IMHO: No One (Else) To Blame

Not that we haven't dealt with this kind of thing before—but in the past, there generally seemed to be a reasonable explanation, whether it be a deliberate shift by OPEC, refineries shut down by a hurricane, or some kind of political turmoil in some far-off nation.   This time, we have a series of potential "culprits"—the new economies in India and China, government taxes, greedy oil companies, irresponsible automobile manufacturers, unresponsive legislators, and, more recently, underinflated tires, and even speculative pension fund investments.   It seems like everyone—and no one—is to blame for our current predicament (and, as painful as the current situation is, just wait until winter).  

Some politicians have already picked up on the shift—and, with luck, their August recess will help them better understand just how angry the American people are about the situation.   I wouldn't for a minute suggest that our current energy pricing issues can be talked into submission—but it is intriguing how just talking about actually doing something in the short term has already served to bring down oil prices.  

Talking Points

There are similar motivations at work in the DoL's recent fee disclosure proposal (see IMHO: "Know" Way ).   Not that speculation has (yet) been accused of driving up 401(k) fees—but the DoL specifically states that the proposal's required disclosures "…[are] expected to result in the payment of lower fees for many participants."

I'll get to how much lower in a minute, but it's worth considering just exactly how much it may cost us to achieve those savings—in no small part because most of the 103-page document that brought that proposal to light is consumed with outlining the various costs and benefits projected to result from the new rules.   Suffice it to say, it's going to be expensive.   In fact, under Executive Order 12866, the DoL has determined that this action is "significant" because "it is likely to have an effect on the economy of more than $100 million in any one year."

How much more?   The present value of the costs over a 10-year period is projected to be more than $750 million.   On the other hand, the present value of the projected benefits is expected to be about $6.9 billion.