Trump and Future Democrats Won't Need ESG

This morning's news feed coughed up something I was just about ready to concede might be good for Trump to accomplish: Getting rid of ESG.

The New York Post reports:

Their lack of "skin in the game" also made it relatively easy for a certain class of social and political activists -- almost always leaning to the left -- to capture these funds' "shareholder engagement" offices.

That's why we've seen the Big Three passive funds pushing companies to take woke actions -- from climate pledges to race-based hiring policies -- regardless of what most shareholders actually want.

Whenever you've seen a company "go woke," it's a safe bet that it's done so with a passive index fund looking over its shoulder.

That's where the Trump administration's emerging idea comes in: Instead of letting three giant index fund families dominate shareholder votes, the Securities and Exchange Commission could require them to vote the same way they invest -- passively.

With all the usual caveats that come with the fact that the above is a regulatory tweak, and thus far, far from representing any kind of a fundamental shift towards freedom, this is not a bad idea, and could at least back off from these abuses -- temporarily, at least.

But, as I said back when Trump "banned" fund managers making political donations with money not their own:

Trump "banned" this?

How? By executive order? By installing his guys in an unaccountable bureaucracy?

I never recall Trump or anyone from his party explaining what was wrong, or why they had to resort to half-measures like this, or outlining a general strategy to make such changes permanent.

And what happens when then next criminal gang ascends to power? Oh, yeah. We're seeing that now.

It's bad enough that we've been here before, but, speaking of criminal gangs, it's worse this time.

Which government even "needs" ESG when it's effectively nationalizing companies via "golden share" "agreements?"

A golden share reduces the economic value of the company for other investors, even if the government only takes a "noneconomic" position. That is because the government is reducing the ability of equity shareholders to control the strategic and operational decision making of the company, which could generate costs and inefficiencies for the corporation. If golden shares were ubiquitous, then financing costs would increase and the attractiveness of the United States and US businesses as investment opportunities would decline.

Once again, we are paying the price for electing a scatterbrained sub-pragmatist. He attacks ESG -- the way his political opponents pushed their agenda -- while establishing a new way to push his own whims.

He has not in any permanent way done the former, while also laying the groundwork for much worse with his new stratagem, which he apparently sees in isolation from its fundamental similarity with the former and its future usefulness to his political opponents/spiritual brothers-in-arms.

All in all, Trump has dropped the frying pan of ESG into the fire of giving nationalization a foothold.

-- CAV