Well, there they go again.
Woke executives have noticed that vast swathes of Americans aren’t much interested in their proposed future – one full of renewed discrimination, carbon-constrained lives and bug-based protein, amongst their other dystopian (for the masses, anyway; private jets and executive salaries for them) dreams.
State elected officials have begun pointing out, quite rightly, that the attempts of woke executives to usurp the power of ultimate investors for their own personal benefit violates their fiduciary duties, opens them up to lawsuits and begs for addition legislation to restrain their attempted insurrection from the C-suites.
In what is by now entirely predictable form, the CEOs’ first response was to make absurd assertions about what capitalism means, and how to do it correctly. (I don’t call these assertions lies because I’m not absolutely sure that they don’t believe them. Recall that Barack Obama explained his … unique … affect with the revelation that “[y]ou know, I actually believe my own bullshit.” It’s entirely possible that these new malefactors of usurped influence have likewise taken to believing their own nonsense, at least as far as is necessary to hide from themselves their own villainy.)
The always offensive Mike Bloomberg was the first into the fray. He wrote an op/ed for his own site, picked up elsewhere, that began:
Republican elected officials seem to think they’ve found three new evil letters to pair with their favorite bugaboo, CRT, or critical race theory. This one is called ESG, which refers to investment strategies that consider environmental, social and governance issues. Critics call it “woke capitalism.” There’s just one problem: They don’t seem to understand capitalism. And flogging ESG is not only a terrible economic mistake. It will be a political loser, too.
Where to begin? As a starter, this paragraph alone demonstrates that Bloomberg doesn’t understand either American history or the nature of free society. Formal, de jure discrimination is a fundamental wrong that this country has long fought to put behind us. Critical race theory teaches equity and related doctrines that demand the return of legal, systemic discrimination on the basis of race, with sister ideologies demanding the same on the basis of sex and orientation.
The fact that Bloomberg considers this nothing but a “bugaboo” demonstrates his moral vacuity, something that was also on full display during his disastrous run for the Democratic nomination in 2020. And that flaming failure also undermines anything he might have to say about what positions will make political losers; political losers themselves are definitely not the best judges of such things. (Yes, Bloomberg won the mayoralty of New York three times, but the first time was in the aftermath of the 9/11 attacks and on Rudy Giuliani’s coat tails, and in later races he beat Bill De Blasio-level lunatics. This doesn’t suggest he has much insight into the politics of the republic generally.)
Finally, the notion that failing to accept climate-catastrophist decarbonization plans will lead to economic disaster is preposterous. Bloomberg is a U.N. climate envoy, and so touts the U.N. climate panel’s findings and recommendations as though they are fact. But they are nothing of the sort. They are based on maximalist-outlier models – the predecessors of which have been shown to be wrong in the past – and even then, they indicate that drastic changes in carbon emissions will only cause very small changes in climate. They don’t take any account of the fact that the developing world has absolutely no intention of decarbonizing, which make the West’s efforts pointless. And they fail to recognize that “renewable” energy is itself dirty, not reliable, and cannot provide the energy the world needs, either now or into the foreseeable future.
As Jamie Dimon rightly put it at a recent House Oversight Committee hearing, decarbonization on Bloomberg’s and the U.N.’s schedule leads down the “road to hell for America.” Of course, Dimon’s preferred response, a “Marshall Plan” for American energy – which is to say state planning of the energy economy – is also not capitalism and is certainly not wise. But at least he understands that the U.N. is spreading unicorn dung with its decarbonization demands.
Which brings us back to Bloomberg’s claim about capitalism. He asserts that “[t]he fact is: Climate risk is financial risk,” and then insists that states may not step in to stop BlackRock and the investment houses and Bank of America and the other too-big-to-fail banks from forcing political-schedule decarbonization economy-wide. But he spends the rest of the article making dubious statements about the environment, misusing polling data, and otherwise completely failing to consider the massive factors that work against his position, particularly those cited above.
It is true that climate risk is financial risk, but the primary “climate”-related risk to companies now is the risk of following the U.N.’s climate-catastrophist models and Bloomberg’s own profoundly biased and non-objective climate-disclosures task force’s recommendations without considering all of the relevant data and contributing factors.
As noted above, there’s very good reason to believe that nothing the West can do can make any material difference to anything. If that’s the case, then the real “climate risk” arises from following these organizations’ recommendations. Meanwhile, energy risk is also a financial risk, including the risk that the energies the climate catastrophists want us to shift to simply can’t provide either reliable constant energy or the amount of energy the world needs to continue to function profitably – or even to avoid global economic catastrophe.
Corporate executives, and particularly those executives that invest other people’s money, have a fiduciary duty to consider all relevant risks objectively, without bias and without ignoring facts that inconveniently contravene the executives’ personal policy preferences. Larry Fink at BlackRock knows this, which is why BlackRock waded into the argument as well to make assertions similar to Bloomberg’s – claims that carried the same bias and the same flaws.
At the heart of BlackRock’s defense lay this statement: “Governments representing over 90% of global GDP have committed to move to net-zero in the coming decades. We believe investors and companies that take a forward-looking position with respect to climate risk and its implications for the energy transition will generate better long-term financial outcomes. These opportunities cut across the political spectrum.”
This is simply tendentious. In the United States, for instance, the current president has made verbal commitments that he cannot keep, while Congress has steadfastly refused to approve any climate treaty, ever. When administrative control next shifts, that verbal commitment will be flipped.
In China, meanwhile, the Communist Party dictator occasionally parrots the climate catastrophists, but in practical fact is opening more coal-powered plants every year than the West still has, and has committed internally to prioritizing economic growth over decarbonization. India, soon to be the world’s most populous country, has flatly refused to sign up to constrain its growth by following the U.N.’s script. And then, of course, there’s Russia.
Those considerations alone make an entire mockery out of BlackRock’s claim. That BlackRock has failed to understand the spuriousness of the claim, and of so much else of its slanted climate-risk analysis, is itself a profound breach of its fiduciary duty.
The state officials who warned Fink and BlackRock that they are violating their fiduciary duties understand capitalism quite well. They understand that corporations and investment houses are bound by fiduciary duties that are violated when corporate executives betray their duty of care to investors and to shareholders by failing to treat all risks equally and weight them by complete and objective research. Directors betray their duty of loyalty when they allow their personal policy preferences to render their risk analysis biased, skewed and incomplete.
State officials have begun stepping in to protect state monies from being invested in, with and by companies like BlackRock that are flagrantly violating those duties. With luck and fortitude, they will clarify or strengthen their states’ fiduciary or investor-protection laws, unleashing individual investors to keep corporate executives to their duties, if necessary by draining their personal bank accounts to pay damages for having breached those duties.
What Bloomberg and Fink think is capitalism is nothing more or less than rule by a jacked-up, self-appointed noble class, one that can command according to their personal whim rather than with full respect for the genuine capitalists (the investors and shareholders) and their objective interests. Bloomberg, safe atop his private company like the little man atop a wedding cake, won’t face many consequences other than public embarrassment for this profound conflation. Fink, Moynihan and the other CEOs who have subordinated their duty to their whim, though, must trod a rockier landscape.
Watch out for a cliff that may lie not too far ahead, gents.