Seven months ago, Facebook CEO Mark Zuckerberg was voicing plans to combat fake news on the social media website.
And this week he’s in Alaska doing what else? Creating fake news.
But that all sort of pales compared to coming to Alaska, apparently breaking the law, and providing photographic evidence of the crime to your 92,734,686 followers.
Granted, Zuckerberg can surely claim ignorance, given that Alaska fish and game laws are often confusing even to Alaskans. They are particularly confusing when it comes to non-residents and the Alaska practice of dipnetting salmon, ie. scooping them out of the water with a big net.
As Zuckerberg duly notes in a post with one of his photos he was “tagging along with locals who were going dip netting. I couldn’t participate since only Alaskans can do subsistence fishing.”
Actually, the fishery was a personal-use dipnet fishery, but it looks like a subsistence fishery. Zuckerberg probably just wrote down what those locals told him. Whether they told him exactly what the law allows only he knows. But what the Alaska Department of Fish and Game says is this:
One of Zuckerberg’s photos clearly shows him “handling the fish.” He’s trying to gut, filet or simply hack on an Alaska dipnet caught red salmon. The fish is identifiable as dipnet-caught because part of its tail has been cut off as has part of the tail of another fish on the table. Dipnet-caught fish are required to be marked in this manner.
That Zuckerberg would be ignorant of all of this is understandable. It’s Alaska, and in Alaska lots of things are complicated, and clearly Zuckerberg doesn’t do complicated well.
A simplified mess
Zuckerberg posted from Homer near the end of the Kenai Peninsula about “how different Alaska’s social safety net programs are….Alaska has a form of basic income called the Permanent Fund Dividend (PFD).”
This was Zuckerberg’s attempt to distill a unique program that pays all Alaskans – poor and rich – a dividend from the earnings of the Alaska Permanent Fund Corporation, a state-owned company.
Some economists have suggested the state created something similar to a basic income with the PFD because it provides more of a benefit to the poor than to the rich. An annual check of $1,000 or $2,000 from the state doesn’t mean much if you’re earning $100,000 per year, but it means a lot if you’re earning $11,500.
If you’re earning that little, even a $1,000 dividend would lift you over the official poverty threshold of $12,331 per year for an individual. Because of these kinds of shifts, a November 2016 study by the Institute of Social and Economic Research at the University of Alaska Anchorage concluded that the “PFD has reduced Alaska poverty rates by 2.3 percentage points on average over the past five years; about 25 percent more people would have fallen below the poverty threshold without the PFD.”
The report also added a big qualifier.
“More important, however, is that poverty rates excluding PFD income have
been rising,” it said. “The rise in poverty rates in Alaska parallels increases in the U.S. as a whole.”
In other words, Alaska’s social safety net isn’t much better than that anywhere else in the nation at curing poverty.
“Despite the ameliorating effects of the PFD,” the study said,”poverty rates have been rising in Alaska, especially for children and for residents of urban areas. One reason the PFD has become less effective in stemming the increase in child and urban poverty is that more new Alaska residents (you must live in Alaska a full year to start collecting the PFD) are arriving in urban areas poor and not eligible to receive the PFD right away. But despite the recent rise in poverty in urban Alaska, poverty rates there remain far below rates in rural Alaska, where employment opportunities are fewer.”
What is needed to end poverty in Alaska, especially in rural Alaska, is jobs. Zuckerberg appears to have missed this on his expensive vacation, but then he missed a lot.
“This (PFD) is a novel approach to basic income in a few ways. First, it’s funded by natural resources rather than raising taxes,” Zuckerberg wrote. “Second, it comes from conservative principles of smaller government, rather than progressive principles of a larger safety net. This shows basic income is a bipartisan idea.”
First off, the fund isn’t the product of “natural resources.” The fund started with taxes and royalties on oil production, and it has mushroomed thanks to investments. The fund today is largely about the state of Alaska playing the stock and bond markets.
One of the ideas behind the fund when it started was a conservative plan to keep some of the state’s oil money out of the hands of politicians so they couldn’t grow government, but that part of plan didn’t work so well.
Oil prices sky-rocketed in the late 1970s and early 2000s, and when they did, state oil taxes tied to the price-per-barrel of crude exploded as well. Lawmakers used the excess revenue to grow government.
Now, the state is wrestling with how to fund a government that costs more than the taxes on oil can support in these days of low oil prices. And a lot of politicians are running scared at the idea of telling Alaskan voters they might need to give up a portion of their PFD to pay for vital government services.
“Seeing how Alaska put this dividend in place reminded me of a lesson I learned early at Facebook: organizations think profoundly differently when they’re profitable than when they’re in debt,” Zuckerberg wrote.
About that he is right, and also about this: “When you’re losing money, your mentality is largely about survival.”
The PFD was created when the state had surplus funds, and everyone was happy. The state is now running a deficit, and most people are scared. The current situation in Alaska is about 180 degrees opposite Zuckerberg’s claim that “Alaska’s economy has historically created this winning mentality, which has led to this basic income.”
Worse and worst
Zuckerberg’s whole, convoluted, messed-up post makes the poorly viewed U.S. media look a whole lot better at condensing and summarizing information.
“Another example of basic income in Alaska are the Native Corporations,” Zuckerberg writes. “We had dinner with some Native Alaskans in Anchorage and they explained to us how their system is different from Native American reservations in the lower 48 states. In Alaska, native land is owned and developed by private corporations, which are run and owned by Native Alaskans. These corporations also pay out annual dividends to their shareholders, who are largely natives, based on the resources they develop. So if you’re a Native Alaskan, you would get two dividends: one from your Native Corporation and one from the state Permanent Fund.”
OK, to start with, all of the original shareholders in Alaska Native corporations were Alaska Natives. Only Natives were allowed to enroll at the time of Alaska Natives Claims Settlement Act (ANCSA), which was the deal Alaska Natives made with Uncle Sam instead of a treaty. Some shares were later allowed to be inherited by non-Natives or gifted to non-Native children, but the numbers appear so small that they don’t warrant a mention, and non-Natives are not allowed to vote their shares.
ANCSA was basically designed to maintain full Native control of the stock so Natives would control the companies until 1991, when the stock was to go public. But the law was amended to continue Native-only stock ownership to this day. The corporations retained the authority to issue common stock to non-Natives, but no corporation has ever done that.
Zuckerberg is right that there are basically no reservations in the 49th state. Instead, there are these profit-making corporations – businesses – with shareholders who get dividends if the corporations are successful. The corporations split $900 million in start-up money as part of the ANCSA settlement, and the 12 regional corporations were allowed to select 44 million acres of land in the state for development or other uses.
The corporations have met with differing degrees of success. Over the past decade, dividends paid to their shareholders have ranged from zero to the $11,000 the Arctic Slope Regional Corporation handed out in 2013.
Three of the corporations haven’t paid out more than $600 a year for the past decade. Most of them have paid out less than $1,000 per year on average.
Only a few have found success developing Alaska resources. A few teetered on bankruptcy until the late Sen. Ted Stevens and financier David Rubenstein came up with a scheme that allowed them to sell their losses to profitable corporations which then used the losses to offset their taxes. The moved helped stabilize the corporations.
Today, most make their money from investments and subsidiaries set up in the lower 48. Some of the latter benefit from priority contracting agreements with the U.S. government.
“Alaska has other novel social programs, like the way they support subsistence fishing,” Zuckerberg wrote. “Every year, the state dumps baby salmon into rivers and bays. The salmon swim to the ocean, grow up, and then return, which ensures that locals have plenty of salmon to catch and support their families.”
The state dumps very few “baby salmon” into the ocean. Most of the baby salmon – hundreds of millions – are dumped in the ocean by businesses – private, non-profit corporations run by commercial fishermen who net the fish when they come back to make money. The few salmon the state puts in the ocean primarily support small sport fisheries like the one for king salmon on Ship Creek in the heart of Anchorage.
Nearly all of the subsistence and personal-use salmon caught in the state are wild fish. Personal use and subsistence are basically the same thing, except subsistence fisheries are allowed only in rural areas whereas personal-use fisheries are allowed in areas classified as urban although they would look mighty rural to anyone from the Lower 48 or “Outside” as Alaskans refer to the rest of the country.
Commercial fishermen catch about 98 percent of the salmon returning to Alaska every year, and they use the money from the sale of those fish to support their families. Subsistence, personal-use and sport fishermen catch the rest and use them to help feed their families.
There is a big difference between the commercial and other fishermen, because a lot more than food is required for survival in Alaska as anywhere else. Subsistence, personal-use and sport fishermen are not allowed to sell their salmon to get money with which to buy other necessities like shelter and the fishing gear needed to catch fish for food.
“When you think about the way they support subsistence fishing as a safety net program, it has some interesting properties,” Zuckerberg wrote. “First, a common issue with safety net programs is stigma for participating, but here everyone we met was proud of this — both for its cultural heritage and for the individual accomplishment of catching and preparing their salmon. Second, most effective safety net programs create an incentive or need to work rather than just giving a handout. Supporting subsistence fishing does this implicitly because you have to work to get the fish and clean them afterwards, but it also ensures you’ll have the food you need if you put in the effort.”
Zuckerburg grew up in the state of New York and started spending a lot of time on the computer when he was in middle school, according to his bio. It’s obvious he didn’t get outside much because if he had he might have noticed people catch fish and kill animals to eat all across the country.
There is no safety-net stigma attached to this. There is only the stigma of being accused by urban elites of being a savage because you kill your own food instead of buying it shrink-wrapped in plastic. Alaskans are in no way unique here.
Hunters in Pennsylvania and Wisconsin kill and eat more than 600,000 whitetail deer every year. Hunters in other states kill hundreds of thousands more.
The number of walleyes, bass, perch, bluegills, sunfish, northern pike, whitefish, suckers, crappies and, yes, even salmon killed and eaten by people in the lower 48 easily runs into the millions.
Just as in Alaska, fishermen and hunters take pride in their abilities to harvest fish and wildlife. None of them think of fishing and hunting as a “safety net program,” though it is as much so in Minnesota or Montana or Mississippi as in Alaska.
Zuckerberg’s observations here make him look frighteningly out of touch with rural Americans and those with rural connections who’ve moved to the city but still take to the woods to hunt and fish. Zuckerberg is right up there with former President George Bush the first being baffled by a supermarket scanner.
“These are just a few examples that stood out to us about how Alaska’s social programs could inspire improvements across the country,” Zuckerberg wrote. “There’s a lot more to this place that maybe I’ll post about later. I definitely recommend coming here in the summer if you get a chance. It’s absolutely beautiful and having the sun stay up until 11 p.m. is a great experience.”
America must be on pins and needles waiting for the next post. And, oh yes, the sun in Homer at this time of year does stay up until 11. Actually, it stays up until after 11 p.m. and once it goes down civil twilight lingers. The latter provides enough light to see the “absolutely beautiful” (Zuckerberg did get that right), until well after midnight.
Someone should turn Zuckerberg on to this thing called “Google.” It’s on the internet and can be used to help look up these facts.
CORRECTION: This story was edited on July 7, 2017 to reflect that some small but almost impossible to determine number of non-Natives now hold Alaska Native corporation stock.