June 1, 2022

The greatest enemy of America’s financial future is not any foreign nation, government regulator, or dangerous ideologue. The existential threat to America today is the “woke” financial establishment. It is presently politicizing business and weaponizing investment in policies that will have a devastating effect on America and the world.

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Big business has always tended to be politically liberal. Over the decades, major companies have supported causes that seemed to work against their self-interest. Such action has rarely prevented them from registering profits or jeopardizing stockholders’ investment. Many thought that by groveling to these leftist causes, they might buy the support of rich liberals and favorable media. There was always a calculation with an eye on a return on investment.

Moreover, these causes are very unpopular among American consumers and the general public. Companies used to exercise some caution, fearing the backlash from appearing too radical. The danger of the saying “go woke, go broke” was only too real.  

Introducing New Tactics to Force Compliance

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However, those pushing for change are now employing different tactics that sidestep public rejection. The forces being brought to bear upon corporate America come not from woke corporate boardrooms but activist index funds suddenly empowered as enlightened “stakeholders.” Politicized investment managers want to call the shots and push companies to tow the leftist line.

The new financial offensive seeks to destroy from within the powerful yet staid business establishment. Turning corporate America against itself is the way liberals hope to hasten the process of making everyone “woke” real fast.

The strategy involves changing the metrics by which investors evaluate companies. Traditionally, corporations sought to safeguard shareholder investment by following financially sound practices and minimizing significant risks.

Introducing the ESG Rating System

The new metrics are ideological, not financial. Thus, profits are at the bottom of the list of priorities while politically correct positions occupy the top.

The key component of this strategy is the ESG rating system. This recent social credit system evaluates firms on their compliance with environmental, social, and governance (ESG) targets. A company may have a stellar balance sheet, but if its ESG rating is less than perfect, it can lead to the choking off of credit or investment opportunities. Worse yet, investment managers controlling vast numbers of shares can use the ESG ratings against corporate boards during shareholder meetings to force compliance with liberal causes.