In the pages of Douglas Adams’ “Hitchiker’s Guide to the Galaxy” is a description of the fictional electronic encyclopedia that gives the book its name. The description praises the encyclopedia for its price and because “it has the words DON’T PANIC inscribed in large friendly letters on its cover.”
More than once in the past week, we’ve thought about that message.
The last weeks of the year always bring stress. We have to buy gifts for friends and family. Family is coming — we have to clean the house. The kids are out of school — we have to find something for them to do. We work harder than ever, because we know the end of the year is coming, and we need to make ends meet.
The skies are dark — the sun sets behind Douglas Island at 1:30 p.m. (when the sun is visible at all). There’s scarcely a skim of snow on the ground to brighten the scene.
We’re worried about our jobs, about what the next year will bring. Last week, we learned falling oil prices mean the state will earn about half as much as it expected in July. That means the state will cut jobs. Many of those jobs will be here in Juneau. Many of our friends and neighbors may be forced to leave town in search of employment elsewhere.
If they leave, our town suffers: Fewer customers in local businesses, fewer volunteers at local nonprofits, fewer students in our schools and fewer people to do the things that keep a town vibrant and alive. Juneau is a small, close-knit town of 33,000 people, and when a small town’s biggest industry — in our case, it’s government — struggles, the town struggles with it.
If you see us grinning, that’s because it’s the easiest way to keep from screaming.
When we get stuck in that depressed funk, we think back to Douglas Adams: Don’t panic.
Our doomsday scenario is just that — a scenario, a fantasy. It may never happen.
Alaska is hurting, sure, but oil prices could go back up as easily as they went down. A crisis somewhere in the world or OPEC changing course at its spring meeting could put prices back where they need to be to keep state government afloat.
We don’t think that will happen, unfortunately. Not any time soon, at least.
Fortunately, we have reserves. Smart Alaskans set aside money in funds like the Statutory Budget Reserve and the Constitutional Budget Reserve — we’re not even talking about the Permanent Fund — for rainy days (or years) like these.
Because of these reserves, we don’t have to repeat the mistakes of the 1980s. In 1986, oil prices went off a cliff just like they did this year. Oil companies slashed jobs, and so did state government. Alaska fell into a deep recession and lost more than 20,000 residents. It didn’t return to 1986 population levels until 1990.
This time, we’ve planned ahead. We’ve always known the oil won’t last forever. Now, we’re getting a taste of what that’s like. We may be in a storm, but we know the rain won’t last forever. We have our rainy day fund, and we have a message: Don’t panic.
That’s as much a message for our elected leaders as it is a reminder to ourselves. Thanks to our reserves, we don’t have to immediately gouge cuts from Alaska’s budget and balance it in a single year. We can stagger those cuts, spread them over a few years to reduce the impact on our economy and the ordinary men and women who live behind the statistics.
We haven’t seen the worst of this economic storm yet. That will come in 2015. In the months to come, regardless of what comes, keep that single message in mind: Don’t panic.