During the
State of the Union address to Congress this year, President Joe Biden delivered an astoundingly Orwellian endorsement of socialism, clothed as its anti-matter counterpart.
“I’m a capitalist, but capitalism without competition isn’t capitalism,” the president declared. “It’s exploitation, and it drives up prices. When corporations don’t have to compete, their profits go up, your prices go up, and small businesses and family farmers and ranchers go under.”
Besides dubiously blaming today’s
40-year-high inflation on corporate greed (greed that, presumably, was inexplicably dormant during decades of inflation that was a fraction of today’s), Biden’s remarks shamelessly suggest that his administration’s heavy imposition of
new and revived regulations fosters competition when the real mission is to level unprecedented burdens and governmental control upon businesses of all sizes.
“I’m a capitalist” belongs alongside “War is peace. Freedom is slavery. Ignorance is strength.”
Promising to reduce average global temperatures by a degree or two is the most fashionable excuse in America today for the state battering companies, even though Russia and China have no intention of joining in the climate crusade at the expense of their expansionist objectives, and India and other developing nations aren’t going to abandon the ongoing industrialization their people yearn for in exchange for being congratulated by international bodies for going green.
Socialists who aren’t hiding their true identity propose basically a quick and merciful death for the private sector, like now-ousted British Labor Party leader Jeremy Corbyn
arguing that wasteful “fragmentation” warrants re-nationalizing privatized railroads. Or Vermont Sen. Bernie Sanders proposing a
95 percent tax on companies that are more successful than he likes. But while Biden suggests he’s enabling enhanced competition, his Securities and Exchange Commission chairman, Gary Gensler, finds new forms of slow torture for this country’s employers. Gensler was
heavily involved in writing one of the most onerous pieces of regulatory legislation ever—2002’s Sarbanes-Oxley Act,
which costs Fortune 500 firms millions of dollars each annually on average, and has been a powerful disincentive to firms setting themselves up as publicly traded or retaining that status.
The SEC’s most prominent policy under Gensler is requiring issuers of stocks and bonds to assess and report the risks climate change poses to their investors. As Heritage Foundation senior fellow David Burton pointed out in a
letter to Gensler, “Requiring all public companies to develop climate modeling expertise, the ability to make macroeconomic projections based on these models and then make firm-specific economic assessments based on these climate and economic models will be expensive, imposing costs that will amount to billions of dollars on issuers. These expenses would harm investors by reducing shareholder returns.”
Burton also points to the irony that discouraging companies from being or going public gives fat cats more wealth and the average Joe less because it “would deny to ordinary (unaccredited) investors the opportunity to invest in dynamic, high-growth, profitable companies until most of the money has already been made by affluent accredited investors” and “would further impede entrepreneurial access to public capital markets.”
According to former SEC chief economist James Overdahl, the “massive scope and prescriptive particularity” of the regulations, “centering around the inherent complexity in collecting required data and completing the calculations and analysis necessary to make the proposed disclosures” make it “difficult to recall any other instance in which the SEC has mandated disclosures where there are so many significant uncertainties, data limitations and practical difficulties in developing the required information.”
Obviously, lawsuits would become legion, as publicly traded firms are endlessly accused of failing to report climate impact to the full satisfaction of environmentalists. But companies not to be found on the stock exchange, who think themselves safe in their private status, will actually also be subject to heavy new costs, because public companies’ private partners and contractors will be required by the SEC to report their emissions, outside firms having to be turned to for certification.
In a media conference call on June 16, U.S. Chamber Executive VP Tom Quaadman pointed out that according to the SEC itself, the climate disclosure rule in its current form “would be at least three times the implementation costs of Sarbanes-Oxley, which was the most expensive disclosure regime that we’ve gone through over the last generation,” requiring “almost 16 to 18 years to finalize all of the different Sarbanes-Oxley rules.”
Quaadman added that after “many, many meetings” with companies that are U.S. Chamber members, they told the Chamber of “implementation costs in the millions or tens of millions of dollars” for each firm—many times the SEC’s estimates.
Testifying to the Senate Banking Committee in September, Gensler claimed of climate risk information that “investors are really demanding it.” More accurately, trendy asset managers, most prominently BlackRock, the largest such firm in the world, with $10 trillion under its control, demand it, the better to inflict its wishes on companies in which it invests. Blackrock
boasts that it “voted against 55 directors/director-related items on climate-related issues. This is a tool available to us in virtually every market we invest in on behalf of our clients ... 83% of the time our votes against directors in the FTSE [Financial Times] 350 over remuneration concerns resulted in revisions to pay policies within 12 months.”
Pointless or politicized regulations both
devastate private sector productivity and kill jobs. A Conference Board survey just
found that “more than 60 percent of CEOs globally say they expect a recession in their primary region of operations before the end of 2023 or earlier ... Fifteen percent of CEOs say their region is already in recession.”
With a looming economic downturn—on the heels of the devastation of COVID—is this a time to be helping multi-trillion-dollar money managers bully the nation’s providers of private-sector jobs, one objective being to charm the left so they might forget about things like BlackRock’s
massive military investments?
And all in the guise of a “capitalist” eager to boost competition—like a call girl attending a masquerade party costumed as a mother superior.
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