Up here in the Last Frontier, we know a thing or two about insulation. Whether it's our boots, our attic or the car battery, we've found ways to keep the cold at bay.
As it turns out, insulation works when it comes to the economy, too. While the Lower 48 is in a financial cold snap, we here are toasty warm. Yes, we're watching the thermostat and we're making sure the windows and doors are weatherstripped, but generally speaking, the Alaska economy is well-buffered from the meltdown affecting the rest of the country.
Here on the Kenai Peninsula, the real estate market is strong. Alaska has the second-lowest foreclosure rate in the nation. Property values are stable. The questionable lending practices which destabilized Wall Street simply didn't happen here.
The Kenai Peninsula has a fairly diverse economy, and losses in one sector are offset by growth in another. And with just 10 shopping days left until Christmas, local business owners report that peninsula consumers are spending about the same amount of money they did last year.
"We can't tell there's an economic recession like you're hearing about in the states, but a lot of times, Alaska is a little bit different that way," said Susan Jordan, owner of Fireweed Herb Garden and Gifts in Kenai.
Statewide, Alaska has done better than simply weather the past two recessions, and there aren't any indicators that this one will be any different. Our economy is based on resource extraction, and demand for those resources isn't dropping off.
"During the last two recessions (in 1990 and again in 2001), Alaska kept growing," said Dan Robinson, an economist with the Department of Labor.
Robinson said overall, the state has seen growth in jobs over the first three quarters of 2008. And surplus oil revenue from the first part of the year means the state won't have to make wholesale job cuts in the coming year.
"In the short term, the state does not have to make things worse, and is in a position to make things better," Robinson said. "We are resource based. Those industries, commodity prices and oil prices are doing some strange things right now and surprising the experts. When they stabilize, we will have a better idea of what will happen. Not too many people expect them (oil prices) to stay low."
In this day and age, it's wise to approach the economy with caution. Taking steps to insulate your household finances -- reducing credit card debt, sticking to a monthly budget, making your home more energy efficient -- are always good ideas no matter what the state of the economy. At the same time, take comfort in the fact that our state is well-insulated from the economic meltdown in the Lower 48, shrug off some of the gloom and doom of the nightly newscasts and enjoy some holiday cheer.
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