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Black Rock latest to leave Net Zero Alliance

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From The Center Square

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US House committee investigating 60 companies over ESG policies

Blackrock Inc. is the latest to announce it has left a United Nations-backed Net-Zero Banking Alliance (NZBA), among several within one month and not soon after Donald Trump was elected president. It did so as it and roughly 60 companies are being investigated by Congress for allegedly colluding as a ā€œwoke ESG cartelā€ to ā€œimpose radical environmental, social, and governance goals on American companies.ā€

Last month, Goldman Sachs was the first to withdraw from the alliance, followed by Wells Fargo, The Center SquareĀ reported. Citigroup, Bank of America, Morgan Stanley and JPMorganĀ next announced their departure.

According toĀ the “bank-led and UN-convened” alliance, global banks joined, pledging to align their lending, investment and capital markets activities with a net-zero greenhouse gas emissions target by 2050.

Major U.S. banks began leaving the alliance after President-elect Donald Trump vowed to increase domestic oil and natural gas production and pledged to go after ā€œwokeā€ companies.

They also announced their departure two years after 19 state attorneys general launched an investigation into them for alleged deceptive trade practices connected to ESG.

While the companies havenā€™t appeared to seem daunted by state investigations, Trump’s reelection appears to be a different matter.

ā€œBlackRock has hung in there as long as it could, but the pressure has become too great, and the reputational and legal risks too high, just before Trump takes office. It wonā€™t be the last financial organization to quit a net zero initiative,ā€ Hortense Bioy, Morningstar Analytics director of sustainable investing research,Ā told Bloomberg News.

Texas Comptroller Glenn Hegar has expressed skepticism about companies claiming to withdraw from ESG commitments, noting there is often doublespeak in announcements, The Center SquareĀ reported. This includesĀ statementsĀ made by Goldman Sachs, JPMorgan and Blackrock.

Blackrock claims its ā€œparticipation in NZAMi didnā€™t impact the way we managed client portfolios. Therefore, our departure doesnā€™t change the way we develop products and solutions for clients or how we manage their portfolios. ā€¦ Our commitment to helping our clients achieve their investment goals remains unwavering,ā€ Bloomberg reported.

Last month, the U.S. House Judiciary Committee announced it was investigating more than 60 US-based asset managers’ involvement in the alliance, including BlackRock, Inc., JP Morgan Asset Management, Rockefeller Asset Management, State Street Global Advisors, among others.

The committee also issued aĀ report, “Climate Control: Exposing the Decarbonization Collusion in Environmental, Social, and Governance (ESG) Investing,” saying it found ā€œdirect evidence of a ā€˜climate cartelā€™ consisting of left-wing activists and major financial institutions that collude to impose radical environmental, social, and governance goals on American companies.ā€

Under the Trump administration, the committee will continue to investigate if ā€œexisting civil and criminal penalties and current antitrust law enforcement efforts are sufficient to deter anticompetitive collusion to promote ESG-related goals in the investment industry.ā€ It also maintains that the companies ā€œmust answer for their involvement in prioritizing woke investments over their own fiduciary duties.ā€

The committee sent letters to dozens of entities in 12 states and the District of Columbia requesting them to provide information by Jan. 10. The majority are located in New York, Massachusetts and California.

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Elon Musk, DOGE officials reveal ā€˜astonishingā€™ government waste, fraud in viral interview

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From LifeSiteNews

By Doug Mainwaring

Elon Musk said that ā€˜the sheer amount of waste and fraudā€™ in federal agencies, is ā€˜astonishingā€™ and that DOGE is cutting ā€˜$4 billion a dayā€™ in misused taxpayer funds.

In a remarkable Fox News interview, Department of Government Efficiency (DOGE) founder Elon Musk and top officials of the DOGE team offered stunning, often infuriating, insights into how the federal government functions.

The interview, which has garnered well over 10 million online views on X in less than 24 hours, provided one extreme example after another of government mismanagement, excess, waste, and fraud while simultaneously promising a future where the D.C. Leviathan is tamed and restored to its proper, efficient role.

The new Deputy Director of the Office of Management and Budget (OMB), former U.S. House Rep.Ā Dan Bishop,Ā averred that the DOGE A-Team interview was the ā€œmost amazing and significant half-hour in TV history.ā€Ā 

Musk was joined by DOGE team members Steve Davis, Joe Gebbia, Aram Moghaddassi, Brad Smith, Anthony Armstrong, Tom Krause, and Tyler Hassen ā€“ all successful businessmen and entrepreneurs in their own rights ā€“ to describe the widespread systemic weaknesses and failures at the Internal Revenue Service (IRS), the National Institutes of Health (NIH), the Department of Health and Human Services (HHS), the Social Security Administration (SSA), and more.Ā Ā 

Fox host Bret Baier described the group as ā€œSilicon Valley colliding with government.ā€

ā€œThis is a revolution. And I think it might be the biggest revolution in government since the original revolution,ā€ said Musk during the discussion.Ā Ā 

ā€œBut at the end of the day, Americaā€™s going to be in much better shape,ā€ he promised.

ā€œAmerica will be solvent. The critical programs that people depend upon will work, and itā€™s going to be a fantastic future.ā€Ā 

Musk said that the most stunning thing heā€™s discovered during the early phases of DOGE is ā€œthe sheer amount of waste and fraud in government. It is astonishing. Itā€™s mind-blowing.ā€

Musk cited the example of a simple 10-question National Park online survey for which the government was charged nearly $1 billion and which in the end served no purpose.

ā€œI think we will accomplish most of the work required to reduce the deficit by a trillion dollars within [130 days],ā€ he predicted. ā€œOur goal is to reduce the waste and fraud by $4 billion a day, every day, seven days a week. And so far, we are succeeding.ā€

Billionaire Airbnb co-founder Joe Gebbia, is working to digitize the retirement process for government employees, which is currently stuck using 1950s technology, housed in a Pennsylvania cave.

ā€œItā€™s an injustice to civil servants who are subjected to these processes that are older than the age of half the people watching the show tonight,ā€ said Gebbia. ā€œWe really believe that the government can have an Apple store-like experience, beautifully designed, great user experience, modern systems.ā€Ā Ā 

ā€œThe retirement process is all by paper, literally, with people carrying paper and manila envelopes into this gigantic mine,ā€ added Musk, limiting the number of federal employees who can retire to no more than 8,000 per month.

Gebbia expects to have the antiquated system updated and overhauled in a matter of months.Ā Ā 

ā€œThe two improvements that weā€™re trying to make to Social Security are helping people that legitimately get benefits protect them from fraud that they experience every day on a routine basis and also make the experience better,ā€ said DOGE software engineer Aram Moghaddassi.

He offered an amazing statistic:Ā ā€œWhen you want to change your (direct deposit) bank account, you can call Social Security. We learned 40% of the phone calls that they get are from fraudstersā€ who are attempting to commandeer retired seniorsā€™ benefit payments.

ā€œWhat weā€™re doing will help their benefits,ā€ assured Musk. ā€œAs a result of the work of DOGE, legitimate recipients of social security will receive more money, not less money.ā€Ā 

ā€œThere are over 15 million people that are over the age of 120 that are marked as alive in the Social Security system,ā€ said Steve Davis, who has previously worked alongside Musk at SpaceX, the Boring Company, and X

He explained that despite this being discovered by hardworking personnel at the SSA back in 2008, nothing was done. As a result, 15-20 million social security numbers that were clearly fraudulent were just floating around, susceptible to being used for ā€œbad intentions.ā€

Health care entrepreneur Brad Smith, who has taken charge of auditing HHS and NIH, also cited stunning, troubling statistics displaying the extreme inefficiencies of the nationā€™s top federal health organizations.

Smith said that at NIH, ā€œToday they have 27 different centersā€ created by Congress over the years and there are ā€œ700 different IT systems,ā€ each using their own IT software.

ā€œThey have 27 different CIOs (Chief Information Officers),ā€ added Smith, ā€œso when you think about making great medical discoveries, you have to connect the data.ā€Ā Ā 

Those discoveries are likely severely hampered by NIHā€™s communications disconnect.

Anthony Armstrong, a Morgan Stanley banker now working for DOGE at the Office of Personnel Management (OPM) talked about ā€œduplicative functionsā€ and ā€œoverstaffingā€ at government agencies. He said that money is ā€œsloshing out the door.ā€

As an example, he cited the IRS, which has 1,400 employees whose only job is to provision laptops and cell phones to IRS workers.Ā Ā 

ā€œAs an ex-CFO of a big public tech company, really what weā€™re doing is, weā€™re applying public company standards to the federal government, and it is alarming how the financial operations and financial management is set up today,ā€ said Tom Krause, CEO of Cloud Software Group.Ā Ā 

He explained that there is virtually no accountability or verification protections when it comes to the Treasury Department disbursing funds to various government agencies.

A 94-year-old grandmother is no longer ā€œgoing to be robbed by forces like sheā€™s getting robbed today, and the solvency of the federal government will ensure that she continues to receive those social security checks,ā€ added Musk.

ā€œThe reason weā€™re doing this is because if we donā€™t do it, America is going to go insolvent and go bankrupt, and nobodyā€™s going to get anything,ā€ said Musk.

Tyler Hassen, a former oil executive working at the Interior Department for DOGE ā€‹ā€‹alleged that there was no departmental oversight at the Interior Department ā€œwhatsoeverā€ under the Biden administration.Ā Ā 

Steve Davis talked about the out-of-control issuance and use of federal credit cards.Ā 

ā€œThere are in the federal government around 4.6 million credit cards for around 2.3 to 2.4 million employees. This doesnā€™t make sense. So, one of the things all of the teams have worked on is weā€™ve worked for the agencies and said, ā€˜Do you need all of these credit cards? Are they being used? Can you tell us physically where they are?ā€™ā€ recounted Davis.

ā€œClearly there should not be more credit cards than there are people,ā€ interjected Musk.

Musk later described how the Small Business Administration (SBA) has given out $300 million in loans to people ā€œunder the age of 11.ā€ An additional $300 million in loans has been handed out to people ā€œover the age of 120.ā€

Musk said that these government loans are clearly ā€œfraudulent.ā€Ā Ā 

ā€œTerrible things are being done,ā€ he exclaimed. ā€œWeā€™re stopping it.ā€Ā 

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Americans rallying behind Trump’s tariffs

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The Trump administrationā€™s new tariffsĀ are working:

The European Union will delay tariffs on U.S. exports into the trading bloc in response to the imposition of tariffs on European aluminum and steal, a measure announced in February by the White House as a part of an overhaul of the U.S. trade policies.

Instead of taking effect March 12, these tariffs will not apply until ā€œmid-Aprilā€, according to a European official interviewed byĀ The Hill.

This is not the first time the EU has responded this way to U.S. tariff measures. It happenedĀ already last time Trump was in office. One of the reasons why Brussels is so accommodative is thatĀ the European Parliament emphasized negotiationsĀ already back in February. Furthermore,Ā asĀ ForbesĀ notes,

The U.S. economy is the largest in the world, and many countries rely on American consumers to buy their goods. By import tariffs, the U.S. can pressure trading partners into more favorable deals and protect domestic industries from unfair competition.

More on unfair competition in a moment. First, it is important to note that Trump did not start this trade skirmish. Please noteĀ whatĀ IndustryWeekĀ reportedĀ back in 2018:

Trump points to U.S. auto exports to Europe, saying they are taxed at a higher rate than European exports to the United States. Here, facts do offer Trump some support: U.S. autos face duties of 10% while European cars are subject to dugies of only 2.5% in the United States.

They also noted some nuances, e.g., that the United States applies a higher tariff on light trucks, presumably to defend the most profitable vehicles rolling out of U.S. based manufacturing plants. Nevertheless, the story that most media outlets do not tell is that Europe has a history of putting tariffs on U.S. exportsĀ to a greater extentĀ than tariffs are applied in the opposite direction.

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Facts notwithstanding, this trade war has caught media attention and is reaching ridiculous proportions.Ā According toĀ CNBC,

Auto stocks are digesting President Donald Trumpā€™s annoncement that he would place 25% tariffs on ā€œall cars that are not made in the United Sates,ā€ as well as certain automobile parts. ā€¦ Shares of the ā€œDetroit Threeā€ all fell.

They also explain thatĀ GM took a particularly hard beating, and thatĀ Ferrari is going to use the tariffs as a reason to raise pricesĀ by ten percent. This sounds dramatic, but keep in mind that stocks fly up and down with impressive amplitude; what was lost yesterday can come back with a bonus tomorrow. As for Ferrari, a ten-percent price hike is basically meaningless since these cars are often sold in highly customized, individual negotiations before they are even produced.

Despite the media hype, these tariffs will not last the year. One reason is the retaliatory nature in President Trumpā€™s tariffs, whichā€”againā€”has already caught the attention of the Europeans and brought them to the negotiation table. We can debate whether or not his tactics are the best in order to create more fair trade terms between the United States and our trading partners, but there is no question that Trumpā€™s methods have caught the attention of the powers that be (which include Mexico and Canada).

There is another reason why I do not see this tariffs tit-for-tat continuing for much longer. The European economy is in bad shape, especially compared to the U.S. economy. With European corporations already signaling increased direct investment in the U.S. economy, Europe is holding the short end of this stick.

But the bad news for the Europeans does not stop there. They are at an intrinsic disadvantage going into a tariffs-based trade war. The EU has a ā€œtariffā€ of sorts that we do not have, namely the value-added tax, VAT. Shiphub.co has a succinct summaryĀ of how the VAT affects trade:

When importing (into the European Union), VAT should be taken into account. ā€¦ VAT is calculated based on the customs value (the goodā€™s value and transport costs ā€¦ ) plus the due duty amount.

The term ā€œdutyā€ here, of course, refers to trade tariffs. This means that when tariffs go up, the VAT surcharge goes up as well. Aside from creating a tax-on-tax problem, this also means that the inflationary effect from U.S. imports is significantly stronger than it is on EU imports to the United Statesā€”even when tariffs are equal.

If the U.S. government wanted to, they could include the tax-on-tax effect of the VAT when assessing the effective EU tariffs on imports from the United States. This would quickly expand the tit-for-tat tariff war, with Europe at an escalating disadvantage.

For these reasons, I do not see how this ā€œtrade warā€ will continue beyond the summer, but even that is a pessimistic outlook.

Before I close this tariff topic and declare it a weekend, let me also mention that the use of tariffs in trade war is neither a new nor an unusual tactic. Check out this little brochure from theĀ Directorate-General for TradeĀ under the European Commissionā€™:

Trade defence instruments, such as anti-dumping or anti-subsidy duties, are ways of protecting European production against international trade distortions.

What they refer to as ā€œdefence instrumentsā€ are primarily tariffs on imports. In a separate report the Directorate lists no fewer thanĀ 63 trade-war casesĀ where the EU imposes tariffs to punish a country for unfair trade tactics.

Trade what, and what countries, you wonder? Sweet corn from Thailand, fused alumina from China, biodiesel from Argentina and Indonesia, malleable tube fittings from China and Thailand, epoxy resins from China, South Korea, Taiwan, and Thailandā€¦ and lots and lots of tableware from China.

Like most people, I would prefer a world without taxes and tariffs, and the closer we can get to zero on either of those, the better. But until we get there, we should take a deep breath in the face of the media hype and trust our president on this one.

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