Politicians are defined by the hills they’re willing to die on. President Biden’s decision to not merely veto a bipartisan resolution disapproving of his Department of Labor’s ESG investing rule, but to demagogue members of his own party as Marjorie Taylor Greene-enabling MAGA Republicans sends a clear signal that he’s willing to fight to the death to defend the far left. Move over Greta Thunberg, AOC and soup-throwing radicals who are willing to deface Van Gogh paintings to save the planet. Make room for Uncle Joe.
Biden tweeted after his veto:
Democratic Senator Joe Manchin of West Virginia wasn’t impressed with Biden’s climate tantrum. Manchin said, “This Administration continues to prioritize their radical policy agenda over the economic, energy and national security needs of our country, and it is absolutely infuriating … This ESG investing rule will weaken our energy, national and economic security while jeopardizing the hard-earned retirement savings of 150 million West Virginians and Americans. Despite a clear and bipartisan rejection of the rule from Congress, President Biden is choosing to put his Administration’s progressive agenda above the well-being of the American people.”
Republican Senator Mike Braun of Indiana echoed this in bipartisan fashion, saying, “Today, President Biden used his first veto to reject a bipartisan majority consensus in the House and Senate that Americans’ retirement savings should be invested to get the best return, not to support a political agenda. Americans’ 401(k)s have taken a beating from the Biden inflation crisis, and now as one of the most ESG-focused financial institutions in the U.S. has collapsed in Silicon Valley Bank, President Biden is doubling down on prioritizing a progressive agenda over Americans’ retirements and the will of Congress. Good luck explaining this one.”
Biden will indeed need luck convincing Americans that the Manchin-Braun consensus is actually a secret MAGA and MTG cabal.
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The central conceit of the ESG investing debate – which elements on the left and right miss – is the mistaken belief that individual decision-makers in the market are waiting for policymakers, regulators or fund managers to tell them what to think about climate risk before making decisions. Consumers and investors don’t need Biden’s DOL or any overseer to tell them what to think about how to invest Americans’ hard-earned money. After all, if ESG-related investments work to the benefit of retirees, no regulation should be necessary in the first place. Politicizing ESG through regulations and mandated risk disclosures devalues any worth ESG could have in a free market. The Manchin-Braun consensus, on the other hand, trusts the invisible hand and humbly defers to the wisdom of crowds over the folly and sanctimony of virtue-signaling elites.
>>>READ: Biden’s Demagoguery is an Existential Threat to Climate Progress
As I explained recently on CNN, SVB’s “A” ESG rating didn’t save them from their mismanagement of risk. The best way to resolve both the ESG and banking fight is to revive the idea that wealth should be defined by what people are willing to pay for goods and services they value, not on what government prints or any particular social goal. The problem in Washington is tooth fairy economics – the expectation that if you lose something, money magically appears under your pillow. An economy without losers makes us all losers.
Both parties should trust competitive markets and let “We the People” decide. Any risk assessment that isn’t based on price signals in a free market is destined to create perverse incentives and market distortions that will be corrected more painfully than if consumers initially made those decisions themselves.
Biden’s veto and clumsy condemnation of critics will make a polarized country even more divided. Throwing rhetorical soup on Manchin won’t save the planet, nor will it make anyone’s retirement more secure.
The views and opinions expressed are those of the author’s and do not necessarily reflect the official policy or position of C3.
