January 29, 2021
By Niall Ferguson • The Spectator
‘To see what is in front of one’s nose needs a constant struggle,’ George Orwell famously observed. He was talking not about everyday life but about politics, where it is ‘quite easy for the part to be greater than the whole or for two objects to be in the same place simultaneously’. The examples he gave in his 1946 essay included the paradox that ‘for years before the war, nearly all enlightened people were in favour of standing up to Germany: the majority of them were also against having enough armaments to make such a stand effective’.
Last week provided a near-perfect analogy. For years before the 2020 election, nearly all American conservatives were in favour of standing up to big tech: the majority of them were also against changing the laws and regulations enough to make such a stand effective. The difference is that, unlike the German threat, which was geographically remote, the threat from Silicon Valley was literally in front of our noses, day and night: on our mobile phones, our tablets and our laptops.
Writing in this magazine more than three years ago, I warned of a coming collision between Donald Trump and Silicon Valley. ‘Social media helped Donald Trump take the White House,’ I wrote. ‘Silicon Valley won’t let it happen again.’ The conclusion of my book The Square and the Tower was that the new online network platforms represented a new kind of power that posed a fundamental challenge to the traditional hierarchical power of the state.
By the network platforms, I mean Facebook, Amazon, Twitter, Google and Apple, or FATGA for short — companies that have established a dominance over the public sphere not seen since the heyday of the pre-Reformation Catholic Church. FATGA had humble enough origins in garages and dorm rooms. As recently as 2008, not one of them could be found among the world’s largest companies by market capitalisation. Today, they occupy first, third, fourth and fifth places in the market cap league table, just above their Chinese counterparts, Tencent and Alibaba.
What happened was that the network platforms turned the originally decentralised worldwide web into an oligarchically organised and hierarchical public sphere from which they made money and to which they controlled access. That the original, superficially libertarian inclinations of these companies’ founders would rapidly crumble under political pressure from the left was also perfectly obvious, if one bothered to look a little beyond one’s proboscis.
Following the violent far-right rally at Charlottesville in August 2017, Matthew Prince, chief executive of the internet service provider Cloudflare, described how he had responded: ‘Literally, I woke up in a bad mood and decided someone shouldn’t be allowed on the internet.’ On the basis that ‘the people behind the [white supremacist magazine] Daily Stormer are assholes’, he denied their website access to the internet. ‘No one should have that power,’ he admitted. ‘We need to have a discussion around this with clear rules and clear frameworks. My whims and those of Jeff [Bezos] and Larry [Page] and … Mark [Zuckerberg] shouldn’t be what determines what should be online.’
But that discussion had barely begun in 2017. Indeed, many Republicans at that time still believed the notion that FATGA were champions of the free market that required only the lightest regulation. They know better now. After last year’s election Twitter attached health warnings to Trump’s tweets when he claimed that he had in fact beaten Joe Biden. Then, in the wake of the storming of the Capitol by a mob of Trump supporters, Twitter and Facebook began shutting down multiple accounts — including that of the President himself, now ‘permanently suspended’ from tweeting. When Trump loyalists declared their intention to move their conversations from Twitter to rival Parler — in effect, Twitter with minimal content moderation — Google and Apple deleted Parler from their app stores. Then Amazon kicked Parler off its ‘cloud’ service, effectively deleting it from the internet altogether. It was a stunning demonstration of power.
It is only a slight overstatement to say that, while the mob’s coup against Congress ignominiously failed, big tech’s coup against Trump triumphantly succeeded. It is not merely that Trump has been abruptly denied access to the channels he has used throughout his presidency to communicate with voters. It is the fact that he is being excluded from a domain the courts have for some time recognised as a public forum.
Various lawsuits over the years have conferred on big tech an unusual status: a public good, held in private hands. In 2018 the Southern District of New York ruled that the right to reply to Trump’s tweets is protected ‘under the “public forum” doctrines set forth by the Supreme Court’. So it was wrong for the President to ‘block’ people — i.e. stop them reading his tweets — because they were critical of him. Censoring Twitter users ‘because of their expressed political views’ represents ‘viewpoint discrimination [that] violates the First Amendment’.
In Packingham vs North Carolina (2017), Justice Anthony Kennedy likened internet platforms to ‘the modern public square’, arguing that it was therefore unconstitutional to prevent sex offenders from accessing, and expressing opinions on, social network platforms. ‘While in the past there may have been difficulty in identifying the most important places (in a spatial sense) for the exchange of views,’ Justice Kennedy wrote, ‘today the answer is clear. It is cyberspace —the “vast democratic forums of the internet” in general … and social media in particular.’
In other words, as President of the United States, Trump could not block Twitter users from seeing his tweets, but Twitter is apparently within its rights to delete the President’s account altogether. Sex offenders have a right of access to online social networks; but the President does not. These companies have a dominance not seen since the heyday of the pre-Reformation Catholic Church
This is not to condone Trump’s increasingly deranged attempts to overturn November’s election result. Before last week’s riots, he egged on the mob; he later said he ‘loved’ them, despite what they had done. Nor is there any denying that a number of Trump’s most fervent supporters pose a threat of further violence. Considering the bombs and firearms some of them brought to Washington, the marvel is how few people lost their lives during the occupation of the Capitol.
Yet the correct response to that threat is not to delegate to Facebook’s Mark Zuckerberg, Twitter’s Jack Dorsey and their peers the power to remove from the public square anyone they deem to be sympathetic to insurrection or otherwise suspect. The correct response is for the FBI and the relevant police departments to pursue any would-be Trumpist terrorists, just as they have quite successfully pursued would-be Islamist terrorists over the past two decades.
The key to understanding what has happened lies in an obscure piece of legislation, almost a quarter of a century old, enacted after a New York court held online service provider Prodigy liable for a user’s defamatory posts. Congress then stepped in with the 1996 Telecommunications Act and in particular Section 230, which was written to encourage nascent firms to protect users and prevent illegal activity without incurring massive content management costs. It states: “1. No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.2. No provider or user of an interactive computer service shall be held liable on account of … any action voluntarily taken in good faith to restrict access to or availability of material that the provider or user considers to be obscene, lewd, lascivious, filthy, excessively violent, harassing, or otherwise objectionable.
In essence, Section 230 gives websites immunity from liability for what their users post if it is in any way harmful, but also entitles websites to take down with equal impunity any content that they don’t like the look of. The surely unintended result of this legislation, drafted for a fledgling internet, is that some of the biggest companies in the world enjoy a protection reminiscent of Joseph Heller’s Catch-22. Try to hold them responsible as publishers, and they will say they are platforms. Demand access to their platforms and they will insist that they are publishers.
This might have been a tolerable state of affairs if America’s network platforms had been subject to something like the old Fairness Doctrine, which required the big three terrestrial TV networks to give airtime to opposing views. But that was something the Republican party killed off in the 1980s, seeing the potential of allowing more slanted coverage on cable news. What goes around comes around. The network platforms long ago abandoned any pretence of being neutral. Even before Charlottesville, their senior executives and many of their employees had made it clear that they were appalled by Trump’s election victory (especially as both Facebook and Twitter had facilitated it). Increasingly, they interpreted the words ‘otherwise objectionable’ in Section 230 to mean ‘objectionable to liberals’.
Throughout the summer of last year, numerous supporters of Black Lives Matter used social media, as well as mainstream liberal media, to express their support for protests that in many places escalated into violence and destruction considerably worse than occurred in the Capitol last week. One looked in vain for health warnings, much less account suspensions, though Facebook says it has removed accounts that promote violence.
Compare, for example, the language Trump used in his 6 January speech and the language Kamala Harris used in support of BLM on Stephen Colbert’s show on 18 June. Neither explicitly condoned violence. Trump exhorted the crowd to march to the Capitol, but he told them to ‘peacefully and patriotically make your voices heard’. Harris condemned ‘looting and… acts of violence’, but said of the BLM protestors: ‘They’re not going to stop. They’re not. This is a movement. I’m telling you. They’re not going to stop, and everyone, beware. Because they’re not going to stop. They’re not going to stop before election day in November, and they are not going to stop after election day. And everyone should take note of that on both levels.’ What exactly was the significance of that ‘beware’?
Earlier, on 1 June, Harris had used Twitter to solicit donations to the Minnesota Freedom Fund, which posted bail for people charged with rioting in Minneapolis after the death of George Floyd. It would be easy to cite other examples. ‘Destroying property, which can be replaced, is not violence,’ Nikole Hannah-Jones of the New York Times told CBS in early June, at a time when multiple cities were being swept by arson and vandalism. Her Twitter account is still going strong.
The double standard was equally apparent when the New York Post broke the story of Biden’s son Hunter’s dubious business dealings in China. Both Twitter and Facebook immediately prevented users from posting links to the article — something they had never done with stories damaging to Trump.
You don’t need to be a Trump supporter to find all this alarming. Conservatives of many different stripes — and indeed some bemused liberals — have experienced the new censorship for themselves, especially as the Covid-19 pandemic has emboldened tech companies to police content more overtly. In the UK, TalkRadio briefly vanished from YouTube for airing anti–lockdown views that violated the company’s ‘community guidelines’. A recording of Lionel Shriver reading one of her Spectator columns on the pandemic was taken down for similar reasons. Carl Heneghan and Tom Jefferson, two Oxford academics, fell foul of Facebook’s censors when they wrote for this magazine about a briefly controversial paper on the efficacy of masks in Denmark.
You might think that FATGA have finally gone too far with their fatwa against a sitting president of the United States. You might think a red line really has been crossed when both Alexei Navalny and Angela Merkel express disquiet at big tech’s overreach. But no. To an extent that is remarkable, American liberals have mostly welcomed (and in some cases encouraged) this surge of censorship — with the honourable exception of the American Civil Liberties Union.
True, during last year’s campaign the Biden team occasionally talked tough, especially about Facebook. However, it is increasingly clear that the most big tech has to fear from the Biden-Harris administration is protracted antitrust actions focused on their alleged undermining of competition which, if history is any guide, will likely end with whimpers rather than bangs. Either way, the issue of censorship will not be addressed by antitrust lawsuits.
It is tempting to complain that Democrats are hypocrites — that they would be screaming blue murder if the boot were on the other foot and it was Kamala Harris whose Twitter account had been cancelled. But if that were the case, how many Republicans would now be complaining? Not many. No, the correct conclusion to be drawn is that the Republicans had their chance to address the problem of over-mighty big tech and completely flunked it.
Only too late did they realise that Section 230 was Silicon Valley’s Achilles heel. Only too late did they begin drafting legislation to repeal or modify it. Only too late did Section 230 start to feature in Trump’s speeches. Even now it seems to me that very few Republicans really understand that, by itself, repealing 230 would not have sufficed. Without some kind of First Amendment for the internet, repeal would probably just have restricted free speech further.
As Orwell rightly observed, ‘we are all capable of believing things which we know to be untrue, and then, when we are finally proved wrong, impudently twisting the facts so as to show that we were right. Intellectually, it is possible to carry on this process for an indefinite time: the only check on it is that sooner or later a false belief bumps up against solid reality.’
Those words sum up quite a lot that has gone on inside the Republican party over the past four years. There it was, right in front of their noses: Trump would lead the party to defeat. And he would behave in the most discreditable way when beaten. Those things were predictable. But what was also foreseeable was that FATGA — the ‘new governors’, as a 2018 Harvard Law Review article called them — would be the true victors of the 2020 election.
October 13, 2020
By Peter Roff • Newsweek
America is a divided country. Some believe in its exceptionalism and that it has been and remains a force for global good. Others think a political and cultural overhaul that rejects our founding principles is long overdue. The rest of us are, it seems, caught in the middle.
Most Americans would willingly acknowledge our faults after they are pointed out. No one of any matter is, for example, still defending slavery. A sensible position, it would seem, since the issue was settled by war and constitutional amendment more than 150 years ago. Yet some want to reopen that wound and talk of securing reparations for the descendants of those once held in bondage—an idea most people seem to reject no matter what they might tell the pollsters.
Another place where American values are in tension with contemporary thinking is the annual observance of Columbus Day. It used to be that this holiday marked the “discovery” of America. In my youth, kids would debate with all the intensity they could muster whether it was Columbus or the Vikings who were the first Europeans to reach North America. That there were already people here was of little import, lost in a bevy of ethnic pride.
In 2020 Columbus Day is a trigger for social justice warriors who see it as a celebration of the massacre of indigenous people by white, empire-building Europeans. That kind of grievance-based analysis, which fuels the rage in inner-city Portland and Seattle, ignores completely the benefits to humankind that came about as a result of Columbus’ discovery.
Columbus’ accomplishments are worthy of celebration because they culminated in the founding of the United States. The explorer was, in a way, the first to emigrate to what became America even if he did not settle here permanently.
Many who followed Columbus were following commercial interests. Others came seeking the freedom to worship the Creator as they saw fit and not as a monarch dictated. Others wanted a chance to start anew, perhaps with a new name and identity. More than a few were brought here without their consent as commercial property rather than people, something we must never forget. Yet, when taken together, all of them contributed to making the United States the greatest, freest, most prosperous country mankind has ever known.
Rather than abolish Columbus Day, let us add to its meaning. Let’s make it the holiday that celebrates the accomplishments immigrants have made and continue to make for America and the world.
Think of the honorable men and men and women who have added to this nation’s economic, cultural, scientific, political, diplomatic, artistic and commercial achievements. What would America be if it had not offered a new start to the likes of Albert Einstein, Nikola Tesla, Andrew Grove, Vinod Khosla, Elon Musk and Mother Cabrini—just to name a few.
What was true in 1720, 1820, and 1920 remains true today. The people immigrating to the United States come because the ability to increase their living standards in their home country is blocked by religious, economic, geographic, political, linguistic, ethnic or other artificial barriers they cannot overcome. The only way for them to escape the cultural and economic poverty in which they live is to escape to America.
Immigrants contribute mightily to the greatness that is America. Before Trump’s election, almost 350 out of every 100,000 immigrants created a new business every month, according to the Kauffman Foundation, an entrepreneurship and education research group.
Let’s welcome those who follow the rules with open arms, and applaud their courage. Who among us would leave behind everything we had known for a new life in another nation? Only the bravest. Yet, to a cabal of idiots out to prove a point, America is just a flawed concept that cannot be redeemed, and the country we have today was stolen from the people already here, starting when Columbus stepped off the Santa Maria. It is a severely distorted, one-sided view of history peddled by those who call Monday “Indigenous Peoples’ Day.”
Immigrants have made the United States a stronger, richer, healthier and better place. To honor them on Columbus Day is to keep alive the idea of America as a “shining city on a hill” beckoning to all who seek a better life. Use the holiday to honor them and their courage in seeking a better life, if not for themselves, then for their children and grandchildren.
October 4, 2020
Ruth Bader Ginsburg, the Supreme Court, and the future of American democracy
By Matthew Continetti • The Washington Free Beacon
The death of Ruth Bader Ginsburg has clarified what is at stake in the 2020 election. It is not, as some believe, democracy itself. Nor is it, as others assume, our continued existence as a nation. Democracy will survive Donald Trump, and the United States of America will outlast Joe Biden. The question that 2020 will help to answer is what sort of democracy, and what sort of nation, America will be as it prepares to enter the second quarter of the 21st century.
The reaction to Ginsburg’s death, and to Republican plans to fill her seat on the Supreme Court, underscores the choice before the electorate: Does it prefer to live in a democratic republic ordered toward the principles of the Founders and the constitutional structure they designed to protect individual liberty? Or would it rather dwell in a plebiscitary democracy where the original meaning of the Constitution, when it is not explicitly repudiated, is politely overlooked in order to satisfy ever more radical egalitarian demands?
Needless to say, the answer is up in the air, and has been for some time. But we may be nearing a settlement, one way or another. The civil unrest of the past several months has made unignorable the existence of a large body of opinion that holds something is terribly wrong with America as founded, something that cannot be redeemed, and that American history and American institutions must be drastically revised to atone for the injustices committed against racial minorities. President Trump, in his inimitable way, has made the opposite argument, and called for a renewed appreciation of the American story and a resurgence of national pride.
Ginsburg’s passing heightened the tension. Suddenly an abstract cultural debate was transformed into a concrete political-legal struggle, and the prospect of lasting victory for one team (Trump and Mitch McConnell’s) looked real. The fight over the Supreme Court vacancy Ginsburg left behind also illuminated the lengths to which some progressives are prepared to go to make real their vision of the future. And it is in their openness to institutional upheaval that the real import of this election may be found. If enacted, the measures these Democrats propose would warp our constitutional system. They would turn the American government into a creature far different from the one the Founders made. This would be the upshot of the “structural reform” that, until the last week, lived mainly on Twitter and in the heads of policy wonks.
These Democrats say that, if President Trump’s nominee to replace Ginsburg is confirmed, and next year brings a Democratic president and a Democratic Senate, then the first order of business for the new government, in the middle of a pandemic and a troubled economy, will be abolishing the legislative filibuster and packing the Supreme Court by adding anywhere from two to four justices. Such a move, which even the greatest president of the 20th century was unable to achieve, would polarize this country even more than it already is, and delegitimize the Court in the eyes of millions. But it is just the start of what some on the Democratic left would like to accomplish.
The Electoral College has been on the chopping block since 2000. If it goes the way of the dodo, presidential campaigns thereafter will be determined by who has the greatest allegiance in the biggest cities of the largest states. To override the supposed Republican advantage in the Senate, where every state enjoys equal representation, some progressives would grant statehood to Washington, D.C., and to Puerto Rico, and maybe Guam and American Samoa while they’re at it. These changes would make it much easier for Congress to eliminate private health insurance, enact universal vote by mail, “decarbonize” the economy, grant citizenship to illegal immigrants and voting rights to noncitizens, suppress political speech, resume taxpayer funding of abortion, and cross out the Second Amendment. The sheer number of bad ideas in play would be overwhelming.
Now it is true that at least the first item on this agenda would be debated according to the present rules. And the multiple veto points within the American kludgeocracy would no doubt interfere with, and sometimes upend, the boldest plans of the progressive Democrats. It is also the case that incorporating new states gives rise to challenges both constitutional (are we really willing to grant the remaining residents of the federal District of Columbia—the first family—three electoral votes?) as well as political (does Puerto Rico even want to be a state?). But the very fact that we are having this conversation at all—and that Biden, at this writing, has neither ruled out the court-packing scheme nor said whom he would nominate to the Court—ought seriously to worry defenders of the Founders’ Constitution.
In 1963, in the first chapter of The Conservative Affirmation, Willmoore Kendall offered his definition of American conservatism. Conservatives, Kendall wrote, oppose the “Liberal Revolution” that would replace representative government with majoritarian democracy:
Put an end, the Liberals insist, to ‘rural overrepresentation’ in the lower house of Congress and in the state legislatures—bringing them in line with the principle one-man one-equal-vote. And that principle, once adopted (it is French political philosophy, not American), must call finally for abolition even of the U.S. Senate as a check on majorities, and would in any case make the House the creature of numerical majorities at the polls. Abolish the electoral college, the Liberals insist further, and so make the President also the direct agent of the popular majority. Reform the party system, the liberals insist still further, so that each of our parties shall be programmatic, ideological—like those of the ‘real’ democracies in Europe—and that the two parties together shall submit, at election time, a genuine choice to the electorate. Abolish the filibuster—so runs the next point in the program—because it frustrates, serves no other function except to frustrate, the will of the majority. Rescind the seniority-principle in congressional committees, the program continues; it also obstructs the will of the majority. Now give the Liberal attackers their way on all these points, and the form of government explicated in the Federalist Papers will be no more.
That is what 2020 is about.
June 15, 2020
By Peter Roff • Townhall Finance
The trend towards a cashless society took a big leap during the worst of the COVID-19 crisis. The ability to purchase vital goods online using credit or debit cards and third-party payment sites made it possible for families to function as the brick and mortar outlets were forced to temporarily close.
It’s a convenience, but one that comes with a price. Americans should be concerned about the potential for the government, for banks, and for payments companies to infringe on their freedoms by preventing them from making legal purchases, barring them from platforms, or using their transaction history against them.
This may be one of the reasons cash continues to be the most frequent payment instrument. It’s used in 30 percent of all transactions and more than half of transactions under $10. Those numbers are likely to drop as more and more vendors are adopting cashless transaction policies. Some retailers, sports stadiums, restaurants, and other businesses now refuse to accept cash – and the number of them who do not is growing at an alarming rate.
This all impacts consumer freedom of choice. Even absent the pressure from the government, payment providers like PayPal have unilaterally closed the accounts of organizations because of complaints about their political leanings. Payment processing and financing firms are putting restrictions on the legal firearm industry like the 2018 Citibank prohibition on its business partners selling firearms to customers under the age of 21 and Bank of America’s announcement it would stop lending to certain firearms manufacturers.
And, along with PayPal, Square, Stripe, and Apple Pay do not allow their services to be used to purchase firearms. “We do not believe permitting the sale of firearms on our platform is consistent with our values or in the best interests of our customers,” said a spokesman for Square.Other banks and card companies have explored methods of identifying gun purchases – such as unique purchase codes for gun retailers and requiring specifics on the type of gun purchased – possibly as a prelude to restricting those transactions.
To dictatorial regimes, the advent of the cashless society is a boon. China is planning to eliminate cash as a means of payment as it seeks to further control its citizens and monitor their behavior. Leaders in Beijing understand cash is a ‘censorship-resistant’ currency whose use cannot be controlled, approved, or denied by a third party or government.
The Chinese can do this because whenever a customer uses a digital payment instrument, card product, or mobile app, they are giving merchants, financial institutions, and technology companies the ability to track the time, location, amount, and category of every purchase made. That data allows them to assign Social Credit scores to individual citizens and determine which goods and services they can and cannot buy. In the United States, that same information is collected and sold to other commercial institutions, often without the consumer knowing it.
In a completely cashless society, the choice of whether to leave a “digital transaction trail” will be made for us. We won’t have the option while financial intermediaries are put in the awkward position of making decisions for us about what we can buy when deciding what products and providers they’ll work with and which ones they’ll freeze out because of government or political pressure.
A handful of states and cities have enacted laws protecting the use of cash but that might not be enough. The move toward a “cashless society” still accelerates. Recent surveys show that 78 percent of all Americans would support a federal law requiring all businesses to accept cash. It may be time to head in that direction.
The potential problems are not far-fetched fringe notions coming from the tinfoil hat brigade. They’re real and have already been glimpsed in Operation Choke Point, an Obama Administration initiative to quietly pressure banks to withhold services from payday lenders, firearms dealers, and other legal businesses. Without due process, firms found themselves locked out of the financial marketplace as their banking relationships terminated abruptly. In a cashless society, actions like that could be undertaken with a line of code, with no one the wiser until it happens. Yet most Americans are still completely unaware.
May 10, 2020
By pressuring companies to put ‘sustainability’ before profit, they hurt pensioners, small investors, and all those who depend on a robust economy.
By ANDREW STUTTAFORD • National Review
Many years ago now, Milton Friedman explained something that should never have needed explaining, when, writing for the New York Times Magazine, he reminded his readers what —and whom — a company is meant to be for:
In a free-enterprise, private-property system, a corporate executive is an employee of the owners of the business. He has direct responsibility to his employers. That responsibility is to conduct the business in accordance with their desires, which generally will be to make as much money as possible while conforming to [the] basic rules of . . . society, both those embodied in law and those embodied in ethical custom. . . .
What does it mean to say that the corporate executive has a “social responsibility” in his capacity as businessman? If this statement is not pure rhetoric, it must mean that he is to act in some way that is not in the interest of his employers.
The executives who retool a company’s mission to suit a particular conception of “social responsibility” are spending shareholders’ money on a moral agenda unrelated to company objectives, an affront that’s only made worse if their crusade depresses returns, share price, or both.
Friedman was writing in 1971. Since then, like so many bad ideas, corporate social responsibility has become institutionalized. To take a recent example, in 2017 JP Morgan Chase gave $500,000 to the Southern Poverty Law Center, an organization that, sadly, has strayed far from its original ideals. Had they learned of it, this gift would probably have irritated a good many shareholders. The employee who had to justify it was — you guessed it — the bank’s “head of corporate responsibility,” a title that signifies how deep the rot has gone.
It’s been a long time since companies’ supposed social responsibility could be discharged by a handout or two, but the pressure on them to toe some outsider’s line has, in recent years, been stepped up. Often repackaged as a demand that corporations be measured by the extent to which they match arbitrary and ever-tightening E (environmental), S (social), and G (governance) standards, it is now a way of corralling private enterprise without the bother of legislation. The G, which can cover such issues as transparency and compliance, is relatively uncontroversial, but so far as many shareholders are concerned, insisting on the E and, to a lesser degree, the S, which can range from the benign (worker safety) to the malign (stipulating what legal products a company may or may not sell), is a form of expropriation.
It is a mark of just how ingrained the ideas behind ESG have become that the Financial Times, mistakenly thought by the old-fashioned to be the house journal of capitalism, now has a section presumptuously called “Moral Money,” billed as “the trusted destination for news and analysis about the fast-expanding world of socially responsible business, sustainable finance, impact investing, [ESG] trends, and the UN’s Sustainable Development Goals” — a rebarbative combination for which those running the FT clearly believe there is an audience.
If Davos is any indicator, they are right. Here’s an extract from the World Economic Forum’s “Manifesto for 2020”:
A company serves society at large through its activities, supports the communities in which it works, and pays its fair share of taxes. It ensures the safe, ethical and efficient use of data. It acts as a steward of the environmental and material universe for future generations. It consciously protects our biosphere and champions a circular, shared and regenerative economy. It continuously expands the frontiers of knowledge, innovation and technology to improve people’s well-being. . . .
A company is more than an economic unit generating wealth. It fulfils human and societal aspirations as part of the broader social system. Performance must be measured not only on the return to shareholders, but also on how it achieves its environmental, social and good governance objectives.
Unfortunately, what goes on in Davos does not stay in Davos.
The existence of the FT’s “Moral Money” section is yet more evidence of this larger trend. In a recent edition, we could read about how a Bank of America analyst examined the environmental implications (at least as seen from the perspective of climate warriors) of bringing supply chains closer to home in the wake of COVID-19. The author’s conclusion that doing so would reduce emissions would, in happier times, not have concerned investors — their interest would only have been in the financial consequences of such a change. But we do not live in those times.
Banks are not charities. They would not write research reports of this type unless there was a market for them, and there is. ESG investing is becoming big business. Thus, as one of the “Moral Money” team reports:
According to research from Sustainable Research and Analysis, an independent research shop based in New York, the total assets held in sustainable mutual funds and ETFs hit $1.6tn in 2019, growing from a base of just $400bn at the end of 2018. Even with the coronavirus outbreak sending markets into a tailspin, ESG funds added a further $500bn in assets through Q1 2020.
Reading on, there is a glimmer of hope:
But only a small portion came from net new money. In 2019, investment managers rebranded 475 existing funds to incorporate ESG factors, which accounted for more than $1tn, or 86 per cent of the total “new” ESG assets.
So Wall Street is behaving with its customary cynicism, and in the moral universe of “Moral Money” that will not do:
On the face of it, this seems troubling and sends up red flags for greenwashing.
It would take a heart of stone not to laugh here, but one would be laughing too soon:
Henry Shilling, director of research at Sustainable Research and Analysis, says most asset managers are not just slapping an ESG label on their funds and calling it a day. “Most of the rebranded funds have adopted ESG integration strategies,” he said, explaining that they had explicitly changed their prospectus documents to include ESG as a part of their investment process and were engaging with portfolio companies on ESG issues.
“Engaging with,” however, can mean sending a token memo or doing something more substantive. So it’s time for some more pearl-clutching:
Even with all of the companies making public commitments to cut emissions and look out for stakeholder interests, a shocking minority have gone so far as to tie executive pay to any sort of ESG metric. In fact, new research from Sustainalytics shows just 9 per cent of all companies in the FTSE AW index have done so. And on top of that, the vast majority of those that have done so have only targeted occupational health and safety.
“Only” is doing a lot of work there.
It’s worth pausing to note the citations of Sustainanalytics, which describes itself as “the leading independent global provider of ESG and corporate governance research and ratings to investors,” and of Sustainable Research and Analysis, a firm that serves “as a source for sustainable investment management information, research, opinions and sustainable fund ratings.” Both are part of the flourishing (and profitable) ecosystem that ESG investing has created. It encompasses consultancies, advocacy organizations, “chief sustainability officers,” and many, many more rent-seekers besides. ESG is bad news for investors, but it is not a bad way of filling the wallets of those that feed off it.
None of this is to deny that there is room for ESG-based investment strategies. If investors want to base their stock selection in whole or in part on ESG criteria, that is, of course, up to them, and if investment companies wish to market ESG-compliant funds, that’s fine. Funds that will not invest in companies that, say, sell guns or alcohol have been around for a long time. ESG-compliant funds are simply an extension of the entirely reasonable idea that investors should not be forced to choose between their principles and smart investment. The more choice that such investors have the better.
But choice is the key word here. Much of the pressure for companies to raise their ESG game comes either directly from state or other governmental pension funds, which are not exactly free from political pressure and ideological bias, or from the investment companies that wish to sell to them. Thus “Moral Money” reports on a number of proxy fights over ESG issues brewing at companies such as ExxonMobil and the British bank Barclays. Among those named as leading the charge in these battles are Brunel Pension Partnership, which manages the pension funds for ten local British governments, the Liverpool-based Merseyside pension fund (also for local government employees), and — this is far from just a British thing — the New York State Common Retirement Fund.
Turn to Brunel’s website, and you find that:
[Brunel’s] investment team [has] the ability to clearly think in 10 to 20-year timeframes. As such, environment and social risk considerations, along with good governance and stewardship, are integrated into [its] decision making processes. . . .
The key objective of our climate policy is to systematically change the investment industry to ensure that it is fit for purpose for a world where temperature rise needs to be kept to well below 2°C compared to pre-industrial levels.
Pension funds ought to be trying to deliver the best possible economic returns for their pensioners, who are, in a sense, captive clients. Equally, where such pensions are funded or, in the case of defined-benefit schemes, underwritten in whole or in part by taxpayers, there is — or there ought to be — a duty owed to those who may end up on the hook for them. But for Brunel, other objectives now seem to have come into play.
A still bigger problem may yet come from investment groups such as BlackRock. As the FT notes, the firm is currently coming under fire from ESG activists, despite the stance taken by its chairman and CEO, Larry Fink, who claimed in a letter earlier this year that “climate change has become a defining factor in companies’ long-term prospects,” and went on to explain how:
BlackRock [has] announced a number of initiatives to place sustainability at the center of our investment approach, including: making sustainability integral to portfolio construction and risk management; exiting investments that present a high sustainability-related risk, such as thermal coal producers; launching new investment products that screen fossil fuels; and strengthening our commitment to sustainability and transparency in our investment stewardship activities.
More details were set out in a letter to clients:
We have been working to improve access for several years — for example, by building the industry’s largest suite of ESG ETFs, which has allowed many more individuals to more easily invest sustainably. . . . We intend to double our offerings of ESG ETFs over the next few years (to 150), including sustainable versions of flagship index products, so that clients have more choice for how to invest their money.
Some of this merely reflected BlackRock’s self-interest — and there’s nothing wrong with that. As noted above, extending investor choice is to be welcomed. But there is also the fact that:
Every active investment team at BlackRock considers ESG factors in its investment process and has articulated how it integrates ESG in its investment processes. By the end of 2020, all active portfolios and advisory strategies will be fully ESG integrated — meaning that, at the portfolio level, our portfolio managers will be accountable for appropriately managing exposure to ESG risks and documenting how those considerations have affected investment decisions.
Investors are free not to invest with BlackRock, but because BlackRock is so large, that doesn’t eliminate the problem that this new policy could pose. Before the coronavirus crisis began, BlackRock had over $7 trillion under management. If a company doesn’t play by BlackRock’s ESG rules, it risks shutting itself off from a potentially substantial source of capital and/or support for its share price. If a company’s management decides that it doesn’t want to run that risk, it may have to adopt policies that damage the business’s long-term prospects. That might help the share price, at least for a while, but it is hardly a desirable outcome.
Even if a company has no interest in having BlackRock as a shareholder, BlackRock may have an interest in it. Once BlackRock takes a stake in a company, the chances are that it will apply pressure on management, as any shareholder has the right to do. Most shareholders only do so to increase their return, but BlackRock, whatever its claims about the connection between “sustainability” and longer-term profitability, has other targets in mind:
We have engaged with companies on sustainability-related questions for several years, urging management teams to make progress while also deliberately giving companies time to build the foundations for disclosure consistent with the Sustainability Accounting Standards Board (SASB) and TCFD. We are asking companies to publish SASB- and TCFD-aligned disclosures, and as expressed by the TCFD guidelines, this should include the company’s plan for operating under a scenario where the Paris Agreement’s goal of limiting global warming to less than two degrees is fully realized. Given the groundwork we have already laid and the growing investment risks surrounding sustainability, we will be increasingly disposed to vote against management when companies have not made sufficient progress. [Emphasis added.]
SASB and TCFD are two other creatures in the ESG ecosystem. The former was once chaired by Michael Bloomberg, while the latter still is. SASB says that it is on a “mission . . . to help businesses around the world identify, manage and report on the sustainability topics that,” it claims boldly, if inaccurately, “matter most to their investors.” Meanwhile, TCFD, the Task Force on Climate-related Financial Disclosures, says it aims to “develop voluntary, consistent climate-related financial risk disclosures for use by companies in providing information to investors, lenders, insurers, and other stakeholders,” an objective with a clever twist: If companies do not go along with these “voluntary” disclosures, their banks and insurers — part of a sector unusually susceptible to political pressure — may turn the screws.4
As a shareholder, BlackRock has every right to insist that the managements of the companies in which it invests comply with its diktats. Equally, other shareholders are free to insist that BlackRock be told to take a hike, at which point the whole thing can be thrashed out at a general meeting. But many of the other shareholders will also be institutional investors. Even if they do not agree with BlackRock’s agenda, they may feel compelled by commercial pressures of the type that I have mentioned above to go along.
In effect, therefore, many companies — and not just those that are publicly listed — will be forced to change the way they do business as they try to keep up with ever-more-stringent rules set not by democratically elected legislators but by the unaccountable, the ambitious, the greedy, and the fanatical. Milton Friedman would have been appalled (if not altogether surprised) that activists such as these ESG vigilantes could exercise such a power through their ownership of shares. Today’s small investors, pensioners, and, for that matter, anyone else who depends on a robustly growing economy ought to be angrier still.
February 22, 2020
Wisconsin's second-largest school district won't back off a policy of keeping minor students' transgender experimentation secret from their parents despite a new lawsuit filed Tuesday.
By Joy Pullmann • The Federalist
Wisconsin’s second-largest school district so far won’t back off a policy of keeping minor students’ transgender experimentation secret from their parents despite a new lawsuit filed Tuesday.
A group of parents represented by Wisconsin Institute of Law and Liberty sued after the Madison Metropolitan School District refused to alter its policy of concealing childrens’ transgender behavior and related medical records from parents, no matter how young the child is. The district oversees children as young as preschoolers, and teaches gender identity politics to all ages, which research suggests may contribute to children identifying as transgender.
Among other things, the district’s policy at the heart of the lawsuit states: “School staff shall not disclose any information that may reveal a student’s gender identity to others, including parents or guardians and other school staff, unless legally required to do so or unless the student has authorized such disclosure.” It also says school staff will “discuss with the student contingency plans in the event that their privacy is compromised.”
Fourteen parents of children who attend Madison schools sued on grounds the policy violates their parental rights and longstanding requirements for parent approval of much less affecting activities such as attending prom and taking Tylenol. One of their court filings notes the district’s deceptions include “to evade the state law that requires Wisconsin schools to give parents access to all education records, the [Gender Support Plan] form directs teachers to keep this paperwork ‘in your confidential files, not in student records.’”
“MMSD prioritizes working in collaboration with families to support our students and it is always our preferred method of support. MMSD must also prioritize the safety and wellbeing of every individual student who walks through its doors each day. It is with this focus, the district stands by its guidance document on transgender and non-binary students, and recognizes its tremendous responsibility to uphold the right of every child to be educated in a safe, all-inclusive and nondiscriminatory learning environment,” said a Tuesday statement from Public Information Officer Tim LeMonds in response to the lawsuit. LeMonds said the district wouldn’t discuss the lawsuit until its lawyers had reviewed it.
Madison schools oversee approximately 27,000 students and spend $15,000 per student per year, according to federal records. On the latest state tests, which are of lower quality than independent tests such as the National Assessment of Educational Progress, 61 percent of Madison’s students were not proficient in reading and 59 percent were not proficient in math. In both cases, Madison students scored below state averages.
Madison’s transgender policy document tells teachers and staff how to handle a variety of LGBT issues. It says gender dysphoric children may wear opposite-sex clothing and participate in opposite-sex locker and changing rooms. “Transgender, non-binary, and gender-expansive students may request time to address their class about their gender identity and pronouns,” the guide says.
In 2017 at a California public school, a kindergartener did this sort of “gender reveal” to classmates, who went home afterwards with tears and confusion to parents who had not been informed of the event beforehand. Last year in a Madison elementary school, a male science teacher showed all the K-5 students a “gender reveal” video to come out to the children as transgender.
Madison’s policy document tells teachers explicitly to “Teach about gender! Include books and lessons that are inclusive of all identities and send messages of empowerment to students.” A district website guiding teachers how to do this provides book lists and lesson plans from a nationwide program called Welcoming Schools, run by the LGBT activist group Human Rights Campaign.
The Madison schools’ “top picture books” list from HRC recommends titles for preschoolers through early elementary children, including the book by transgender celebrity teen Jazz Jennings “I Am Jazz,” which tells children they can have boy brains in girl bodies. HRC and the National Education Association, the nation’s largest teachers union, sponsors annual readings of “I Am Jazz” in public schools and libraries.
Madison’s recommended classroom list also includes a picture book for grades one to three about Harvey Milk, “Pride: The Story of Harvey Milk and the Rainbow Flag.” Milk repeatedly had sex with underage boys, according to his biographers.
Another Madison schools-recommended book, for grades preschool to two, is titled “Jacob’s New Dress.” For grades four to six — children ages nine through twelve — the district recommends the book “Queer Heroes: Meet 53 LGBTQ Heroes From Past and Present!” and one for grades five to nine the list summarizes this way: “Zenobia July is starting a new life in Maine with her aunts. People used to tell her she was a boy; now she’s able to live openly as the girl she always knew she was.”
A parent whose kindergartener attends a Madison elementary school sent The Federalist screenshots of a coloring book he says his daughter was sent home with for Black Lives Matter Week this February. Besides informing five-year-olds what transgender and queer mean, it also celebrates the Black Panthers and and the long-standing Communist Party goal of “Disrupting the Western-prescribed nuclear family structure.” The district’s transgender policy also pledges it to “model gender-inclusive language that…disrupts the gender binary.”
Selected coloring book pages that match what the father sent are below, obtained from BlackLivesMatteratSchool.com. That website also shows videos of elementary schoolers in Milwaukee public schools, Wisconsin’s largest school district, waving a “Pan-African” flag instead of an American flag. The man who inspired the flag says its red stripe represents communism (“the reds of the world”). Both the coloring book and the recommended LGBT books equate African-Americans’ equal rights with LGBT special rights, even though race is inborn and unchangeable while sexuality is a fluid behavior for which researchers still cannot find a genetic component.
LeMonds said the coloring book was likely a single teacher’s lesson decision and was not recommended by the school district like the LGBT books above.
As a result of the district’s social conditioning efforts with kids, “Now being an [LGBT] ally gains kids social capital, and now being an ally is cool,” says Kristi Nelson, a Madison school psychologist, in a video about the Welcoming Schools program. This is the kind of social environment a Brown University researcher found may contribute to a “social contagion” in which children who are often sad or distressed for other reasons find desperately needed positive attention in identifying as transgender.
This isn’t just happening in Madison, which has long been a far-left city. The Wisconsin Department of Public Instrution recommends similar resources from LGBT activist group GLSEN. And the U.S. Court of Appeals for the 7th Circuit, which oversees Wisconsin, Illinois, and Indiana, in 2017 upheld a Wisconsin transgender student’s demand to use opposite-sex bathrooms and locker rooms.
“The decision makes the 7th Circuit the first appeals court to interpret both Title IX and the Constitution as protecting transgender students from discrimination — and requiring schools to allow transgender students to use the bathroom matching their gender identity,” reported the Washington Post.
Luke Berg, an attorney representing parents through WILL, said in an interview, “I haven’t done an extensive survey in Wisconsin although I’ve heard that other districts have similar policies. Madison’s is probably the worst but I think a lot of these groups are telling schools that this is what they have to do, that this is legally required, that students have a legal right to exclude their parents.”
The suing parents seek a preliminary injunction to keep Madison’s transgender policy from affecting children as the lawsuit is worked out. That injunction, however, would not apply to the LGBT picture books, coloring books, and other materials Madison teachers are showing kids in class. It would only apply to the district’s policy of hiding children’s dysphoria from parents after the dysphoria has manifested.
In their court briefs, the parents’ lawyers note that 80-90 of children who identify as transgender ultimately choose to live as their sex — if they are not given transgender hormones. Only 20 percent of children whose bodies are mutilated with hormones and surgery before puberty ultimately choose to live as their sex.
“So, by enabling and encouraging children to transition at school without parental consent, the District may be pushing children down that path, causing gender dysphoria to persist when it otherwise would have desisted,” the parent’s injunction application says.
A hearing on the case is likely by April, with a court decision expected a month or two afterward, Berg said.
September 6, 2019
Hosing human waste off pavement reminds one leftist of hoses used against civil-right activists.
By KATHERINE TIMPF • National Review
A councilman in Seattle is reportedly opposed to hosing sidewalks that reek of excrement near a local courthouse because he fears that it might be racially insensitive.
No, this is not a joke.
The area surrounding King County Superior Court includes a homeless shelter and other social-services organizations and has become an “unsanitary and potentially frightening” scene — one “that reeks of urine and excrement” — according to an article in the Seattle Times. Desperate for help with the disgusting environment, two of the court’s judges have asked the city to please power-wash the poop-covered sidewalks. That seems like a pretty reasonable request, but apparently, one councilman is worried that doing so might be a form of microaggression.
According to the Times, Councilmember Larry Gossett “said he didn’t like the idea of power-washing the sidewalks because it brought back images of the use of hoses against civil-rights activists.”
Now, I’m not trying to diminish the struggles of civil-rights activists, but Gossett’s concern here is nothing short of insane. I mean, seriously — who even thinks of such a thing? I see people power-washing bodily fluids off of the streets of New York City (including streets outside of courthouses) all the time, and I have not once seen any of them being called racist. To be fair, this city does still smell terrible, so the power-washing plan might not be the perfect solution on practical grounds, but at least it’s a start. What else are you going to do — not wash them? Because I really, really reject the idea that leaving sidewalks covered with human bodily waste is the less offensive move in this (or any) situation.
Anyone over the age of three knows that if you see poop somewhere, it’s supposed to be cleaned up. What’s more, most little kids could probably also tell you that said clean-up is supposed to involve water. In fact, before this, I would have told you that this is probably the least controversial opinion in human history.
But social-justice alarmism can do a great job of turning the clearly uncontroversial into an outrage, and often at the expense of basic logic and practicality. It’s not that all social-justice activism is bad, of course. It’s great to be nice, and it’s great to be sensitive, but an obsession with social justice and political correctness can make people’s brains start to malfunction — and I’m not sure that I’ve ever seen a better example of that than this.