

So Mayor Weinstein, when I retort to your cautionary by saying, "What's right about this project?" do understand I have thought very clearly about what is being proposed with this silly project. If by some off-the-wall chance the tourists actually did pay for the overhead of this abomination, it would be at the direct, immediate, and unrecoverable cost of the private sector, i.e. all those tourist rides and shops downtown competing with each other trying to make a buck. If as I am certain, your idea that the tourists will pay for this thing is harebrained, then who is going to get stuck with the bill? I assume once again that will be the poor schmucks who have tried to live here all of these years, right? You want to sell me on something, sir, get your numbers straight. In this case they do not begin to add up.

Nor do I need to talk to the triplets. The triplets need to address this community and give all of us some idea what they are really up to here. Right now this thing is a joke, and it is those three who have presented it that way.

So, you got $2 million from the state, and you are planning on getting at least $41 million more. Apparently, the private sector is not interested in investing in this project to any great extent, and by your own admission you want to absorb this government money for your project without any voter say-so at all. Sounds like another personalized retirement plan at government expense to me. How about answering a few questions that you yourselves have not posed.

What is this thing you want to spend $43 million on? Is it an aquarium? A hatchery? A laboratory? A mariculture facility? An educational institute? What the hell is it supposed to be?

Is this a corporation, a partnership, an LLC? Is this a non-profit or government entity?

What kind of salaries or fees are you receiving yourselves? You haven't even built a building yet, and you have $2 million of government money. How much do you intend to pay yourselves? Are you working for yourselves? Are you the numero unos in this operation, or are you fronting for someone else? If so, who you are fronting for?

How do you justify taking $43 million of government funds and creating a tourist ride that to pay for the in-house salaries will require removing from the tourist industry market 20% to 40% of all of the tourists arriving in town? (How in fact do you begin to assert that is even possible, let alone desirable?) Or to pay for salaries and annual overhead would require no less than 40% of the available tourists in the tourist market, and at $25 a head would require no fewer than 75% of all of the available tourists in the tourist market?

The financial shortfalls on this project are inevitable and will be substantial if you actually operate the way you propose to operate. Who is going to pay for several million dollars a year in salaries and annual overhead? Who do you plan to stick with the bill? While this business operates, how much of that $3 million in salaries will end up in your bank accounts annually? Why do you think you are entitled to that without making any profit? Special rules for special people?

A butcher, a baker, a candlestick maker, not the bunch I'd trust to pilot the airplane, the boat, or the train on which I'd want to ride. A lawyer, a bureaucrat, and a self-promoter do not cook up a better stew. And we haven't even gotten around to talking about all the problems of driving down south Tongass with a tourist bus, all those strollers and babies and dogs and cats, 300,000 tourists in buses roaring through your tranquil neighborhood so the triplets and whomever can siphon off all the business from the tourist industry. There's no road there now in a lot of places; the buses will in short order make rubble of the rest. What the hell.

This project is not wrong, folks; it is way wrong. You are either lying, deceiving yourselves, or you are trying to steal from all those hard-working folks downtown who have put so much effort into their programs and shops, all of it with private sector money. You want to take $43 million of government money, and use it to take that away from them. Is this the Chosen 50's way of getting rid of all those folks from India, Pakistan, and other places, to reduce the number of jewelry stores and curio stores in downtown Tijuana, er, I mean Ketchikan?

Projects crafted behind closed doors, answers by those posing the questions, invariably lead to a form of miscegenation, in this instance the abomination that is an aquarium that really does not know what it is. As proposed it's a disaster.

Or in the words of the great Tsao Tsu, "Investing $43 million without knowing what pig is wallowing at the trough is really, really stupid." Stay tuned.

David G. Hanger
Ketchikan, AK - USA

About: David G. Hanger is a long time resident of Ketchikan and a local business owner.

 

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