Hagan's counterattack fires too broadly
Latest from Kay Hagan's campaign:
"Elizabeth Dole owns $3 million in oil stocks. Each time you buy gas, her cash register goes 'ka-ching.'
"But it’s not just that…
"Dole’s funded her campaigns with nearly $300,000 in contributions from Big Oil.
"And she’s voted to give them $17 billion in tax breaks.
"Elizabeth Dole gets richer. Her campaigns get richer. Big Oil gets richer.
"And working families? They’re paying the price."
I get it. Hagan's striking back in response to the tasteless and inaccurate "Fibber Kay" ad.
But making an issue of Elizabeth Dole's ownership of oil industry stock, and making a political target of the oil industry in general, isn't smart ... and not just because Hagan herself is invested in the industry.
Millions of Americans, most of whom aren't nearly as wealthy as Dole or Hagan, are also invested in oil.
As the Washington Post reported in July:
"Soaring fuel prices that are burning a hole in the wallets of consumers are not only benefiting oil companies and Middle Eastern producers. They are also lighting up the investment returns of pensions funds, which millions of ordinary Americans are counting on for their retirement."
Get that? Each time you buy gas, the retirement fortunes of millions of ordinary Americans become a bit more secure. Maybe your own, too. You're not just paying the price, you're reaping some of the benefits.
Politcians of both parties are trying to win votes by ripping the oil companies, which have made "record profits" this year. Some, including Hagan, favor windfall profits taxes. But I haven't heard any explain what level of profit is acceptable and what should be subject to a windfall tax. In other words, how much profit should the U.S. government allow a company to make? And should this policy apply to industries that are more profitable than oil, or just to oil because, well, it's a politically easier target? Then, what might be the unanticipated consequences of such an action by the government? A decline in stock values and subsequent losses for millions of ordinary Americans' pension funds? Less oil production, forcing a further escalation in price? Less inclination to explore for more oil or to fund research into energy alternatives?
Whatever the answers to those questions, Dole and Hagan aren't contributing to an enlightened discussion of the issue. They'd do better to put their campaigns on a positive track.
Comments (3)
To report abuse of the comment feature on this site, please use the feedback form at the bottom of any page.
"Get that? Each time you buy gas, the retirement fortunes of millions of ordinary Americans become a bit more secure. Maybe your own, too. You're not just paying the price, you're reaping some of the benefits."
Setting aside for the moment the impact high gas prices have on the monthly budgets of those retirement investors (quality of life), and the fact that this added (personal) expense reduces the monies they could be earmarking for retirement investment, let's look at just the performance of retirement funds themselves.
High fuel prices end up generating a "net loss" in the value of balanced portfolios and/or mutual funds, because they adversely impact the performance and profitability of other (non-energy) industries and services included in the fund.
Whether it's high transportation costs, shrinkage of retail sales or increases in the costs of petrochemical byproducts-based raw materials (plastics), high fuel prices reduce profits across the board. Which in turn erodes the value and yield of these other stocks.
The oil industry is sort of a reverse bell-weather. Just as a strong new housing surge gives a bump to labor, construction materials and retail, a strong oil market tends to drag others down. It's one of the reasons (I believe) we need much stronger regulations and price controls, because so much of our economy is impacted by the oil industry.
Posted on September 11, 2008 1:39 PM
Thanks for the analysis. You've exposed why I'll end up depending on social security when I retire, if I ever retire.
Posted on September 11, 2008 1:44 PM
Mr Clark, if you are planning to retire on SS, you are in trouble. When I entered the working field, there was no IRA,are 401k. Thankful, they came into play when I was in my forties, I took full advantage of both of them, The democrats took away the IRA after a few years. that why when I hear someone say you get your SS* back in three years I laugh. I know exactly how much, I put in my 401 and my Ira, I know how much I put in SS. I also know which one sucks. If I was working again I would put my money in the Roth Ira.
They leave out, in my case 44 years of compound interest.
Posted on September 11, 2008 6:48 PM