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Clinton’s rejection of a nationwide dividend has a lesson for Alaska’s fiscal plight

  • Author: Dermot Cole
    | Opinion
  • Updated: September 16, 2017
  • Published September 16, 2017

No need to announce the amount of the Permanent Fund dividend on live TV this year, with a phony sense of mystery about the number.

Action by the Legislature and Gov. Bill Walker took the suspense out of the exercise this year with a bipartisan decision two months ago to set the 2017 dividend at $1,100 in a state law. That followed the most difficult and important decision of Walker's time in office — the 2016 veto that cut the dividend to $1,000, a decision upheld by the Supreme Court.

The $1,100 per person will be distributed Oct. 5, the dividend division says, for a total of about $672 million.

Those who feel shortchanged by a dividend that is about half of what it might have been won't take any solace in hearing that the state is facing a financial crisis that requires such unpopular decisions. This action preserves about $650 million in Permanent Fund earnings for future use.

A lot of people have convinced themselves that the dividend is not a government handout but something they already own. They deserve a government check because they have lived in Alaska for a year.

They claim the dividend is in accord with conservative private-sector thinking, which sounds more noble than getting something for nothing.

There are also Alaskans who contend that the state has no business implementing an income tax as long as the owner state is sending money to everyone with a pulse.

Then there are Alaskans who see the dividend as a way to reduce income inequality in Alaska, raising the standard of living for the poor and providing a benefit without regard to income. They like the progressive idea of a government guarantee of a basic income.

The dividend has long been subject to such eye-of-the-beholder differences. And never more so than today, both in Alaska and beyond.

It was interesting to read this week that Hillary Clinton was tempted to base part of her presidential campaign on a dividend-like plan for the entire country.

"We would call it 'Alaska for America,' " she wrote in "What Happened," her autopsy of her failed 2016 campaign.

That would have been a bad name, given that most people would think first of cold weather, not cold cash.

Clinton said she had read a book before starting her campaign in which California author Peter Barnes argued for emulating the Permanent Fund dividend model.

The Permanent Fund dividend is based on earnings from a portion of oil royalties invested over the past 40 years. The theory is that since one-eighth of the oil is owned in common by all Alaskans, this is one way to share the wealth.

In "With Liberty and Dividends for All: How to Save Our Middle Class When Jobs Don't Pay Enough," Barnes said the feds could give money to all Americans — say, $5,000 each — raising it with taxes on resources owned in common.

This would include the atmosphere, public lands, public airwaves and the nation's financial infrastructure.

This is what is known as "universal basic income," which Barnes said would replace "winner-take-all capitalism" with "everyone gets a share capitalism."

Clinton said she and her husband were fascinated by the idea of giving money to everyone this way.

"Once you capitalize the fund, you can provide every American with a moderate basic income every year," she wrote. "Besides cash in people's pockets, it would also be a way of making every American feel more connected to our country and one another — part of something bigger than ourselves."

But Clinton said she found a problem with the theory put forward by Barnes — they couldn't make the numbers work. She said the responsible thing was to drop the whole idea.

"I wonder now," she wrote, "whether we should have thrown caution to the wind and embraced 'Alaska for America' as a long-term goal and figured out the details later."

That would have been a false promise, which is why I think she included the story in the book. She didn't have to say that Donald Trump is one politician who rarely bothers with difficult details.

It is always easier in politics to skip the specifics if you can't make the numbers work.

This is not just a federal matter. We've seen exactly the same thing as the state grapples with its fiscal problems. With the exception of the dividend cut, which is a big exception, we have yet to deal with the difficult details.

Columnist Dermot Cole can be reached at dermot@alaskadispatch.com. 

The views expressed here are the writer's and are not necessarily endorsed by Alaska Dispatch News, which welcomes a broad range of viewpoints. To submit a piece for consideration, email commentary@alaskadispatch.com. Send submissions shorter than 200 words to letters@alaskadispatch.com or click here to submit via any web browser.

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