No dragons here.

PUBLIC discourse seems monopolized by strange and irrational anthropomorphisms. Politicians talk as if companies--without people--were living, breathing things. Some companies, such as those in the ever-suffering steel sector, are cast as patriotic foundations of our economy; others receive quite the opposite treatment. For committing the sin of impressive profitability, Dr. Jekyll companies are transformed before our eyes into dangerous Mr. Hydes.

The latest victims of this phenomenon are the oil companies. As gasoline prices edge higher, companies such as Exxon-Mobil have become easy targets for government attention. Some especially zealous regulators are calling for a punitive windfall-profits tax. It is as though American consumers were under siege by some fearsome oil-breathing dragon, which can be vanquished only by the lances of IRS knights.

Companies do not, of course, have independent characters. They are simply collections of citizens. Some are workers, others investors. None of them deserves the abuse hurled at them by politicians.

Policies aimed at evil corporate beasts actually harm individual Americans. As the accompanying chart indicates, this is a particularly salient consideration when it comes to oil and gas companies. In a recent study, economists Robert Shapiro and Nam Pham examined who would bear the brunt of a windfall-profits tax. They found that over 40 percent of oil and gas shares are held in public, private, and individual pension funds. This amounts to about $300 billion in equities.

A windfall-profits tax would reduce the value of oil and gas shares by as much as 11 percent. And that damage would spread beyond those with juicy private pensions. Shapiro and Pham point out: "Public employee pension plans are especially vulnerable to the costs of a windfall-profits tax, because they hold a relatively large share of their assets in corporate stocks, including shares in domestic oil and gas companies." These pension funds hold about $64 billion worth of U.S. oil stocks.

This means that policies aimed at the mythical oil beasts would in fact undermine the retirements of soldiers, policemen, firemen, and so on. They would also, as Shapiro and Pham document, discourage oil-company managers from investing in new sources of energy.

High energy prices are a hardship, but they are caused by the surging world demand that goes along with robust economic growth. The fact that American companies are in a position profit from the higher prices is certainly better than the alternative.

Politicians on both sides of the aisle who would never think attacking American citizens feel quite comfortable attacking American corporations. They need to pause, take a deep breath, and recognize that corporations are simply collections of citizens. And the most successful companies are more aptly characterized as heroes than monsters. If profits soar, this should prompt celebration rather than legislation.

SHARE OF OIL SECTOR'S MARKET VALUE (2004)

All Other Holders                               59%
Pension Plans and Retirement Account Holdings   41%
  Private Pension Funds                         15%
  Public Pension Funds                          12%
  IRAs                                          14%

Note: Table made from pie chart.