Friday, August 18, 2006

Ralph Nader '55*: Threat or Menace

Well, I haven't gotten much response to my religious posts, so here's a political post.

A number of political blogs and media websites have, over the years, taken issue with Ralph Nader's financial disclosures, calling him a hypocrite, or a non-enemy of corporations, or a corporate whore, for holding stock in big corporations, some of which espouse policies which he opposes.

Ya know, you can talk about Nader stealing the election (or was that Buchanan? or Katherine Harris? or the Supreme Court? or the RNC operatives who disrupted recounts?) for Bush. You can talk about his anti-corporate stance and how genuine it is, or not. You can talk about financial decisions.

But I really don't see the crime, or even the hypocrisy, in owning individual-level numbers of shares (albeit rich-individual, you don't run for President if you're not very rich - it's very expensive to run, and very expensive to lose) in corporations with whose policy he disagrees.

You've got to remember, the stock-market, at least for us individuals, is an aftermarket. You're not paying $25,000 to Microsoft to buy 1000 shares of Microsoft, you're paying it to some other guy, or some mutual fund, who has decided to reduce his holding in Microsoft.

You buy the rights to some small percentage of the profits, and the right to vote at the annual meeting. But we all know that, absent a truly massive shareholder campaign, shareholder opinions have no chance of being heard. And many corporate meetings are set up to minimize that possibility.

Yes, it's common to say "you're investing in Microsoft", but really, you're not giving them any money, since individuals don't generally have access to IPOs.

Second, this is a mutual fund. Yet another remove from the corporation. You pay money to the fund, the fund pays some small fraction (and most mutual funds don't hold more than 2% of their money in any given stock) to buy stock in some company.

Holding a mutual fund is completely divorced from any control one might hope to gain from a company. It is also completely divorced from any control the company might wish to exert over its stockholders.

As I see it, it's completely consistent: Nader has money, and wants to make more of it. So he invests in a good mutual fund. That cleanly removes him from association with the companies owned by the mutual fund. That some pundits don't see that, seems to show their hatred of Nader overshadowing their common sense.

For instance, I own stock in various corporations which have outsourced jobs to India. As a programmer and pro-American-worker person, I oppose that. But so what? They all do it, and we keep doing business with them - the phone companies, the drug companies, the computer companies.

* * *

Update. I just checked out his 2004 financial disclosure form.

1) He has evidently sold his Fidelity-Magellan fund.

2) His holdings are mostly in technology companies: Cisco, Ciena, OpenTV, CNET. Note: he opposes offshore outsourcing, which some of these companies do.

3) His big holding is now an index fund - one which shifts stocks in & out to keep up with an index.

* * *

So what do we have? Someone who complains about corporate policy, owning stock in those companies, such that he
a) milks them for money without actually having given them any,
b) gives himself a platform such that, if he really wanted to exert himself, he could express an opinion and yet again have it ignored.

I really don't see the hypocrisy. Attack your enemies on one front, and bleed them on another. Makes sense to me.

* Nader '55: it's a Princeton thing.

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