Recently the Alaska Permanent Fund has carelessly been called a “Sovereign Wealth Fund”. To equate the two is at best confusing. At worst, it is either evidence of ignorance or an intention to mislead Alaskans who have forgotten, or are careless with, their ‘birthright’ (citizenship) sovereignty.
Alaskan “sovereignty” is defined on the first page of our Constitution. The unquestioned authority and power in this State belongs to “the People”, a political entity not equivalent to what we call State Government, which the Constitution goes on to create. Our Constitution creates three distinct branches of government – the Executive, Legislative, and Judicial – expressly instituted for the “maximum benefit” (the good) of the people of Alaska, the sovereign.
“All political power is inherent in the people. All government originates with the people, is founded upon their will only, and is instituted solely for the good of the people as a whole.” (Alaska Constitution, Article 1, Section 2 and Article 8, Section 2)
The Alaska government, instituted by and for the sovereign, in turn created the Alaska Permanent Fund (PF) to prevent short term legislative over-spending of natural resource wealth. The only mechanism this same government instituted to ensure a “maximum benefit” from the PF earnings back to the sovereign, is the permanent fund dividend (the PFD). To argue the earnings of the permanent fund should be used to maintain legislative over-spending is ironic cognitive dissonance. It ignores the spending addiction and feeds the problem caused by state government’s easy access to the other 75% of natural resource wealth. The PF and its earnings truly is “Sovereign Wealth”. It IS NOT State government wealth even if members of State government think it is the sovereign.
There is a very real, disturbing potential threat to the sovereignly owned permanent fund wealth. It comes from multiple directions:
- The Executive Branch: Governor Walker is openly promoting use of PF earnings to balance the budget deficit. He has consistently referred to the PF as a “sovereign wealth fund” – without clarification that the executive branch is not the sovereign. His presumption goes even further if he truly intends to warp the investment standards to by forcing purchase of investments which enhance state government as opposed to purely and simply bringing the highest return for the sovereigns. This meddling could destroy the lofty purpose of the PF.
- The Legislative Branch: It appears there are an uncomfortably high percentage of legislators who seem to believe backfilling the unsustainable over-spending of the historically bountiful ‘non-PF revenue’ is acceptable. The legislature is the only branch which can enact laws to specifically clarify “maximum benefit” for the “sovereign” as it did when it instituted the PFD. The legislative branch is the most influenced by all Alaskans (the “sovereign”). Therefore, the legislative branch is the best (arguably the ONLY) hope to protect the PFD. If the sovereigns elects a majority of legislative representation who believe the “maximum benefit” will come from the government spending the money as opposed individuals, Alaska will be re-defined as a socialistic state. This would be a sad and ironic end of the lofty purpose for the PF.
- The Judicial Branch: Former Attorney General Craig Richards has consistently and publicly advocated for the Governor’s plan to ‘tap into’ the PF earnings. He advocated for variations of a “fiscal plan” using carefully designed PowerPoint presentations and using the very best arguments and data, compiled by entities who would directly benefit in the short term from maintenance of government overspending. An Alaskan AG is appointed by the governor (not the sovereign), and is the source of legal counsel for the entire executive branch. The AG is also the head of the entire Department of Law… including the court system. The court system in Alaska prides itself in being not “political”, which openly implies it prefers to be insulated from being influenced by the Sovereign. Beware! The courts are not a safe bet for justice regarding the PFD. As agencies of the State, they have an inherent conflict of interest. We need to be very careful about jumping into the court system to solve our problem with the Governor’s unprecedented veto of PFD appropriation. Yes, what the Governor did single-handedly was arguably not lawful – BUT our courts are NOT DESIGNED to be influenced by the people, for the people, and we can see evidence of numerous high court decisions seemingly “against” the people.
- The Conflict of Interest of Alaska business may be the most disturbing threat: There are many influential Alaskans and Alaskan businesses which directly benefit from ‘generous’ State spending. Recent radio ads advocating for legislative spending of PF earnings should have openly included a ‘conflict of interest’ disclaimer. The businesses which initiated and paid for the ads should have included a disclosure of the amount and percentage of their revenue generated by state contracts. This threat is particularly disturbing because many Alaskans are prospering because of good jobs created by state over- The unintended consequence of overspending will ultimately include the pain related to lost businesses and jobs as we are forced to pull back.
I believe our Legislative Branch is the best bet for protecting our PFD. To get the job done, Alaskans must elect a majority of legislators who understand the grave significance of the task. Hopefully, the incoming legislative freshmen will be fast learners. As you can guess, a “lame duck” (myself included) has less need to be discrete. Check out lameduckquacks.com if you want to read more from me and other lame ducks.