Sunday, May 20, 2007

Pensioners Will Pay for Israel

Neo-conservatives have succeeded in getting Barack Obama to jump through a big hoop for them. In particular, Sen. Obama has introduced the follow bill:

The bill, the Iran Sanctions Enabling Act of 2007, would require the federal government to publish a list of U.S. overseas subsidiaries and foreign companies that have invested more than $20 million dollars in Iran’s energy sector. It would also authorize state and local governments to divest the assets of their pension and other funds from any company on that list and protect fund managers who divest from listed companies from lawsuits by investors unhappy with the results.


Interesting.

The sponsors of this bill are the same people who dragged us into the Iraq war causing over 3400 US deaths and federal spending of some 500 billion dollars and counting. These are the same people who are responsible for killing 100,000 - 600,000 Iraqis as well as driving millions out of the country in order to "liberate" it. These are the same people responsible for destroying Iraq’s infrastructure by imposing 10 years of sanctions and bombing followed by the ongoing war. These are the same people who caused the Republican Party to lose majorities in both houses of congress and who have severely damaged the United States reputation internationally.

Now, these same people want to use the state pension systems as their next vehicle for conducting foreign policy experiments. If I were depending on these pensions I would be nervous. I wouldn’t want the Neocons to do for my pension what they have done for Iraq.

Exxon has been one of my best performing stocks over the last few years. I am sure most other energy related companies have also done well (in part thank to the Neocons). Some of these stocks will be made unavailable to state pensions making their already difficult job of generating high yields even more difficult.

The bill's significant risk to pension fund performance is well understood by the sponsors of this legislation. They have purposefully included a clause protecting the pension fund manager from lawsuits. They know the activities contemplated in this bill are very likely to hurt fund performance.

The policies contemplated by this bill will also hurt American businesses. Companies doing profitable business Iran will be tempted to stop doing so to get off this list. Consequently they will miss valuable business opportunities thereby opening doors for unencumbered foreign competition to step in (Russia, China, Europe, for example). US employees involved in these projects may loose their jobs, and America may loose access to value energy sources and supplies.

Furthermore, as the Wall Street Journal crowd likes to point out when discussing trade with China, our best way to liberalize a country to is to promote trade with them. We should use this same policy with Iran.

So, again we see one of the many costs imposed on the US for our unthinking and unjustified support for Israel. I suppose past performance is no guarantee of future results. Anyone with a state pension better hope this is the case.

2 Comments:

Anonymous Anonymous said...

Are pension managers experts in foreign policy? Why should pension managers being making these decisions?

5/20/2007 03:04:00 AM  
Anonymous taxman said...

The pensions are guaranteed, so really the taxpayer is on the hook, but your point is still valid.

5/20/2007 01:47:00 PM  

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