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Granholm’s grandstanding

Posted by Richard on April 29, 2006

Michigan Gov. Jennifer Granholm, who’s apparently facing a tough reelection battle, came up with her own twist on the current fervor for gas price demagoguery. Her particular bit of grandstanding consists of an online petition at the governor’s official website calling for a cap on oil company profits.

Who would that hurt? Well, according to the Detroit News, Michigan’s teachers and civil servants, for starters:

ExxonMobil Corp. is the largest stock held by the Michigan State Employees’ Retirement System and the Michigan Public School Employees’ Retirement System. At the end of 2005, the state pension funds owned more than 13 million shares of the oil company’s stock with a market value of more than $846 million.

Since January, the value of Michigan’s ExxonMobil portfolio has increased more than $79 million. In dividend income alone, Michigan earned more than $15 million last year from its Exxon stock, which has helped fund the benefits the state’s public school teachers, other state employees and their beneficiaries enjoy.

But that’s of little concern to Granholm, who would apparently rather grab headlines in an election year than protect the pensions of state employees. There are more than 570,000 people (retirees, beneficiaries and active and inactive vested members) who are affected by the two state funds, according to the state’s annual financial reports of the systems.

Of course, Michigan public sector employees aren’t the only ones. The odds are that if you’re participating in any pension or retirement plan, you too are a beneficiary of those "record profits" in the oil industry (it would be hard to find a pension fund or broadbased equity mutual fund that had no direct or indirect investment in the oil and gas industry). If you’re not, why not?

You know, for the price of that flat-screen TV you’ve been eyeing, you can buy 50 or more shares of ExxonMobil. Then, when they pay their next quarterly dividend, you can smile. Or maybe complain about how high ExxonMobil’s taxes are and worry about their shrinking profit margin (see my Thursday post).

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