7 Comments

Good column, but a faulty old trick: black rock does not have an income of $9 trn. it has assets that large. But GDP measures income, not assets. Bad comparison.

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Fink and BlackRock continue to cater to the CEO class along with Vanguard, Fidelity and the other large asset houses. They continue to embrace stock option compensation and increasing CEO pay that is wildly out of wack from the average worker. I spend considerable time each proxy season going over the statements of the modest holdings in my portfolio. Most of the time I vote no on the advisory compensation question. ESG is tarred because of the Environmental and Social part of the triad when it is Governance that is the most important (at least to me).

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Your lips to God’s ears. To the extent Adam Smith is the father of capitalism, his invisible hand in The Wealth of Nations might be historical context for sustainability, which is what ESG is all about.

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Allen Kamp, ESG is a creation of the conservative Supreme Court. In Citizens United, The Court ruled that Congress could not prevent corporations from making political statements corporations have free speech rights. This is the basis of Disney's defense against De Santis' attack on Disney for being pro-gay.

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Its a free country, so I'm in favor of companies doing ESG investing (If Ron DeSantis is agin' it, it must be more good than bad). I do not have a particularly warm and fuzzy feeling about it, however, as I do not see it as being particularly well directed, sort of like the relation of "organic" foods to nutrition, more virtue signaling than virtue. I'd like to see more of that moral fervor directed at progressive income taxation to reduce the structural deficit, merit based immigration, and taxation of net CO2 and methane emissions.

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Insofar as we cannot bring ourselves to get the negative externalities priced into the 'market' (eg. carbon tax, social/environmental side effects..), I suppose ESG is 2nd best. Though maybe not; if Exxon pays more for capital does that mean a dirtier or cleaner result? Those devilish details...

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