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Economy and Society: Opposition to Federal Reserve nominee continues – Ballotpedia News  Ballotpedia NewsEconomy and Society: Opposition to Federal Reserve nominee continues – Ballotpedia News  Ballotpedia NewsEconomy and Society: Opposition to Federal Reserve nominee continues – Ballotpedia News  Ballotpedia News

Impact Investing Forum 2024

London. April 24-25, 2023.

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Economy and Society is Ballotpedia’s weekly review of developments in corporate activism, corporate political engagement, and the Environmental, Social, and Corporate Governance trends and events that reflect the growing intersection between politics and business. ESG Developments This Week in Washington, D.C. ESG-related Opposition to Federal Reserve Nominee Continues Responses to President Biden’s nomination of Sarah Bloom Raskin as the Federal Reserve’s Vice Chairman for Supervision continued last week. The Competitive Enterprise Institute joined with the American Energy Association on February 1 to send a letter to Chairman Sherrod (D-OH) and Ranking Member Pat Toomey, (R-PA) opposing Raskin’s confirmation. Thomas J. Pyle, Myron Ebel, and John Berlau from CEI signed the letter. It stated that “Ms. Raskin supports the Federal Reserve’s powers beyond its statutorily-defined roles. Any senator should be committed to executing law and not to pursuing personal vendettas against certain types. “As we have already noted, almost 80 percent of America’s energy comes from natural gas and oil. The economic consequences of failing to stop financing these industries could be dire, as we are seeing in Europe. “We urge President Biden not to nominate Ms. Raskin and, if he doesn’t, we ask the committee to vote against her nomination. Congress has charged Federal Reserve with maintaining a stable environment for effective operation of the financial systems. However, this is not the same as actually directing capital flows as Ms. Raskin would prefer to do. Ms. Raskin’s confirmation is a recipe for financial stability.” CEI also issued a press release offering additional comment from its policy analysts. Myron Ebell, Director of CEI’s Center for Energy and Environment, stated that “As late 2020, Sarah Bloom Raskin demanded that the Fed actively discriminate against coal, oil, and gas firms in its lending programs. If she is confirmed as Vice Chair of Supervision, she could make banks with these financial services unavailable to the detriment to the entire economy. The Senate must reject her nomination. It must stand up for ordinary Americans consumers, investors and entrepreneurs still reeling after the pandemic, and the onslaught caused by inflation. On Thursday, The Wall Street Journal’s editorial board joined those who opposed Raskin’s nomination. They wrote that while markets and businesses have many risks, President Biden is adding another: Sarah Bloom Raskin. His nominee for Federal Reserve’s bank supervision position wants to use regulation to allocate credit in a way that could create systemic and political financial risks. Ms. Raskin attempted to retract her statements supporting climate financial regulation at her Senate confirmation hearing. She told the Banking Committee that it was inappropriate for the Fed’s credit decisions and allocations to be based on picking winners and losers. Her denial isn’t credible given her long-time views…. Her statements highlight her distorted view on the Fed’s mandate to maintain stable prices and promote full employment. She believes it should include credit allocations governed by regulatory policy, as well as emergency financial tools ….. Ms. Raskin claims she is trying to reduce financial risk and punish fossil fuels. However, the regulation she is urging could be a major cause of such risk. It would require banks to liquidate fossil-fuel assets and force them to write them down. It would reduce capital for companies, increasing the risk of them and their creditors going bankrupt. It would also encourage banks to make more risky green-energy investments in order to have less capital and pay higher dividends . The Senate should send Mr. Biden an email to let him know that it doesn’t want a Fed which punishes American industries that employ millions of Americans simply because they aren’t popular on the left. Ms. Raskin poses a threat to the economy as well as the Fed.” ESG-related criticisms of BlackRock’s Larry Fink. On February 7, three week after BlackRock chief Larry Fink published his annual letter to CEOs released, The Wall Street Journal published Vivek Ramaswamy’s op-ed. He criticized Fink for substituting his political purposes for those of publicly traded corporations. “Mr. Fink claims that he wants CEOs that are true to the purpose of the companies they manage, but also demands that they advance the corporate goals that BlackRock supports. He can’t have both ….. Mr. Fink claims that he doesn’t force BlackRock’s values onto anyone. He encourages portfolio companies adapt to the direction the world is heading. “Every company and industry will be transformed by a transition to a net zero global. The question is: Will you lead or will you be led? . . . Will you follow the path of the dodo or the path of the phoenix?” But Mr. Fink’s argument seems circular. BlackRock, which manages $10 trillion in assets, is the world’s biggest asset manager. Recent BlackRock alumni heavily influence President Biden’s climate policies. Brian Deese is the National Economic Council’s former global head for sustainable investing. Michael Pyle, BlackRock’s former chief investment strategist worldwide, is Vice President Kamala Harris’s chief economic advisor. Wally Adeyemo is the former chief of staff for Mr. Fink and is now deputy Treasury secretary. His claim that he is only responding to the “transition towards a net zero world”, obscures his firm’s role in facilitating that transition ….. If stakeholder capitalism is capitalism as Mr. Fink claims, then the public should know why he insists on this distinction. He should be open about whether he wants BlackRock portfolio companies to pursue their corporate purposes or those of BlackRock. RealClear Politics published an article co-authored by Andy Puzder, former CEO of CKE Restaurants and chairman of 2ndVote Advisers. Stephen Soukup is the author of The Dictatorship Of Woke Capital, which is critical of ESG. The two authors argue that Fink’s view of stakeholders is a pretext to politicize capital markets and point out that BlackRock’s CEO has caused anti-ESG sentiment among some state officials. Fink believed that ESG, sustainability, and the agenda for “woke capital” would be the dominant factors in the markets for many years. He and his $10 trillion asset-management company would then dominate them. Fink was to be the king of all stakeholder groups. Then, something amazing happened. Encounter Books published “The Democratic Rule of Woke Capital” shortly after Fink’s 2021 triumphant letter. This book was the culmination of a massive backlash against ESG, woke capitalism, and the hubris that drives top-down, antidemocratic efforts to subvert free-market capitalism to partisan ideological ends. The resistance to ESG had grown in strength and variety by the end of the year. Everybody, from shareholder activists to U.S. senators and state treasurers, legislators and governors, along with the former director for “sustainable investing” at BlackRock, were plotting various forms of resistance against the newly woke masters in the financial universe ….. Texas passed legislation that prohibits companies from doing business in Texas if they engage in political vendettas against gun or oil companies. Lt. Gov. Dan Patrick asked the state’s comptroller for BlackRock to be added to this list. The Board of Treasury Investments in West Virginia, which manages $8 billion of state operating funds, announced that BlackRock will no longer do business with them. This is because the Board embraces “net zero” investment strategies that harm the energy sector and “while increasing investments into Chinese companies.” Florida Governor. Ron DeSantis, the trustees of the State Board of Administration voted “clarify the state’s expectation that all funds managers should act solely for the financial benefit of the state’s funds” and removed “all proxy voting authority of other fund managers,” including BlackRock. The board also voted “to conduct a survey to determine how many assets China has in Chinese companies It is a positive development that some countries are responding to this attack against free market capitalism. These state actions are necessary but not ideal. It would be better to get politics out the business and not make capital markets partisan or ideological battlefields. However, it is possible to make the necessary changes only by imposing financial costs on Fink’s ilk. Bloomberg reported on February 3 that ESG funds had taken a hit due to this year’s market volatility. They could be in for more turmoil if markets remain unstable: “Investors are losing their desire to do good in the market downturn. Inflows to U.S. exchange traded funds that have higher governance, environmental, and social standards have fallen sharply over the past two months. ESG equity ETFs saw an 89% increase in their value in December and January, compared to $10.8 billion in the same period a year ago. Volatility has whippedsawed markets as investors price stocks to counter inflation risks and Federal Reserve hawkishness. The benchmark S&P 500 Index suffered its worst January since the outbreak of the pandemic. Meanwhile, the tech-heavy Nasdaq 100 saw a 11% drop from its November peak. Victoria Greene, chief investor officer at G Squared Private Wealth, said that ESG investing can become “a backseat” during times of turmoil. Greene stated that ESG investors can lose money, despite all the benefits. “Your first priority should be protecting your portfolio. Then, your second priority should be your investment strategy, which includes ESG.” Investors tend to focus on performance, and ESG topics tends to drop in interest. …. Media mentions of ESG have fallen with every drop in the S&P 500. Athanasios Pisarofagis, Bloomberg Intelligence’s ETF analyst, stated that ESG funds must continue to outperform other funds in order to sustain inflows. According to data compiled BI, only 29% of ESG ETFs outperformed the performance of S&P 500 in 2021 compared to 57% in 2020. Investors might become fed up if the ESG sector doesn’t keep up with the market,” he said. According to data compiled by BI, only 29% of ESG ETFs beat the performance of the S&P 500 in 2021, compared with 57% in 2020. There are more companies pledging voluntary net-zero pledges. Consumer awareness is growing and regulatory pressures are increasing. She stated that this suggests a dominant investment theme in the future, with capital moving at an unprecedented pace to fund innovations and renewable technology.
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Read MoreEconomy and Society: Opposition to Federal Reserve nominee continues – Ballotpedia News  Ballotpedia News


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