The Gap Will Widen

Updates

July 31, 2013: Yes, the gap has widened. An inconvenient truth.


Later, 10:35 CDT: wow. It just keeps getting better. I forgot how I got started on "the gap will widen."

Oh, that's right -- about divesting one's portfolio of XOM. After posting that subject line, "the gap will widen," it appears that is the White House talking point for the week. Wow. The gap will widen. Wait until they grant amnesty to 11 million Americans who are allegedly here illegally. Wait until more workers are moved from full-time work to part-time work due to ObamaCare.

The New York Times is taking up the White House talking points:

For decades after, Mr. Obama said, in places like Galesburg people “who wanted to find a job — they could go get a job.”

“They could go get it at the Maytag plant,” he said. “They could go get it with the railroad. It might be hard work, it might be tough work, but they could buy a house with it.” 

But now with ObamaCare, he could have added, Maytag won't be hiring, and the railroads won't be hiring. And if they do hire, they will do so with temps and part-time worker. Remember: the second largest employer, behind Wal-Mart, in the US is Kelly Services, a temporary work provider. 

It is very, very possible that with a new man / woman at the Fed, Obama can change course on ObamaCare and delay the individual mandate for one year. He has delayed the corporate mandate; he had to do that early so corporations could plan. But there is more time with the individual mandate. Enrollment starts in October, but penalties won't be assessed until next year, April 15, 2014, and even then the penalties are inconsequential. The decision to delay the individual mandate will be entirely political, not economic.

Moments later: it is absolutely amazing. I posted the note below just minutes ago. Returning to my mail, I received a link to this story: the gap is widening in The StarTribune: 

Four out of 5 U.S. adults struggle with joblessness, near-poverty or reliance on welfare for at least parts of their lives, a sign of deteriorating economic security and an elusive American dream.

Survey data exclusive to The Associated Press points to an increasingly globalized U.S. economy, the widening gap between rich and poor, and the loss of good-paying manufacturing jobs as reasons for the trend.

This is such an "important" story or such a "huge" story, the AP calls this an "exclusive." Wow. One has to have lived under a Geico rock not to have surmised this. And guys like McKibben are hoping to widen that gap: telling folks to divest of their very safe, high-yielding, value (and some growth) companies just to "feel good." 

Yes, the gap between the "haves" and the "have-nots" will widen. Cue up Connie Francis.

McKibben reminds me of Coleman Young. Devil's night.

Separately, the linked article spends a lot of time on Irene's plight. Read the story again, and then consider whether Irene's plight will be better or worse when 11 million "Americans" here allegedly illegally are given amnesty overnight. Just asking. 

Original Post

 

Bloomberg is reporting:

Activist Bill McKibben, who helped turn an obscure oil pipeline project into a high-profile political fight, has a new target for his effort to curb global warming: energy companies such as Exxon Mobil Corp. 

McKibben’s group, 350.org, is asking colleges, cities and churches to divest their financial holdings from a group of 200 companies that produce coal, oil or natural gas. So far six schools, 16 cities and 11 religious institutions have agreed to divest from those companies, according to his group.

“We know we can’t bankrupt Exxon,” McKibben said in a meeting with Bloomberg News in Washington. “But we think we can politically bankrupt them.”

McKibben’s group has modeled its campaign after the 1980s divestment effort aimed at companies working with the apartheid regime in South Africa. Unless these companies can be persuaded to leave 80 percent of the available fossil fuels in the ground, climate change will proceed at a pace that would be catastrophic for the planet, they say.

I think "power" has gone to his head (Keystone XL and now XOM). This is his problem. He was making money off his "stop Keystone" movement. Now that that movement is dead one way or the other, he had to come up with something else.

I believe there have been groups in the past who recommended divesting XOM, etc.

As one reader would say, "fool's errand." These church groups, universities, and feel-good investors are going to divest themselves of some good companies.

I wonder where they came up with the "leave 80% of their fossil fuels in the ground" statistic. 80%. Why not 90%. Why not 65%. What science did they use to come up with such a nice round number of 80%. 

For me, I will stick with XOM. The gap between the "haves" and the "have-nots" will widen. I'm sticking with the "haves."

Disclaimer: this is not an investment site. Do not make investment decisions based on what you read here or what you think you might have read here.