Can you remember when Republicans still believed in the free market?
It was sometime before Donald Trump started routine attacks on the “globalists” of Goldman Sachs and the leaders of large U.S. corporations; before Florida Gov. Ron DeSantis used tax policy to attack the Walt Disney Co. because it dared to disagree with his “don’t say gay” legislation; before congressional Republicans harassed social media companies and book publishers over alleged “censorship” of their views; before they threatened Delta Air Lines, United Airlines and Major League Baseball over their support for voting rights; before they vowed to use federal resources to retaliate against the U.S. Chamber of Commerce for backing a few Democrats; before Republican governors enacted laws overriding private employers’ coronavirus vaccination policies; and before GOP-led states moved to disrupt interstate commerce to block abortion access and morning-after pills.
This week brought the latest evidence that the former party of laissez-faire capitalism has reimagined itself in the image of a Soviet State Planning Committee. Republican lawmakers are now telling investors which businesses they can and can’t invest in — and which investment criteria they will be permitted to consider.
The House Oversight Committee staged a hearing to denounce asset managers for using “environmental, social and governance” criteria, or ESG, when making their investments — and to plot ways to stop investors from doing this terrible thing.
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“An unelected cabal of global elites are using ESG, a woke economic strategy, to hijack our capitalist system,” declared an overwrought Steve Marshall, Alabama attorney general and one of two GOP expert witnesses at the anti-investor hearing. For those who didn’t understand him the first time, Marshall used the word “elites” 13 times and “woke” 20 times in his opening testimony.
The other GOP witness, Utah Attorney General Sean Reyes, declared that there exists a “conspiracy” of ESG-minded investors. He was particularly worried that “asset managers who collectively own significant percentages of utilities’ stock are improperly influencing the operations of those utilities.”
Imagine that! The shareholders who own a company are trying to influence its operations! Will nobody rid us of this capitalist menace?
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Legislatures in several red states have passed laws, championed by oil, gas and coal companies, that essentially pull state pension funds from investment managers unless they invest in — you guessed it — oil, gas and coal companies. Similar laws bar pension plans from working with investment firms that use ESG standards when deciding whether to invest in companies that trash the planet, abuse their workers or kill their customers. Led by Marshall and Reyes, 25 state attorneys general sued the Biden administration to block a regulation that allows retirement-plan investors to consider ESG standards. The rule doesn’t mandate that investors do so. It merely gives them the option.
The Democrats’ witness, Illinois treasurer Michael Frerichs, called the Republicans’ schemes “anti-free market and anti-investor.” The GOP officials would block asset managers from even considering whether a car company “is aligned with market expectations and preparing for the shift to electric vehicles,” whether a pharmaceutical company “has exposure to massive lawsuits because of its role in the opioid epidemic” or whether “health-care companies understaff their operations and jeopardize the safety of patients.” Said Frerichs: “ESG is simply additional information that investment professionals use to assess risk and return prospects.”
Apparently, a lot of investors agree with him, because the accountancy PwC expects ESG-related assets under management to grow to $33.9 trillion by 2026, or about one-fifth of the worldwide asset-management total. ESG, lamented Oversight Committee Chairman James Comer (R-Ky.), “is gaining ground on Wall Street.”
And Republicans are determined to stop the free market — no matter how much it costs.
A study by the University of Pennsylvania’s Wharton School and a Fed economist, for example, calculated that an anti-ESG law in Texas will cost the state $303 million to $532 million in additional interest annually. The Kansas Public Employees Retirement System said anti-ESG legislation there could cause more than $1 billion in losses from early sale of assets and reduce returns by $3.6 billion over a decade. Public pension systems in Arkansas said an anti-ESG bill there would cause them to lose at least $37 million per year.
In the end, the GOP’s anti-capitalist binge is about culture, not economics. Rep. Glenn Grothman (R-Wis.) expressed his concern that ESG considerations would work against “certain disfavored groups in our society. People don’t like men. People don’t like people of European background.” ESG investors, he argued, “are the type of people who judge people by where their great-great-grandparents came from.” Other Republicans on the panel used their time to denounce the perceived “woke” wrongs of JPMorgan Chase, Nike, Anheuser-Busch and others.
Frerichs, a Democrat, pointed out the absurdity “of me defending the free market against a Republican legislature trying to have a planned economy mandating what businesses have to invest in.”
But the irony was lost on Comer, who tried to draw a link between his anti-capitalist crusade and his simultaneous attempt to prove wrongdoing by President Biden and his family. “We just had a press conference and showed bank records that showed the Biden family getting millions of dollars from places like China,” he said. “I wonder what types of ESG policies China” has.
China doesn’t have ESG standards, Mr. Chairman. It’s an authoritarian country with a state-run economy. Our free-market economy, which lets investors make choices free of the heavy hand of government, is vastly superior. I remember when Republicans used to think so, too.
It was sometime before Donald Trump started routine attacks on the “globalists” of Goldman Sachs and the leaders of large U.S. corporations; before Florida Gov. Ron DeSantis used tax policy to attack the Walt Disney Co. because it dared to disagree with his “don’t say gay” legislation; before congressional Republicans harassed social media companies and book publishers over alleged “censorship” of their views; before they threatened Delta Air Lines, United Airlines and Major League Baseball over their support for voting rights; before they vowed to use federal resources to retaliate against the U.S. Chamber of Commerce for backing a few Democrats; before Republican governors enacted laws overriding private employers’ coronavirus vaccination policies; and before GOP-led states moved to disrupt interstate commerce to block abortion access and morning-after pills.
This week brought the latest evidence that the former party of laissez-faire capitalism has reimagined itself in the image of a Soviet State Planning Committee. Republican lawmakers are now telling investors which businesses they can and can’t invest in — and which investment criteria they will be permitted to consider.
The House Oversight Committee staged a hearing to denounce asset managers for using “environmental, social and governance” criteria, or ESG, when making their investments — and to plot ways to stop investors from doing this terrible thing.
Follow Dana Milbank's opinionsFollow
“An unelected cabal of global elites are using ESG, a woke economic strategy, to hijack our capitalist system,” declared an overwrought Steve Marshall, Alabama attorney general and one of two GOP expert witnesses at the anti-investor hearing. For those who didn’t understand him the first time, Marshall used the word “elites” 13 times and “woke” 20 times in his opening testimony.
The other GOP witness, Utah Attorney General Sean Reyes, declared that there exists a “conspiracy” of ESG-minded investors. He was particularly worried that “asset managers who collectively own significant percentages of utilities’ stock are improperly influencing the operations of those utilities.”
Imagine that! The shareholders who own a company are trying to influence its operations! Will nobody rid us of this capitalist menace?
Press Enter to skip to end of carousel
Legislatures in several red states have passed laws, championed by oil, gas and coal companies, that essentially pull state pension funds from investment managers unless they invest in — you guessed it — oil, gas and coal companies. Similar laws bar pension plans from working with investment firms that use ESG standards when deciding whether to invest in companies that trash the planet, abuse their workers or kill their customers. Led by Marshall and Reyes, 25 state attorneys general sued the Biden administration to block a regulation that allows retirement-plan investors to consider ESG standards. The rule doesn’t mandate that investors do so. It merely gives them the option.
The Democrats’ witness, Illinois treasurer Michael Frerichs, called the Republicans’ schemes “anti-free market and anti-investor.” The GOP officials would block asset managers from even considering whether a car company “is aligned with market expectations and preparing for the shift to electric vehicles,” whether a pharmaceutical company “has exposure to massive lawsuits because of its role in the opioid epidemic” or whether “health-care companies understaff their operations and jeopardize the safety of patients.” Said Frerichs: “ESG is simply additional information that investment professionals use to assess risk and return prospects.”
Apparently, a lot of investors agree with him, because the accountancy PwC expects ESG-related assets under management to grow to $33.9 trillion by 2026, or about one-fifth of the worldwide asset-management total. ESG, lamented Oversight Committee Chairman James Comer (R-Ky.), “is gaining ground on Wall Street.”
And Republicans are determined to stop the free market — no matter how much it costs.
A study by the University of Pennsylvania’s Wharton School and a Fed economist, for example, calculated that an anti-ESG law in Texas will cost the state $303 million to $532 million in additional interest annually. The Kansas Public Employees Retirement System said anti-ESG legislation there could cause more than $1 billion in losses from early sale of assets and reduce returns by $3.6 billion over a decade. Public pension systems in Arkansas said an anti-ESG bill there would cause them to lose at least $37 million per year.
In the end, the GOP’s anti-capitalist binge is about culture, not economics. Rep. Glenn Grothman (R-Wis.) expressed his concern that ESG considerations would work against “certain disfavored groups in our society. People don’t like men. People don’t like people of European background.” ESG investors, he argued, “are the type of people who judge people by where their great-great-grandparents came from.” Other Republicans on the panel used their time to denounce the perceived “woke” wrongs of JPMorgan Chase, Nike, Anheuser-Busch and others.
Frerichs, a Democrat, pointed out the absurdity “of me defending the free market against a Republican legislature trying to have a planned economy mandating what businesses have to invest in.”
But the irony was lost on Comer, who tried to draw a link between his anti-capitalist crusade and his simultaneous attempt to prove wrongdoing by President Biden and his family. “We just had a press conference and showed bank records that showed the Biden family getting millions of dollars from places like China,” he said. “I wonder what types of ESG policies China” has.
China doesn’t have ESG standards, Mr. Chairman. It’s an authoritarian country with a state-run economy. Our free-market economy, which lets investors make choices free of the heavy hand of government, is vastly superior. I remember when Republicans used to think so, too.
