Kevin Stocklin Schumer Versus DeSantis

Democrats back corporations as GOP punishes them

The ideological clash about how much control government should have over private companies was encapsulated recently in two Wall Street Journal op-ed pieces that many readers might find surprisingly contradictory.

The first, written by Senate Majority Leader Chuck Schumer (D-N.Y.), rails against government intervention in corporate affairs; the second, by Republican Florida Gov. Ron DeSantis, justifies his anti-corporate actions.

These two pieces capture the tug of war between political parties over the rising influence of the environmental, social, and governance (ESG) ideology among the world’s largest corporations.

Under the heading “Republicans Ought to Be All for ESG,” Schumer states his opposition to congressional action to block a new Labor Department rule that allows pension fund managers to invest retirees’ money according to ESG criteria. When it comes to ESG investing, he argues, a laissez-faire approach is best.

“Republicans talk about their love of the free market, small government, and letting the private sector do its work,” Schumer writes. “But their obsession with eliminating ESG would do the opposite, forcing their own views down the throats of every company and investor ... I say let the market work.”

ESG is an ideology that includes climate change and racial equity. Public companies today are rated according to ESG compliance, and many asset managers have signed pledges with groups such as the Net Zero Asset Managers initiative to advance ESG goals “across all assets under management.”

Many Democrats, like Schumer, say they oppose regulations that infringe on corporate freedom. Meanwhile, the GOP, historically the pro-business party, is fighting ESG companies. States such as Florida, Texas, and West

Virginia banned state pension funds from ESG investing and boycotted asset managers and banks that they say discriminate against fossil fuels.

In his op-ed “Why I Stood Up to Disney,” DeSantis writes: “When corporations try to use their economic power to advance a woke agenda, they become political, and not merely economic, actors. In such an environment, reflexively deferring to big business effectively surrenders the political battlefield to the militant left.”

DeSantis made headlines recently when Disney CEO Bob Chapek vowed to fight a new Florida law that bans the teaching of sexual topics in kindergarten through third grade. In response, Florida revoked the privileged self-governing status of the Walt Disney World theme parks.

“Democrats often rail about corporations’ nefarious influence over politics and oppose favorable exceptions for big companies. Yet they supported keeping Disney’s special-governing status,” DeSantis writes. “This confirms how much the modern left has jettisoned principle in favor of power. As long as large corporations help advance the left’s woke agenda, the left is willing to do their bidding.”

Private pensions are regulated by a 1974 law called the Employee Retirement Income Security Act (ERISA), which was enacted in response to misuse of retirees’ money. ERISA states that fund managers must act purely in the interest of maximizing monetary returns. The Biden administration, however, provided new rules that ESG criteria were also acceptable for the approximately $12 trillion in retirement savings.

While it may seem that Democrats are the new free-market champions, they are rapidly expanding state intervention into the private sector.

According to the American Action Forum, which tracks the scale of government regulation, the Biden administration has implemented 532 new executive orders and regulations, at an estimated cost of $359 billion. By comparison, the cost of new regulations during the Trump administration was $6.8 billion.

The Biden administration also created hundreds of billions of dollars in subsidies for renewable energy and electric vehicles through the Infrastructure Act and the Inflation Reduction Act. A new regulation from the Securities and Exchange Commission requires listed companies to report their CO2 emissions and plans to reduce them.

The Biden administration is also working to ban gas stoves, and laws in Democrat-run states including California, Washington, and Massachusetts would ban the sale of gasoline-powered cars and gas heating in new homes and buildings.