Voodoo economics and made-up property rights are the next frontier of ESG ByJustin Bis
The seemingly never-ending contest for the worst idea in Washington is heating up.
Voodoo economics and made-up property rights are the next frontier of ESG
February 9, 2024 6:00 am
The seemingly never-ending contest for the worst idea in Washington is heating up. A leading contender for this year’s dubious distinction, the Securities and Exchange Commission’s “Natural Asset Company” proposal, would have established a new type of corporation with the express purpose of prohibiting economic activity from occurring on federal and state lands that the government would place under the company’s control.
Like many horrendous ideas, NACs were first conceived in Davos at the World Economic Forum. This elitist proposal would have monetized the air we breathe and water we drink, radically redefining our relationship with life’s basic essentials. After learning of this proposal, which was sent to an agency known for its lack of transparency, the public backlash was so intense that it was suddenly withdrawn.
Undeterred by NAC’s embarrassing defeat, the global elites and their special interest allies that propagated this rule vowed to continue this fight. But radical proposals such as the NAC rule are unpopular with the public once the facts are known. And that’s because, after scrutiny, they are found to be overwhelmingly expensive with little actual benefit to the public to show for it.
Take, for example, SEC Chairman Gary Gensler’s signature policy, the pending climate disclosure rule, which is intended to reallocate capital toward favored industries. This massive rule would require a large swath of companies — even many that have no role in producing energy, manufacturing, or traditional carbon-intensive industries — to file disclosures on the environmental impact of their products. Shaming companies into adopting the environmental, social, and corporate governance movement’s ideals may be a side effect, but the burdensome costs are clearly the goal.
Distorting capital markets to prop up a preferred energy source or favor one industry over another isn’t promoting “fair, orderly, or efficient markets.” The SEC is supposed to be a financial cop on the beat, stopping the Bernie Madoffs from ripping them off. Instead, we have a chairman acting as an economic tsar directing the nation’s capital markets toward his special interest allies’ favored ends.
The withdrawn NAC rule and the legally dubious climate disclosure rule show the dilemma that the ESG cabal finds itself in. Globalists are coming to grips with the fact that their unaffordable and unpopular land grabs cannot be justified through standard economic analysis or a traditional understanding of property rights. But that doesn’t mean they won’t stop trying.
After it became clear the NAC designation would fail, elites cooked up a new plan. It would be genius if it weren’t so pernicious.
First, through the creation of what is referred to as “ecological services,” these special interest environmental zealots have developed a new category of property rights unlike any before it.
Second, they turned to the United Nations, a regular source of rotten ideas, to adopt its new accounting framework called the “System of Environmental Economic Accounting.” SEEA accounting is supposed to replace the Generally Accepted Accounting Principles. For example, a new government proposal might cost a trillion dollars and hundreds of thousands of jobs when analyzed by GAAP accounting, but with the new “Ecosystem Accounting” calculating “ecological services,” the proposal could save billions and even create thousands of new green jobs! In this Orwellian world, fueled by fuzzy numbers and misleading statistics, accounting is no longer a recording and analysis of facts, it is an appendage of the state ready to justify anything.
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Perhaps this is the reason why Russia and China quickly signed on to the SEEA framework. Now, it’s coming to the United States quietly through administrative action from the White House. The White House is organizing a whole of government approach to implement this alternative accounting, radically changing the economic trajectory of the United States. Over two dozen regulatory agencies are taking part in a White House working group, cooking up administrative changes that, in many instances, require no public consultation or approval from Congress.
Despite the recent blitz of bad ideas, the public’s rejection of policies such as the NAC rule shows that our system is still vibrant and that the republic is strong. My organization, the Financial Fairness Alliance, is proud to help educate the public on these types of proposals. We believe that a well-informed public creates better policy and protects investors of all stripes, not just those with an annual plane ticket to Switzerland.
Justin Bis is the director of the Financial Fairness Alliance. He has held senior government roles, including at the White House and the U.S. Department of Energy, where he assisted with recruiting top-level governmental leaders responsible for regulating the U.S. financial and energy markets.