A Sort of Economic Thought

Alaska has done one thing tremendously right over the years - a model for the world:

The investment management of the enormous state Permanent Fund.

From the Wiki:

The Alaska Permanent Fund is a constitutionally established fund, managed by a semi-independent corporation, established by Alaska in 1976. Shortly after the oilTrans-Alaska Pipeline System, the Permanent Fund was created by an amendment to the constitution of the U.S. state of Alaska to be an investment for at least 25% of proceeds from some minerals [such as oil and gas] sale or royalties. The Fund does not include either property taxes on oil company property nor income tax from oil corporations, so the minimum 25% deposit is closer to 11% if those sources were also considered. The Alaska Permanent Fund sets aside a certain share of oil revenues to continue benefiting current and all future generations of Alaskans. Many citizens also believed that the legislature too quickly and too inefficiently spent the $900 million bonus the state got in 1969 after leasing out the oil fields. This belief spurred a desire to put some oil revenues out of direct political control. from Alaska’s North Slope began flowing to market through the

The Alaska Permanent Fund Corporation manages the assets of both the Permanent Fund and other state investments, but spending Fund income is up to the Legislature. The Corporation is to manage for maximum prudent return, and not--as some Alaskans at first wanted--as a development bank for in-state projects. The Fund grew from an initial investment of $734,000 in 1977 to the current sum of approximately forty billion dollars as of July 13, 2007. Some growth was due to good management, some to inflationary re-investment, and some via legislative decisions to deposit extra income during boom years. Each year, the fund's realized earnings are split between inflation-proofing, operating expenses, and the annual Permanent Fund Dividend.

I mention this now, knowing little about macroeconomics, because I suspect that in the Permanent Fund might be a model for what amounts to federal takeover of capital in this bailout.

There is a huge opportunity here - can we have institute a system of salaried, semi-independent, publicly- chartered capital managers for bulk of the whole U.S. financial system? Can we manage this great bulk of investment capital with a mandate for the public interest? Can we look at the this as an opportunity for a American society whose economy is, at heart, directed towards profitable- and far more stable- social investing?

A Permanent Fund Corporation of the United States?

I know, I know: crazy talk.