Who's really politicizing finance?
Allison Ball is the State Treasurer of Kentucky. She's one of several state treasurers who have taken a stance against woke capital.
I recently talked with Allison on my podcast "Meeting of Minds." Below are a few highlights from that discussion, lightly edited for clarity and length.
Jerry: Attorneys general are now starting to do some things to really push back about this. And what I'm seeing from As You Sow and the ESG industrial complex, is "these political officials are politicizing finance. They're bringing politics to finance." What do you say to that?
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Allison: It's humorous to hear them say that, because it's entirely the opposite. What we're trying to do is we're trying to return finance to finance. We don't want pension dollars to be used for political reasons. Period. We want it to be used as an investment. What it was supposed to be: the old Milton Friedman approach about making sure you're getting good returns. There's treasurers on both sides of the aisle, and we should not be promoting one political output or another political output. It should just be about: good investments, good returns. It's wild that people who are pushing ESG say we're the ones being political, because the only people who are trying to push little political agendas, are the folks who are pushing ESG.
Jerry: Just look at the origins: the theoretical foundation of it it came from a left-wing academic sociologist, then it went to the United Nations. The United Nations Environmental Project commissioned the first study that said "environmental social governance" in 2005. It came from the United Nations. It didn't even come from finance departments of universities, let alone financial institutions, it came from the academic and U.N. world. And if one group, If the Liberals say this isn't political and the conservatives say it's political, it's political. I just can't find any conservatives pushing ESG, I can only find liberals pushing ESG. So saying it's not political, it doesn't pass the smell test in my view.
Allison: I agree. It doesn't stand up to scrutiny.
Jerry: And the institutions that are pushing it are almost always ideologically committed. If you look at these proxies and say, "who is Arjuna Capital?" or what is the "such-and-such education fund?" and you go to the website, It's absolutely clear that there's a political agenda. So just own it, just be honest: it's an attempt to impose liberalism using the financial process.
There are three things that you've been involved with directly that I think are very important. One is working with the legislature. Because there's some things that treasurers can do on their own, and there's some things they have to do with the legislature: working with the legislature to reform the law so that a company, which is attacking one of your main industries, fossil fuels, will not be eligible for procurement for large contracts with the state. Because you don't want to help organizations that are trying to hurt your economy.
Allison: You're referring to a bill that we got passed last year, we called it "The Fossil Fuel Boycott Bill." Kentucky is a fossil fuel producing state. We're a coal State. We have been for a long time. We're also an oil and gas state. I'm from Eastern Kentucky, I'm from the mountains, and that has coal, and oil, and gas. These are things that I've always grown up knowing are incredibly important to my state, and they're important to the whole country.
So economically, we have to have those industries in Kentucky. They're our lifeblood, we need them to continue. Even our businesses depend upon it, because we've had cheap energy in Kentucky because we've had access to these things. So as I've been looking at ESG, and the "E" being used very strongly to try and eliminate the fossil fuel industry, to try to wipe it out of existence, we pushed for this bill. What we said is that if you're a company who has said you want to boycott fossil fuels, you want to eliminate them, then we're not going to do business with you in Kentucky. We're not going to have a state contract with you, and we're also not going to include you in our investments. We're going to divest you, we're not going to put you in our portfolio to begin with. You're not going to be a part of what we're doing in Kentucky. If you're going to boycott us, we're going to boycott you.
I think this is important for other states to know too, whether you are a fossil fuel producing state or not, this is an important issue. We cannot be economically healthy as a country unless we have a strong energy source. And right now, it's fossil fuels. We can't wipe it out of existence right now, and we're seeing this happen in Germany, where where they've really pushed to try and eliminate things for a long time. And now they're looking at not having enough energy, or incredibly costly energy. So while this is important in Kentucky, it should mean something to everybody.
Jerry Bowyer is financial economist, president of Bowyer Research, and author of “The Maker Versus the Takers: What Jesus Really Said About Social Justice and Economics.”
