Grift Capitalism: The GOP’s Brilliant Strategy For Ripping Off Ordinary Americans

Sustainability Grift Capitalism: The GOP’s Brilliant Strategy For Ripping Off Ordinary Americans Robert G. Eccles Contributor Opinions expressed by Forbes Contributors are their own. Tenured Harvard Business School professor, now at Oxford University.

New! Follow this author to improve your content experience. Got it! Jul 5, 2022, 04:59am EDT | Share to Facebook Share to Twitter Share to Linkedin Grift (intransitive verb): Engage in petty or small-scale swindling Grift (noun): A petty or small-scale swindle The U. S.

Dictionary It is fitting that yesterday on the Fourth of July I finally figured this out. We are living in “ The Year of the Grifter . ” It has been easy to see that the Alt-Right is leading the GOP’s weaponization of “Woke Capitalism” and “anti-ESG” as a political strategy for consolidating power in a tyranny of the minority.

(Twenty-one Red States with a total population less than the State of California have 42 seats in the Senate. ) I have written about the exemplary role former Vice President Mike Pence is doing as the leader of the Sustainability Flat-Earthers. You also have to respect and give credit to his resilience and resourcefulness.

Here’s a guy whose own President wanted him hanged. His political rival Florida Governor Ron DeSantis has the third largest state at his disposal to leverage for his own political ambitions and is doing so very effectively. But by channeling George C.

“Want to own part of the Brooklyn Bridge?” Parker, a May 21, 2022, poll shows Mr. Pence running a solid third behind Mr. DeSantis in the GOP’s Presidential primary.

Brooklyn bridge from East river at sunset with flare. Wall street area, Freedom tower and the . .

. [+] Beekman tower are seen behind it. getty But after reading “Woke, Inc.

: Inside Corporate America’s Social Justice Scam” by Vivek Ramaswamy,” I realized that cries about “Woke Capitalism” and ESG are a clever verbal sleight of hand—a distracting magician’s feint—while putting Grift Capitalism into place. One of the largely unnoticed building blocks for Grift Capitalism is Ramaswamy’s Strive Asset Management. It currently has one employee, 11 investors (including billionaire hedge fund manager Bill Ackman and right wing billionaire activist and rabid Trump supporter Peter Thiel), and a tiny $20 million in assets under management.

Apocalyptic warnings about Woke Capitalism and ESG are at the heart of the fund-raising strategy for Strive Asset Management . It is a true “ American Hustle . ” And it is being brilliantly and ruthlessly implemented, as I will explain.

MORE FOR YOU Is Carbon Capture Another Fossil Fuel Industry Con? Sustainable Fashion Wants Brands To Redefine Business Growth Trouble With Predicting Future Of Transportation Is That Today Gets In The Way In this little video the confident and smooth Ramaswamy is almost mesmerizing in creating his own upside down world regarding fiduciary duty and ESG. Although he admits to his sympathetic interviewer that he doesn’t know what ESG is, he boldly asserts his commitment “to put excellence over politics. ” (Keep this in the back of your mind as you read further.

) He earnestly attacks “The Big Three” of BlackRock, State Street, and Vanguard as being driven by ideology rather than returns. “It’s the money of everyday American citizens that’s being used to advance this ideology that most of them disapprove of. ” Sorry to trouble you with a fact Mr.

Ramaswamy, but these asset managers have a fiduciary duty to maximize the long-term returns of their clients. It is you, not they, who is the ideologue and the one who is playing politics. One of your major bête noires, BlackRock, has made clear they understand their fiduciary duty.

In their January 2022 “ BlackRock Investment Stewardship: Global Principles ” report, the first sentence reads: “BlackRock’s purpose is to help more and more people experience financial well -being. ” What could be clearer than that? C’mon, Vivek, why not just admit you’re havin’ a bit of fun and making up a lot of stuff that isn’t true in order to help you with the difficult fund-raising process? Especially difficult for a start-up, even with backers like yours. Mr.

Ramaswamy also attacks the Engine No. 1 campaign against ExxonMobil (more on that below) and says the company should just keep drilling for oil. Which it is.

Ramaswamy’s little video is the perfect Episode 10 for Season 4 of “Stranger Things. ” Grift Capitalism Self Grift Capitalism is built on a strong foundation of four inalienable rights. 1.

The right to privacy but only for straight white males. 2. The right for everyone to have guns even though many must die as a result.

3. The right to call concerns about climate change a conspiracy of the elite. 4.

The right to decry ESG and Woke Capitalism as existential threats to America. Right Number 4 is the newest one upon which Grift Capitalism is being built, but it is the most important one. The first three rights have recently been enshrined by a now rogue Supreme Court (with an approval rating of only 25 percent, it’s lowest in 50 years) that has decided it should make laws rather than interpret them.

These three rights will have serious economic consequences to all Americans, regardless of where they live. But it is the fourth one that is most pernicious. And, ironically, especially for those in Red states.

It is how Grift Capitalism is going to transfer potentially trillions of dollars in the pension funds of ordinary Americans to potentially less capable—but politically correct in the grifter sense—asset managers. The Supreme Court has yet to lend its “solemn” support for Right Number 4 through yet another laughably tortured legal argument, but I’m sure it and its grifter supporters are already looking for ways to do so. Here’s how the Big Grift works.

Following the lead of Texas, other Red states such as Arkansas, Kentucky, and West Virginia are threatening to take pension fund money away from asset managers if they don’t like their policies for sustainable investing and are deemed to be “ boycotting ” the fossil fuel industry. What is that? Well, pretty much whatever these states want it to mean. So an asset manager could have voted for an Engine No.

1 board candidate or for a shareholder resolution asking for a climate change transition plan, maybe they have a “low carbon” ETF (that still is chock-full of oil). No matter. Off the list! The Texas state legislature has declared that the pension fund may no longer work with “anti-oil” asset managers.

The includes 159 financial institutions, such as BlackRock, Vanguard, Goldman Sachs, and JPMorgan Chase. All of which are invested in oil and gas with the banks also being the leading lenders for oil and gas companies—to the consternation of those on the other end of the political spectrum. For example, in a letter of January 3, 2021, BlackRock notes that: o BlackRock, on behalf of our clients, has $259 billion in assets invested in fossil fuel companies globally.

o This includes $91 billion invested in Texas fossil fuel companies alone. o We are perhaps the world’s largest investor in fossil fuel companies, and, as a long-term investor in these companies, we want to see these companies succeed and prosper. Helpful note to Mr.

Pence: BlackRock has around $10 trillion in AUM, so its fossil fuel holdings represent 2. 59 percent, pretty much in line with the percentage of Western fossil fuel companies (e. g.

, excluding Saudi Arabia, China, and Russia) in terms of global market cap. State Partisan Composition according to the National Conference of State Legislatures as of July 3, . .

. [+] 2022 Self It’s early stages, but let’s see how this might play out. For starters, a careful analysis by University of Pennsylvania Finance Professor Daniel Garrett and Ivan Ivanov, a member of the Board of Governors of the Federal Reserve System estimate these exclusions (note the irony?) could cost Texas an additional $303-532 million in debt servicing costs by not working with the major banks such as Goldman Sachs and JPMorgan Chase.

According to the National Association of State Retirement Administrators (NASRA) the “combined value of public pension assets exceeds $5. 8 trillion. “ Of this, $1.

68 trillion, representing 5. 7 million pensioners, are in states with a Republican legislation and governor; on the American Legislative Exchange Council (ALEC) list waiting to be weaponized. The number could be much larger.

There’s another $1 trillion in the split states. One of them, Kentucky, has already announced its participation in the Big Grift. Others could certainly follow, In the unlikely event the world’s largest and most competent asset managers bend to this naked use of political power—a true violation of fiduciary duty—this means someone else will have to manage these assets.

Like Strive Asset Management! And any other asset manager who solemnly promises to have nothing to do with sustainable investing even if this means a potentially massive increase in risk to the detriment of long-term returns. Smart sustainable investing reduces risk, not the opposite. Even though there could be real costs to the hard working, ordinary Americans living in these Red states, hey, why worry about fiduciary duty when pension funds can be weaponized? Just 0.

1 percent of $1. 68 trillion would multiply Strive’s AUM by a factor of around 80. Not bad at all! TOPSHOT – A fly rests on the head of US Vice President Mike Pence as he takes notes during the vice .

. . [+] presidential debate against US Democratic vice presidential nominee and Senator from California Kamala Harris in Kingsbury Hall at the University of Utah on October 7, 2020, in Salt Lake City, Utah.

(Photo by Eric BARADAT / AFP) (Photo by ERIC BARADAT/AFP via Getty Images) AFP via Getty Images The upside down world of Grift Capitalism is a wondrous thing to behold since it is not tethered to the facts of our physical world. Consider Mr. Pence’s complaint in a letter to The Wall Street Journal in which he bemoans “an insurgent shareholder [Engine No.

1], backed by BlackRock , the world’s largest asset manager forced Exxon Mobil to put three environmentalists on its corporate board. ” It gets worse! In an energy policy speech he gave on May 10 (my 71 st birthday present from the former Vice President) he ominously warns that “Those three are now working to undermine the company from the inside. ” Umm, with all due respect Mr.

Pence, I have pointed out that these three new directors all have deep energy experience. Unlike any other member of the board. And how damaging have they been to the company? The directors were elected on May 26, 2021, with the stock at $58.

31 per share. On July 1, 2022, the company’s stock price was up 52 percent to $87. 55 per share.

Some of this may be attributed to commodity prices increases due to Russia’s invasion of Ukraine, but it is above the 42 percent increase for Chevron over the same period of time. A company not burdened by having three environmentalists working to undermine the company from within. So, Mr.

Pence, I strive to understand just what your problem is with these directors. Let me also note that I am not a big proponent of exclusion and divestment. I don’t think that is how to address climate change.

Rather, I believe that investors should engage with the management and boards of companies to adapt their business models for the energy transition in order to ensure their ability to deliver long-term returns to their shareholders. Including those in the Red states. That is exactly what Engine No.

1 did to the benefit of ExxonMobil and its shareholders. While I think the Big Three that the grifters rail about could be doing more in terms of engagement, they are hardly dumping oil and gas stocks out of some kind of teary-eyed environmentalism at the expense of shareholder returns. Putting the uncomfortable reality of facts aside, let me express my horrified awe at the skill with which Mr.

Pence and the rest of the crew are grifting hardworking American families at such a scale. Calling it the Big Grift does not show them the respect they deserve for this amazing feat. It is the MEGA Grift! And while I deplore their objectives, there is much to be learned from the means they are using to accomplish them.

They are winning the rhetorical strategy (Woke Capitalism is much more energizing to their base than Stakeholder Capitalism) and they are executing it with steely resolve. Their communications effectively combine the political and economic into a simple equation: The Big Lie + The Big Grift = The Big Con In contrast, their political counterpart, the Sustainability Taliban are consumed with arguing about single vs. double materiality, screaming how ESG and sustainability aren’t the same thing, and making fun of the name of the International Sustainability Standards Board.

I ask them, “Just how useful is all this given the recent Supreme Court decision eviscerating the EPA’s ability to fight climate change? And the sure-to-come lawsuits hoping to take the SEC’s proposal on climate-related disclosures to the Supreme Court where it can be tossed out as well?” While the GOP is hunting with the nuclear bomb Major Question Doctrine (invented out of thin air by Supreme Court justices as a specious argument to restrict the authority of regulatory agencies), the Sustainability Taliban are firing little popguns at those they don’t deem pure enough. In doing so, the Sustainability Taliban are serving red meat on a platter to the MEGA grifters who are dishing it out to their unsuspecting supporters and who are lapping it up. Indigestion in terms of lowered returns and possible default on pension funds will come much later.

I can also easily imagine the following. While the creators of Grift Capitalism are sticking to their message of Woke Capitalism, any of the Sustainability Taliban who read this article will say something like this. “Bob, you’ve overly simplified things once again.

It’s not Grift Capitalism. I prefer to call it Rapacious Capitalism because that’s what it really is,” says one. Another says, “No, it should be called Exploitative Capitalism.

‘Rapacious’ only connotes greed whereas ‘Exploitative’ makes it clear there is intent to harm others. ” A third says, “You’re both wrong. I know what it should be called—Authoritarian Capitalism.

Because we are on our way to becoming a fascist state. This name also has more syllables and shows than I am smarter than the rest of you. ” But the problem goes deeper than this.

As the GOP marches on in cult-like discipline, the Democratic Party maintains its core competence as a circular firing squad. For many of its members in Congress “No Deal” is better than not getting “My Deal. ” The names of Senators Joe Manchin, Bernie Sanders, Krysten Sinema, and Elizabeth Warren come to mind.

Let me get even more pointed and finish with a little anecdote. I had a recent conversation with the CEO of a major business association. His politics lean more left than right, but he would be as comfortable in the no-longer extant moderate GOP as he would be in the diminishing moderate wing of the Democratic Party.

We were talking about the differences in the meetings his group has with the GOP and the Dems. He said, “The GOP comes in wanting to talk about inflation. The Dems want to talk about transgender bathrooms.

” Which issue do you think is of greater concern to the vast majority of Americans? Upside down photo of a caucasian woman in white shirt and jeans smiling on a yellow studio wall with . . .

[+] free space getty I share the anger and sorrow of those regarding the recent decisions by the Supreme Court which is just getting started with the damage it will do. I am appalled at how the GOP is constructing an Upside Down World of Grift Capitalism that is going to hurt Red state citizens as much, if not more, than Blue State citizens. We are all Americans and should be in this together, but we aren’t.

We are more at odds with each than we’ve been since the Civil War. Still, I remain an optimist and think the pendulum will eventually swing back—even though I acknowledge it still has more to go in its swing to the right. Restoring rationality and a sense of responsibility to all Americans will take decades.

I’m not sure if I’ll be around long enough to see any perceptible movement, but I’m sure my children and grandchildren will be. I owe them and everyone else in their generations, including those in the Red states, to do whatever I can do in my own small way to help make this happen. Follow me on Twitter or LinkedIn .

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