Homepage / Technology / Alaska gives free cash handouts—here's what Mark Zuckerberg thinks everyone can learn from it
Amazon says this Prime Day was its biggest shopping event ever Kudlow says President Trump is 'so dissatisfied' with China trade talks that he is keeping the pressure on As stocks regain their footing, an ominous warning looms Goldman Sachs downgrades Clorox to sell, says valuation is 'unsustainably high' How Satya Nadella has spurred a tripling of Microsoft's stock price in just over four years Kudlow says economic growth could top 4% for 'a quarter or two,' more tax cuts could be coming The one chart that explains Netflix’s stunning comeback US housing starts plunge 12% in June to a nine-month low Aerospace titans Boeing and Airbus top $110 billion in orders at Farnborough Target uses Prime Day to its advantage, logging its 'biggest online shopping day' so far this year Billionaire Marc Lasry sees bitcoin reaching up to $40,000 as it becomes more mainstream and easier to trade These are the 10 US airports where you're most likely to be hacked Amazon shares slightly higher as investors await Prime Day results Wreck of Russian warship found, believed to hold gold worth $130 billion A bullish ‘phenomenon’ in bond market is weeks away from fading, top credit strategist says Stocks making the biggest moves premarket: MS, GOOGL, TXN, UAL, NFLX & more Twitter shares up 50% since late April means most upside priced in, analyst says in downgrade EU fines Google $5 billion over Android antitrust abuse Mortgage applications fall 2.5% as buyers struggle to find affordable homes America may not have the tools to counter the next financial crisis, warn Bernanke, Geithner and Paulson Investors are getting spooked as the risk of a no-deal Brexit rises EU expected to fine Google $5 billion over Android antitrust abuse Ex-FBI chief James Comey urges Americans to vote for Democrats in midterm elections Elon Musk apologizes to British cave diver following baseless 'pedo guy' claim Disney, Comcast and Fox: All you need to know about one of the biggest media battles ever Xiaomi shares notch new high after Hong Kong, mainland China stock exchanges reach agreement The trade war is complicating China's efforts to fix its economy European markets set for a strong open amid earnings; Google in focus Hedge fund billionaire Einhorn places sixth in major poker tournament The biggest spender of political ads on Facebook? President Trump Asian stocks poised to gain after Fed's Powell gives upbeat comments; dollar firmer Stocks are setting up to break to new highs Not all FAANG stocks are created equal EU ruling may be too little, too late to stop Google's mobile dominance Cramer explains how Netflix's stock managed to taper its drop after disappointing on earnings Airbnb condemns New York City's 'bellhop politics,' threatens legal retaliation Amazon sellers say they were unfairly suspended right before Prime Day, and now have two bad choices Investor explains why 'duller' tech stocks can have better returns than 'high-flying' tech names Elon Musk is 'thin-skinned and short-tempered,' says tech VC Texas Instruments CEO Brian Crutcher resigns for violating code of conduct Google Cloud Platform fixes issues that took down Spotify, Snapchat and other popular sites Uber exec: We want to become the 'one stop' transportation app 'What a dumb hearing,' says Democrat as Congress grills tech companies on conservative bias Amazon shares rebound, report says Prime Day sales jumped 89 percent in first 12 hours of the event How to put your medical history on your iPhone in less than 5 minutes Investment chief: Watch these two big events in 2018 Even with Netflix slowing, the market rally is likely not over Cramer: Netflix subscriber weakness debunks the 'sky's the limit' theory on the stock Netflix is looking at watch time as a new area of growth, but the competition is stiff Why Nobel laureate Richard Thaler follows Warren Buffett's advice to avoid bitcoin Rolls-Royce is developing tiny 'cockroach' robots to crawl in and fix airplane engines After Netflix plunge, Wall Street analysts forecast just tame returns ahead for the once high-flying FANG group Roku shares rise after analyst raises streaming video company's price target due to customer growth China is investing 9 times more into Europe than into North America, report reveals Amazon says US Prime Day sales 'so far bigger than ever' as glitch is resolved Netflix is on pace for its worst day in two years US lumber producers see huge opportunity, rush to expand San Francisco to consider tax on companies to help homeless Homebuilder sentiment, still high, stalls as tariffs, labor and land drive up costs Powell backs more rate hikes as economy growing 'considerably stronger' Netflix history is filled with big stock declines – like today – followed by bigger rebounds Intel shares get downgraded by Evercore ISI due to rising competition from Nvidia, AMD Petco aims to reinvent the pet store with something you can't buy online Genetic testing is coming of age, but for consumers it's buyer beware Tech 'FAANG' was the most-crowded trade in the world heading into the Netflix implosion, survey shows Netflix weak subscriber growth may indicate a 'maturity wall' that could whack the stock even more: Analyst This chart may be predicting the bull market's demise Wall Street says Netflix's stock plunge is a ‘compelling’ buying opportunity because the streaming giant ‘never misses twice’ Tesla sinks after Musk tweets, again Boeing announces new division devoted to flying taxis Stocks making the biggest move premarket: NFLX, UNH, GS, AMZN, WMT & more Deutsche Bank downgrades Netflix, but says big subscriber miss is not 'thesis changing' IBM is experimenting with a cryptocurrency that’s pegged to the US dollar North Korea and Zimbabwe: A friendship explained Virgin Galactic spinoff Orbit to launch rockets from the UK with space deal Artificial intelligence will create more jobs than it destroys? That’s what PwC says ‘Treasonous’ Trump and ‘Putin’s poodle:' Scathing headlines follow the Trump-Putin summit China’s fintech companies offer ‘enormous’ opportunity, investment manager says Trump's performance at summit with Putin was 'unprecedented,' experts say Walmart and Microsoft link up on cloud technology as they both battle Amazon European stocks seen mixed amid earnings; Fed’s Powell to address Congress How I knew I should quit my day job and run my start-up full-time: Viral website founder China's stocks have been trounced, but the trade war may ultimately be good news for those shares Billionaire tech investor Peter Thiel bets on crypto start-up Block.one Asian shares subdued open after mixed close on Wall Street; energy stocks under pressure Amazon cloud hits snags after Amazon Prime Day downtime Netflix isn't doomed by one quarter unless people start questioning the long-term investor thesis Tech stocks set to sink on Tuesday after rough evening for ‘FANG’ Netflix plummets after missing big on subscriber growth This wristband lets humans control machines with their minds The U.S. has a rocky history convincing Russia to extradite computer criminals Amazon suffers glitches at the start of Prime Day Jeff Bezos is now the richest man in modern history 'The United States has been foolish': Read Trump and Putin's full exchange Goldman Sachs recommends these 5 highly profitable companies — including Nvidia — to combat rising inflation Goldman Sachs releases 'tactical' stock picks for this earnings season Three red flags for Netflix ahead of its earnings report The bond market may be raising recession fears, but don't expect one anytime soon Cramer: Banks are 'making fortunes' but are still as hated as they were during the financial crisis Putin told Trump at summit: Russia never meddled in US election

Technology

Alaska gives free cash handouts—here's what Mark Zuckerberg thinks everyone can learn from it

The billionaire founder of Facebook Mark Zuckerberg spent his July 4th weekend in Alaska learning about fishing and local economics as part of his “Year of Travel Challenge.” In Alaska, all residents get a yearly cash payment just for living in the state.

The trip gave Zuckerberg yet another platform to lobby for universal basic income (UBI), as he did during his commencement address to Harvard in May.

Alaska has a state-wide version of UBI. In 1976, the state voted to create the Alaska Permanent Fund as the Alaska pipeline construction neared completion. The goal was to share the oil riches with future generations. Still today, people living in Alaska get cash payouts from the fund, called the Permanent Fund Dividend. Recipients must be Alaska residents for the entire calendar year before applying, with no plans to leave the state, according to the Alaskan government’s website.

Zuckerberg says the state’s cash handout program “provides some good lessons for the rest of the country.”

The dividend averages $1000 (or more) per person. “That can be especially meaningful if your family has five or six people,” says Zuckerberg in a post he wrote about the payment.

“This is a novel approach to basic income in a few ways. First, it’s funded by natural resources rather than raising taxes. Second, it comes from conservative principles of smaller government, rather than progressive principles of a larger safety net,” says Zuckerberg. “This shows basic income is a bipartisan idea.”

Fundamentally, Zuckerberg says people think and work differently when they have their basic needs met.

“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. When you’re losing money, your mentality is largely about survival,” says Zuckerberg.

“But when you’re profitable, you’re confident about your future and you look for opportunities to invest and grow further. Alaska’s economy has historically created this winning mentality, which has led to this basic income. That may be a lesson for the rest of the country as well.”

This is the second time Zuckerberg, who at 33 years old is worth almost $62 billion according to Forbes, has publicly extolled the virtues of social safety net programs that give free money to citizens regardless of employment status.

“We should have a society that measures progress not just by economic metrics like GDP, but by how many of us have a role we find meaningful. We should explore ideas like universal basic income to give everyone a cushion to try new things,” says Zuckerberg, while speaking at Harvard, from which he famously dropped out.

According to Zuckerberg’s remarks at Harvard, having your basic needs met allows and encourages creativity and innovation. If he hadn’t been comfortable financially as a kid (his dad was a dentist), he says, then he might not have created Facebook.

“I know lots of people who haven’t pursued dreams because they didn’t have a cushion to fall back on if they failed,” says Zuckerberg. “We all know we don’t succeed just by having a good idea or working hard. We succeed by being lucky too. If I had to support my family growing up instead of having time to code, if I didn’t know I’d be fine if Facebook didn’t work out, I wouldn’t be standing here today.”

Zuckerberg isn’t alone in promoting the idea of universal basic income. Tech titan Elon Musk has said it will be a virtual necessity as automation replaces lower skilled jobs. And Sam Altman, the president of Silicon Valley start-up shop Y Combinator, has also supported the idea of giving cash handouts to everyone. “We think everyone should have enough money to meet their basic needs—no matter what, especially if there are enough resources to make it possible,” he says.

Despite Zuckerberg’s thoughts, some have questioned whether Alaska’s model is having a positive impact on its residents.

A 2016 survey credits the dividend with keeping two to three percent of Alaskans above the poverty line. However, there is some evidence that receiving a large lump sum payment can be detrimental. According to a study published in the Journal of Public Economics in 2011, Notre Dame economist William Evans and Timothy Moore from the University of Maryland found mortality among urban Alaskans increases by 13 percent during the week that fund direct deposits are made. (Mortality rates increase for other groups that receive lump payments, too.)

And a July 2010 paper from Scott Goldsmith, a Professor of Economics at the University of Alaska Anchorage, says that while there is not an overabundance of research into exactly what and how people are spending their checks, anecdotal evidence suggests that Alaskans tend to spend the lump sum payment right away, rather than using it to help sustain them through the year.

But “One reason for this is that a large dividend or the combination of several dividends together provides some recipients with the ‘liquidity’ necessary to buy an expensive consumer durable that provides consumption benefits lasting a long time—appliances, snow machines, etc.,” says Goldsmith.

While the evidence is inconclusive surrounding the Alaskan cash handouts, one thing is more clear: once cash handouts are implemented and people expect them, they are very hard to reverse.

“The first lesson from Alaska is that once such a scheme is in place, it is very difficult to reverse. Popular support for these handouts is so strong that it is politically taboo to even suggest tampering with it,” says a 2011 report from the World Bank in Mongolia, after the country had just instituted its own cash handout program.

See also:

Elon Musk: Robots will take your jobs, government will have to pay your wage

Elon Musk says robots will push us to a universal basic income—here’s how it would work

Mark Zuckerberg: Success comes from ‘the freedom to fail,’ so billionaires like me should pay you to do that

Like this story? Like CNBC Make It on Facebook.

Source: Tech CNBC
Alaska gives free cash handouts—here's what Mark Zuckerberg thinks everyone can learn from it

Comments are closed.