A tempting target…

Back in April, Senators Jeff Merkley of Oregon and Maggie Hassan of New asked the GAO to launch a study on “risks that fossil fuel stocks currently present” to those invested in the federal government’s Thrift Savings Plan (TSP). The distinguished senators then go on to imply that the TSP should create funds that “incorporate climate change risk” as part of the 401-k style program’s offerings.

Part of the allure of the TSP is its remarkably small fee structure – it’s very cheap in comparison to many other funds. Fees are low, in part, because TSP is simple. It’s got five basic index funds and five “lifecycle funds” that automatically reallocate participant’s money based on target dates. It’s got an elegant simplicity that’s historically effective at creating wealth for its participants over their long careers.

Look, I accept that climate change is a real thing. I also don’t have any particular love of the energy sector – many leaders in the area are losing value. That’s my real issue with them, though. If we’re going to drop energy companies from a portfolio, do it because they’re not making us money – not because some holier-than-thou senator wants to score a few political points.

Congress never saw a big pot of money sitting around that it didn’t want to stick its whole hand into. With $500 billion in assets under management I can understand why the TSP is an awfully tempting target. That said, the very last thing I want to see is a good thing turned on its ear by driving TSP to respond to whatever political views happen to hold sway at any given moment. Treating retirement funds as just another political football is almost a guaranteed way to manage to take another slug of cash out of my pocket.

There are already fund options out there for just about any special interest that wants to play in the market – whether your “thing” is gender diversity, sustainable energy, human rights, or a laundry list of other causes. TSP should remain a broad-based set of fund options targeted at replicating the market overall and building wealth over time for the wide swath of federal employees. Catering to the few individuals who can’t seem to be satisfied with that just doesn’t make senses… unless of course you’re more interested in enforcing ideological purity than in making good financial decisions. Surely no member in the United States Senate could ever be accused of that.

Jefferson-Jackson Day…

A few weeks ago the New Hampshire Democratic Party’s hosted it’s annual dinner. The only reason anyone outside of New Hampshire payed attention to it is because Alec Baldwin was the keynote speaker and offered up a firebrand soundbite that said in part, “we need to overthrow the government.” I’m utterly indifferent to Alec Baldwin and his speech isn’t what really caught my attention in the article from the Union Leader.

The thing I found interesting was the trouble New Hampshire Democrats seem to have at leaving the “name” of their dinner alone. Once upon a time it was known as the Jefferson-Jackson Dinner.” Of course the Democratic Party no longer celebrates Jefferson or Jackson, despite their being lions of the young Democratic Party. In 2016 it became the Kennedy-Clinton Dinner. By 2018 throwing over Jefferson and Jackson for two of the 20th century’s noted philanderer presidents suddenly felt like a bad idea too. So this year they settled on hosting their first annual Eleanor Roosevelt Dinner. She’s at least a (mostly) non-controversial figure in Democratic circles.

I only note this because I’ve been watching the great upswell over the last several years that tells us we’re supposed to be embarrassed by our history – that we should hide it, hide from it, and only dare speak of it in hushed tones. Well, I suppose Democrats in New Hampshire are free to be embarrassed by whatever ruffles their garters. If men like Jefferson and Jackson are no longer welcome in their pantheon of heroes, they’re surely welcome to find a home in mine.