When I was younger I lived in Alaska. Yes, I loved it. I worked on oil rigs on the North Slope, 300 miles north of the Arctic Circle. This was in the 1980’s.
In the late 80’s the oil industry collapsed. OPEC opened their valves and the price of oil dropped from $40-$45 per barrel down to below $15 per barrel. The market no longer supported the cost of producing oil in the U.S. The national rig count went from nearly 5000 rigs in operation to about than 500. Nationwide nearly a million jobs were lost as the effect of the loss of oil industry jobs trickled through communities like Anchorage, Houston, and other oil dependent communities.
Housing prices in oil dependent communities plummeted. I lived on a street which ended in a cul-de-sac. There were 22 houses on this street. When I left the state, because of a layoff, there were 16 houses for sale on this cul-de-sac and at least half of those had been empty for over a year. Unemployment in these areas went well into double digits. My house, which I had lived in for about 3 years, sold for about half of what I paid for it.
Oil related companies fell like dominos. The company I worked for had its stock price drop from over $40 to less the $1, before it was finally absorbed by another company. Everyone that I knew personally in the company, except one, lost their job.
Guess what? All of us found other jobs and did quite well. We had to move our families. We started new jobs in businesses in which we had no experience. Some of us went to school. Yes it was difficult. However, none of us burdened you with supporting us or our families.
As far as I can recall, there was not one politician that suggested that the oil industry was too big, and that we were too dependent upon it, to let it fail. Certainly it was big, and no doubt we were dependent upon it, but no one suggested spending taxpayer dollars to bail it out. We simply let the market sort through the debris and salvage what it could.
We didn’t run up our national debt to bail the oil companies out. The president didn’t fire the executives of these businesses, nor did he complain about their bonuses. Back then, no one ever considered that to be the role of government. Then again, maybe if the oil workers had belonged to a politically influential union, things might have been different.
In the end, the country had one of the most prosperous decades in the history of the country.
Free markets work!
Subscribe to:
Post Comments (Atom)
Why do you call yourself Hoosier Patriot, then? You clearly have no allegiance to any particular state and appear to see people as material to flow from state to state like capital.
ReplyDeleteHow this story has much relevance to problems of global scope as opposed to a single industry is left as an exercise to the reader, I guess. If we don't like it, there are other planets. OK Heinlein, I'm gonna hop in my rocket then.