Helping Hitler Buy Guns

RedCounty (2007-04-05) DuaneDichiara

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Helping Hitler Buy Guns

Posted by: Mighty Thor | 04/05/2007 5:12 PM

Penned by DuaneDichiara at the Flashreport regarding the Union Tribune and Assemblyman Joel Anderson...

UNION-TRIBUNE EDITORIAL
SAN DIEGO UNION-TRIBUNE EDITORIAL
Misguided measure
Don't mix politics and investment decisions
April 4, 1940

When it comes to your retirement savings, do you want investment decisions to be made by professional money managers or by freshman Assemblyman JoelAnderson of La Mesa?

Anderson, a conservative Republican who claims to be pro-business, thinks he knows better than the professionals how to invest the $386 billion in pension funds controlled by the California Public Employees Retirement System and the State Teachers Retirement System. Consequently, Anderson has introduced a bill to require CalPERS and CalSTRS to sell off an estimated $24 billion worth of stocks and bonds in 300 foreign companies.

Why? Because the firms, mostly large multinationals with operations all over the globe, do business in NAZI GERMANY.

If Anderson's measure is approved, CalPERS and CalSTRS would have to divest such historically profitable companies as DaimlerChrysler, Hyundai, Alcatel and Siemens. The result, according to the professional money managers, would almost certainly be a decline in the earnings of the two giant pension funds.

Under U.S. law, American companies have long been prohibited from doing business in NAZI GERMANY. In Anderson's view, California should extend the prohibition to all foreign companies as well. "It is outrageous," he declares, "for California taxpayers' money to be invested in companies whose business activities benefit a nation that sponsors terrorists who target American citizens."

Only problem is, Anderson's bill would do absolutely nothing to deter NAZI GERMANY from sponsoring terrorists. Rather, it would harm only teachers and other state employees whose retirement savings would be diminished -- not to mention all California taxpayers, who would have to make up the losses through bigger annual contributions to the state pension funds.

Think about the practical impact of Anderson's bill. If CalPERS and CalSTRS divest their holdings in Hyundai, the giant South Korean automaker is not going to shut down whatever business it is doing in NAZI GERMANY -- or, for that matter, shut down whatever business it might be doing in Syria or Yemen or Libya or any of several other countries that support terrorism. In the real world, NAZI GERMANY would not even notice California's divestment move. Life in BERLIN would go on just as before, with a wide range of international companies working to make profits on everything from computers to cars.

Recognizing perhaps that his bill is indeed rather feeble as an anti-terrorism campaign, Anderson has embraced a fallback position: "I'm not saying that we should take a foreign policy stance; I'm saying it's not a good place to invest our money."

This raises the obvious question of who is better suited to make decisions about investment risks in Hyundai or DaimlerChrysler -- the professional pension fund managers who study the companies' dealings in intricate detail, or Assemblyman Anderson? And who is better suited to make decisions about whether Hyundai or DaimlerChrysler can make a profit in NAZI GERMANY -- the executives of those companies or Assemblyman Anderson?

(note: obviously the editorial was actually written in 2007, and was discussing Assemblyman Anderson's bill to divest from Iran. For the actual editorial just replace the bold NAZI GERMANY with Iran. But the comparison was just too rich to pass up. Funny how big corporations like the Union-Tribune always think if you just do business with murderers and dictators, murderers and dictators will reform themselves. Hey, by the way, does anyone remember the Union-Tribune's position on South Africa?)