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Woke Priorities Borrowed Trouble for Belly-Up Bank
Suzanne Bowdey-Commentary : Mar 14, 2023 The Washington Stand
"I've said for a long time that Democrats destroy everything that they touch. And this is an example of that. They have stepped into the financial arena. They're attempting to force a philosophy and agenda down into our banking system to limit our access to capital unless we believe a certain way. That's wrong." -Representative Harriet Hageman (R-WY)
[WashingtonStand.com] It says a lot about the state of our nation when the country's second largest lender, Bank of America, feels the need to reassure people: "We are capitalists." CEO Brian Moynihan reiterated that message to shareholders last week after the uproar over his company's woke investments. Now, a handful of days later, as the collapse of Silicon Valley Bank (SVB) sparks panic across the market, the critics seem right to wonder: Will corporate activism bankrupt us all? (Image credit: Tony Webster-Flickr /Creative Commons-CCBY2.0)
As the Biden administration races to put the fire out of the second-biggest bank failure in US history, experts are still trying to put together the pieces of SVB's collapse. This was, after all, a bank ranked in Forbes's top 10 as recently as 2021, hailed by Newsweek as one of America's "most responsible companies," and considered one of the fastest-growing corporations by Fortune.
But there were nagging concerns too. Dubbed a "climate bank" by one solar industry bigwig, SVB had a virtual monopoly on banking with green company clients (more than 1,500, The New York Times counts). Over the last several years, Silicon Valley Bank had issued "billions in loans" to firms combatting global warming. Now that same tunnel vision threatens to upend a lot of the environmental movement, Arcadia's chief executive Kiran Bhatraju warns. "When you have the majority of the market banking through one institution, there's going to be a lot of collateral damage."
But it wasn't just the environmental bug that bit them. SVB was so entrenched in ESG (environmental, social, governance) investing that it obsessed over LGBT advocacy and diversity, equity, and inclusion (DEI) programs, even hiring a top executive to manage the company's "safe spaces," month-long Pride campaign, and programs to celebrate gay-and trans-identifying kids. While the bank prioritized radical causes (60-plus pages worth), key financial posts went unfilled—including, the Daily Mail points out, a head of "risk assessment," which sat vacant for the last nine months while the company spiraled into insolvency.
"I mean, again, that just speaks volumes about where these people's priorities were," The Heritage Foundation's E.J. Antoni told Family Research Council President Tony Perkins.
The company was such an ESG flag-carrier, James Pinkerton points out, that other CEOs were grieving the loss of its rainbow and green leadership as much as the bank's crash. In a now-deleted tweet, one former hedge fund manager insisted the SVB collapse was "devastating" because "they supported women, minorities, & the LGBTQ community more than any other big bank. This includes not just diverse events, but actual funding. SVB helped us move one step forward; without them, we move two steps back."
Of course, some would argue, that mission creep is exactly what's bringing institutions like SVB to the brink. Green investing doesn't equal green returns. On the contrary, it poses a huge risk to millions of innocent bystanders, as Home Depot co-founder Bernie Marcus lamented on Fox. They're "more concerned about global warming than ... shareholder return. And these banks are badly run because everybody is focused on diversity and all of the woke issues and not concentrating on the one thing they should—which is shareholder returns. ...I feel bad[ly] for all these people that lost all their money in this woke bank."
But The Political Forum's Stephen Soukup, author of "The Dictatorship of Woke Capital," would caution people against blaming all of SVB's woes on wokeism. "ESG was not the cause of Silicon Valley Bank's failure," he told The Washington Stand. "There is nothing to suggest that its ESG lending or in-house ESG obsessions precipitated the run on the bank or its ultimate failure. At the same time, however, it's worth noting that ESG is a part of the culture of corruption and misallocation of capital that was enabled by the Fed's extended easy-money policy."
More than anything, Soukup explained, "ESG can be seen as a symptom of a broader illness at SVB—a sign that the bank had strayed from sound business practices, in large part because the Fed made it easy for it to do so. ESG is an indulgence, something that occurs on a mass scale only when times are good and money is plentiful for such extraneous, non-essential business expenditures. As the Fed tightened and money became less plentiful, ESG became an anchor at SVB, part of larger problem that couldn't be corrected overnight."
Meanwhile, Congressman Warren Davidson (R-OH) could only shake his head at the role the federal government has played under Joe Biden in propagating this ESG scam. "Sadly," Davidson pointed out, "bank regulators—including the Federal Reserve—are pushing this radical agenda elsewhere. Truly, listening to them can pose a systemic risk."
Fortunately, in red states, the stampede away from ESG titans like BlackRock has helped put the squeeze on asset managers who insist on putting politics above profits. In the past two years, ringleader Larry Fink has already lost $5 billion in business from pension plans in West Virginia, Florida, Louisiana, Arizona, Missouri, Arkansas, Utah, and South Carolina—with more states (Texas, Oklahoma, and Kentucky) threatening to walk. If the message hasn't been received that ESG is terrible for business, then maybe the cautionary tale of SVB will be.
As House Rep. Harriet Hageman (R-WY) argued on "Washington Watch" Monday, "I've said for a long time that Democrats destroy everything that they touch. And this is an example of that. They have stepped into the financial arena. They're attempting to force a philosophy and agenda down into our banking system to limit our access to capital unless we believe a certain way. That's wrong."
At the very least, Perkins insisted, this should be "an opportunity to look under the hood to see if all of these left-wing ideas are causing [companies] to take their eye off the ball and head down the wrong trail. ... Because this is what you have when you have government [interference]. They are picking winners and losers by the policies and the money they give to these entities. We're quickly losing the whole idea of free enterprise and capitalism."
He's right. Virtue signaling has become more than an expensive hobby for big companies. It's become a deadly cancer eating away at the principles that make America prosperous. And while ESG may not have been the sole cause for SVB's failure, "it was—and IS—a symptom of a broader sickness," Soukup agrees. "Let's hope the government can help contain this pandemic better than it did the last one." Subscribe for free to Breaking Christian News here
Suzanne Bowdey serves as editorial director and senior writer at The Washington Stand.
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