Profit-sharing: Alaska showing Iraq the way?

Where are we? The second or third plan for rebuilding Iraq? Remember Jay Garner?

Need I say more? Of course, it's not like Democrats have much of a plan for Iraq. Even as the pre-war arguments for invasion fray at the edges and we see more and more signs the administration had little idea what it was getting itself into, the Democratic presidential contenders– if that's not too generous a word for them– stay mum on Iraq because they don't have much of a clue what to do either.

But through all the hullabaloo, one idea has been quietly making slow but steady progress on the merits of its own inherent logic. The plan is to put a measure of Iraq's vast oil wealth into the hands of ordinary citizens by creating an Iraqi Permanent Fund modeled after the one in Alaska that sends out annual dividend checks to every resident of the state. It's an idea that appeals to both the right and the left.

It all started back on April 9– the same day U.S. troops helped Baghdadis pull down that statue of Saddam– when Steve Clemons, a veteran think-tanker and former Senate aide, floated the idea in a New York Times op-ed piece.

In the lead-up to the Iraq war, hawks often pointed to America's post-war successes in democratizing Japan and Germany as examples of what could be accomplished in post-war Iraq; however, the analyses often rested on superficial and incomplete readings of history. One of the roots of successful democratization in Japan was the U.S.-mandated land reform that broke up vast seignorial estates and parceled out land to individual farmers. That gave millions of Japanese farmers new wealth and, just as important, a stake in the post-war regime.

Oil is the issue in Iraq, of course. But why not apply the same principle? Why not find some way to cut individual Iraqis in on the country's wealth? That could accomplish at least four goals:

* It could abolish those ghastly landscapes of poverty and decay dotted with ridiculously opulent palaces. Yes, the palaces were Saddam's. But oil-rich and underdeveloped countries tend to devolve into kleptocracies. So it could happen again.

* It could help diversify the Iraqi economy, creating sources of wealth and middle class livelihood outside the oil sector and the state bureaucracy.

* It could give ordinary Iraqis a material stake in the new Iraq we're trying to build.

* And it might burnish our own tarnished image abroad by demonstrating that our interest in Iraq was never in taking control of its oil.

Clemons' idea got picked up in the Los Angeles Times, Newsweek, and other publications. Then on April 29, U.S. Senator George Allen (R-VA) raised the idea with Secretary of State Colin Powell at a Foreign Relations Committee hearing. Powell expressed interest in the idea, telling Allen the administration was considering it. And after that, folks at the National Security Council seemed to do just that, running the numbers and sounding out experts on the potential plan.

Then the idea seemed to go dormant for a while– but not for long, as politicians on Capitol Hill got into the act.

Senators Lisa Murkowski (R-Alaska) and Mary Landrieu (D-LA) announced plans to introduce a sense of the Senate resolution endorsing the idea. Senator Ted Stevens (R-Alaska) began putting out word that he'd gotten the administration to take the idea seriously. Then a Zogby poll reported that 59 percent of Americans support some form of the Alaska model for Iraq.

"I was pleasantly surprised," says Clemons. "I would have thought more Americans would want to use that money to offset the costs of occupation and reconstruction."

An even more surprising development came on June 22, when American proconsul Paul Bremer endorsed the idea before the World Economic Forum in Jordan. Bremer suggested that the United States was open either to a plan on the Alaska model or one which uses a percentage of accumulated oil revenues to "finance public pensions or other elements of a social safety net needed to ease the transition from a state-dominated to a private sector economy."

There's little doubt that Bremer got a sign off from Defense Secretary Don Rumsfeld before endorsing the proposal in such a high-profile international setting. So the administration seems to be hesitantly, but unmistakably, getting behind the idea.

The real mystery in all this has been the silence of Democratic presidential candidates. True, exporting the Alaska model, or some similar plan, would be difficult. The concept would have to be adapted to the particulars of Iraq in ways that are hard to predict. And it obviously wasn't an idea the administration had when it went into the country.

But the fact that they've warmed to the idea– signaled most clearly by Bremer's speech– shows a growing realization on the administration's part that American reconstruction must look beyond political reform to a fundamental restructuring of the political economy, one that makes the mass of the Iraqi population into a constituency of the new regime. The Democrats' failure to get on board, or seriously engage in this debate, is a worrisome sign for their prospects in 2004. Now that the Bush administration is embracing the plan, their chance may have passed.

The essay– distributed by the Featurewell service– originally appeared in The Hill, a non-partisan Congress-oriented weekly.