Let's stipulate that President Clinton, who has proposed investing Social Security trust fund money in the stock market, really won't have anything to do with it. He'll be out of office long before anything of the sort will happen. Rather, responsibility for implementing the plan would go to Vice President Gore, should he get the promotion he's been angling for. And how do you suppose he'll do it?
Would Gore take the advice of Jesse Jackson? Recently, Jackson told the House Ways and Means Committee that the federal government should use its ownership of stocks as a vehicle for furthering noble goals. Such investment could be used, Jackson suggested, against tobacco companies or folks who "poison the environment."
The amount of cash that would be at federal disposal (roughly 5 percent of the current valuation of all commonly traded equities) would allow purchase of a controlling interest in just about any company. As principal stockholder, the government could then vote, say hypothetically, a coal company out of existence. Or it could make it halt mining activity and start producing windmills. It could then subsidize that wildly inefficient and unreliable way of producing electricity to the point of putting coal-fired utilities out of business. The possibilities are endless and require little imagination.
Would the vice president like to do that? In his 1992 bestseller, Earth in the Balance he wrote (on page 272 of my paperback edition) that protecting the environment and stopping global warming should be the "central organizing principle of our civilization." On the next page he tells us what that means:
"Adopting a central organizing principle … means embarking on an all out effort to use every policy and program, every law and institution, every treaty and alliance, every tactic and strategy, every plan and course of action … to halt the destruction of the environment."
Well, if writing a bill to invest Social Security funds in the stock market isn't a "policy," a "program," a "law" applied to an "institution," a "tactic," and/or a "strategy," I don't know what it is. And if the "central organizing principle" doesn't apply here, well, where on God's getting-greener (thanks to carbon dioxide and global warming) earth does it?
On page 320 of the same volume, Gore gives us the plan. It includes "tax incentives for new technologies." President Clinton proposed some of those to fight global warming in his recent State of the Union speech.
Gore also proposes "bans" on "research and development" involving "old technologies." There's certainly no constitutional way for the government to prevent someone from doing research (we presume Mr. Gore, having spent a little time in law school, has some grasp of the Constitution's protections) on, say, coal-fired electricity production, so he must have another mechanism in mind. Like maybe a little pressure from the principal stockholder in our hypothetical coal company.
Three lines later, he says that the government should create "the promise of large profits in a market certain to emerge as older technologies are phased out." How does one do that? First, have the big federal stockholder tell all those energy companies to stop doing research on product development (i.e., to go out of business). Now that we've gotten rid of hypothetical coal companies, who is left to produce electricity? Whomever they are -- natural gas people, windmillers or whatever -- they'll now be de facto guaranteed huge profits because the competition was just forced out of business.
The fact is that 56 percent of this nation's electricity is currently produced by the combustion of coal. That's up several percent in recent decades, mainly because coal is cheap, abundant and can now be burned very cleanly. About the only emission that comes out of the newest plants is carbon dioxide, the cause of dreaded global warming.
What kind of political support might an investment program to get rid of coal enjoy? For decades, the competing, but more expensive, power sources, such as natural gas, nuclear and solar, have sought to find a way to commandeer a chunk of coal's 56 percent of the energy pie. They'll be out PAC-ing for the Social Security investment bill in less time than it took Mr. Gore to write the words "promise of large profits."
The only losers will be everyone else, forced to pay more for electricity by a government that now has been granted the power, in one fell swoop, to do whatever it pleases to whomever it wants.