Emulating New York and California, two deep-blue states with mammoth unfunded pension liabilities, Chicago Mayor Rahm Emanuel (D) has hectored a $5 billion pension fund into divesting its holdings in companies that manufacture firearms. Now he is urging two large banks to deny financing to such companies “that profit from gun violence.” TD Bank provides a $60 million credit line to Smith & Wesson, and Bank of America provides a $25 million line to Sturm, Ruger & Co.
Chicago’s current and retired public employees might wish the
city had invested more in both companies. Barack Obama, for whom Emanuel
was chief of staff, has become a potent gun salesman because of
suspicions that he wants to make gun ownership more difficult. Since he
was inaugurated four years ago, there have been 65 million requests for background checks of gun purchasers. Four years ago, the price of Smith & Wesson stock was $2.45. Last week it was $8.76, up 258 percent. Four years ago, the price of Sturm Ruger stock
was $6.46. Last week it was $51.09, up 691 percent. The Wall Street
Journal reports that even before “a $1.2 billion balloon payment for
pensions comes due” in 2015, “Chicago’s pension funds, which are
projected to run dry by the end of the decade, are scraping the bottoms of their barrels.”
Nevertheless,
liberals are feeling good about themselves — the usual point of
liberalism — because New York state’s public pension fund and
California’s fund for teachers have, the New York Times says, “frozen or
divested” gun holdings, and Calpers, the fund for other California
public employees, may join this gesture jamboree this month. All this is
being compared to the use of divestment to pressure South Africa to
dismantle apartheid in the 1980s. Well.
Apartheid was a wicked
practice. Guns are legal products in America, legally sold under
federal, state and local regulations. Most of the guns sold to Americans
are made by Americans. Americans have a right — a constitutional right — to own guns, and 47 percent of U.S. households exercise that portion of the Bill of Rights by possessing at least one firearm.
For
Emanuel to say that gun makers “profit from gun violence” is as
sensible as saying automobile manufacturers “profit from highway
carnage” — which, by the way, kills more Americans than guns do.
Emanuel, who is more intelligent than he sounds (just as many think
Wagner’s music is better than it sounds), must know that not one fewer
gun will be made, sold or misused because Chicago is wagging its finger
at banks.
Moral grandstanding, however, offers steady work, and
the Chronicle of Higher Education reports a new front in “the battle
against climate change”: “Student groups at almost 200 colleges and
universities are calling on boards of trustees to divest their colleges’
holdings in large fossil-fuel companies.” Of course, not one share of
those companies’ stock will go unsold because academia is so righteous.
Others will profit handsomely from such holdings and from being
complicit in supplying what the world needs. Fossil fuels, the basis of
modern life, supply 82 percent of U.S. energy,
and it is projected that they will supply 78 percent of the global
increase in energy demand between 2009 and 2035, by which time the
number of cars and trucks on the planet will have doubled to
1.7 billion.
Institutions of higher education will, presumably,
warn donors that their endowments will be wielded in support of the
political agenda du jour, which might include divesting from any company
having anything to do with corn, source of the sweetener in many of the
sodas that make some people fat and New York’s mayor cranky. Or
anything to do with red meat, sugar, salt, trans fats, chickens not
lovingly raised . . . .
Liberal ethicists may decide that the only virtuous investments
are in electric cars. The Obama administration says that 1 million will
be sold by 2015. Maybe 70,000 have been so far. Just imagine how pension
funds will prosper by betting on the next 930,000.
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