Trump is undermining Alaska's economy by removing one leg of a three-legged stool

Yahoo

13-03-2025

The east entrance of the James M. Fitzgerald United States Courthouse and Federal Building is seen on July 8, 2024. (Photo by Yereth Rosen/Alaska Beacon)
For decades, Alaska's economy has been described as a three-legged stool. As explained by economist Scott Goldsmith, one leg is the oil and gas sector, another leg is the federal government — which includes federal spending — and the third leg is all other basic sectors like commercial fishing and tourism. This analogy of the three-legged stool is commonly used by the oil and gas sector to secure their importance to Alaska. The guiding rule is that Alaska's overall economy, represented by the stool, collapses if any one of these three legs falters.
According to newspaper accounts, the Trump administration has frozen $750 million in resource development projects. Also, up to 1,400 Alaskan jobs are now threatened or terminated by Elon Musk's indiscriminate layoffs. And now slashing Medicaid is being proposed.
This combined economic affront to Alaska was recently highlighted by Senator President Gary Stevens, R-Kodiak, and Speaker Bryce Edgmon, I-Dillingham, in a letter to Alaska's congressional delegation. According to these legislative leaders, Alaska could experience a loss of $2 billion in federal funds if Medicaid and the Children's Health Insurance Program are threatened as proposed in the budget resolution just passed by the House of Representatives under President Trump's direction. Stevens and Edgmon write, 'absorbing a $2 billion plus reduction in the return of federal funds to our state is not an option. It is a direct threat to Alaska's future, plain and simple.' After touching upon Alaska's fiscal situation and how federal resources play a critical role in Alaska, leaders Stevens and Edgmon closed their letter with this statement – 'It is our duty to inform you that the legislature cannot fix the financial havoc that is being wreaked on Alaskans by the federal government.'
These are words that all Alaskans need to take to heart. If all these layoffs, cuts and freezes are left unchecked, Donald Trump and Elon Musk will essentially be taking a chainsaw to the federal leg of our stool; risking a collapse of our economy. And let's not forget this leg of the stool was once made exceptionally strong by former U.S. Sen. Ted Stevens.
To the majority of Alaskans who voted for Donald Trump, I say don't let the distant lure of Arctic National Wildlife Refuge oil or the liquefied natural gas pipeline project blindside you from seeing how Alaska's economy is being seriously threatened by the Trump administration. These projects are at least a decade away and highly speculative. For instance, Japan has only agreed to look into the Alaska LNG project, not invest it in. And let's not forget no major oil company stepped up to bid on ANWR under the first Trump administration. These types of megaprojects in the distant future will not offset the economic harm now being unleashed, nor does reinstating old-growth logging in the Tongass or permitting the Ambler Road. None of the provisions under Trump's Alaska executive order will offset the potential harm of collapsing our federal leg.
This is an economic reality that I hope Trump voters will come to realize.
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