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.