Strengthening Constitutional Self-Government

No Left Turns

Heightening the Contradictions

What happens when Unions and Governments go Capitalist? We may soon find out. Today’s New York Post has a story about the various Presidential candidates’ plans for, on one hand, a gas tax holiday, and, on the other, a windfall profits tax on those very firms. There are, however, complications:

Democratic proposals to tax oil companies would wind up hurting the very blue-collar voters that Obama and Clinton are courting, Wall Street watchdogs say.

A new tax would drive down share prices - and take a nice chunk out of public-employee pension funds and mutual funds whose portfolios are flush with energy stocks, experts say. . . .

Obama opposes the gas-tax holiday but wants to sock oil companies with a windfall tax, to provide $1,000 tax credits for low-income families.

But those profits often keep the retirement plans of American families afloat.

About 54 percent of outstanding shares in ExxonMobil, the world’s biggest oil company, are held by institutional investors like TIAA-CREF, which provides retirement planning for more than 3 million people.

Other big Exxon investors include pension funds for California’s and New York’s state employees, each of which owns more than 20 million shares, and the New York State Teachers Retirement Fund, which owns 18 million shares.

Institutional investors hold even larger portions of other oil companies, including 84 percent of Conoco Phillips, 88 percent of Hess and 89 percent of Marathon.

Personally, I have long worried that the rise of giant public pension funds would be bad for the free market. It can’t be good for quasi-public entities like CALPERS to own large chunks of private corporations. In this instance, however, perhaps it might have a fringe benefit.

Discussions - 1 Comment

Well, I guess that those of us with CREF shares just have to rise above our merely economic interests....

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