GOP: Climate Is A Dirty Word

The other day, I was doing the “housewife” thing–which included cleaning bathroom toilets–and because I am a nerd of the first order, the sight of soapy water swirling down the drain made me think of the GOP.

When “Republican” was the name of a political party that had a policy agenda, a major part of that agenda was protection of the free market and a pretty sustained pushback over government ‘s business regulations. (Barry Goldwater famously proclaimed that government didn’t belong in either your boardroom or your bedroom…but of course, Barry is now considered a RINO.)

Most GOP lawmakers acknowledged the need for government regulations that were necessary to provide an economic “level playing field”–the sorts of regulations meant to prevent unfair business practices, corruption and collusion, and/or harm to the public. The policy arguments focused on the extent and necessity of those rules– matters about which people could have good-faith disagreements.

Those were the good old days!

Axios recently reported on the GOP’s eagerness to tell private businesses what they can and cannot do, and their preferred rules have absolutely nothing to do with bad behavior by their targets. Quite the contrary.

Republicans in Congress have teed up the first veto of the Biden presidency. Curiously, the vetoed bill has nothing to do with children’s books, unisex bathrooms, or even fiscal policy. Instead, it focuses on stock-market asset allocation.

Why it matters: The environmentally conscious global consensus of institutional investors is highly unlikely to be derailed by U.S. political point-scoring. But no good can come from the way in which investment officers increasingly need to navigate a political gantlet.

Driving the news: Both the House and the Senate this week passed legislation overturning a Labor Department rule designed to ensure that fund managers remain capable of considering environmental, social, and governance (ESG) factors when making investments.

The aim of the bill was not to change the law — a veto was always certain — but rather to create a 2024 campaign issue. Politicians like Sen. John Barrasso, a Republican from Wyoming, characterize the Department of Labor rule as creating “regulations to invest retirement money in far-left liberal causes.” That’s false — the rule mandates nothing at all — but Republicans are hoping it might prove an effective attack vector all the same.

The article quotes an NYU law professor–an expert on environmental law– opining that the  bill “has to be the ne plus ultra of hysterical overreaction to any policy with the word climate in it.”

As the Axios report notes, the GOP is politicizing a “decidedly anodyne” Department of Labor rule that is, in fact, a “laissez-faire attempt to reiterate that investors are free to follow any investment thesis they like.” In other words, a rule aiming to strengthen what used to be Republican orthodoxy.

Climate change is probably the biggest risk facing global markets over the long term. Investors therefore have a clear financial incentive to invest in the companies that are best placed to mitigate or adapt to climate risk, as a way of maximizing their own long-term returns.

There is always a fiduciary reason for ESG investments, but a Trump-era rule tried to discourage such strategies anyway. Even the U.S. Chamber of Commerce and the American Petroleum Institute were unenthusiastic about the Trump administration’s stance.

The Department of Labor rule the current bill tries to overturn was written to make it clear that investors don’t need to fear the potential ire of regulatory agencies when they adopt ESG investment frameworks.

It bears emphasizing that the rule the GOP wants to overturn amounts to a promise that, if your business wants to take climate risk into account, government won’t punish you for doing so.

But today’s Republicans insist that concern for climate is a “far left” marker. Today’s GOP has totally abandoned its previous respect for private enterprise and limitations on  legislative authority. The party used to be animated by the libertarian principle that government should be limited to protecting citizens against harm. Americans can and do differ about the nature of the harms that justify government intervention, but things like caring about the environment, reading the “wrong” books, or loving the “wrong” people, were not (at least officially) among them.

Some of this anti-climate fervor reflects the worries of fossil fuel companies, of course, and those companies are big donors to the GOP lawmakers driving this exercise.  Still, we shouldn’t dismiss the political motives behind this propaganda. As the Axios article notes, Republicans are trying to reach swing voters by labeling anything climate-conscious as being part of a far-left agenda.

If recognition of climate change is “leftist,” my belief that words have fixed meanings is  swirling like the water around the drain in my toilet…

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About Those Captains of Industry…

I’ve been pretty hard on big corporations in several blog posts, and I stand by my criticisms of the behaviors I’ve identified.

That said, the Washington Post recently published an interview with Tim Cook, the CEO of Apple, and it reminded me of the danger of political rhetoric–including my own– that oversimplifies and labels.

On the right, the villains are Muslims, immigrants–actually, pretty much anyone who isn’t a white Christian. On the left, it’s big corporations and rich people.

It’s not that simple.

There are certainly decisions that Apple and other corporate behemoths have made that I personally question, but in many ways, Apple has been a pretty exemplary corporate citizen. As the introduction to the interview notes, Cook has been credited with making the company more systematic, transparent, and team-oriented.

He has engaged on social issues more than most CEOs, writing op-eds on legislation that limits gay rights and making the extraordinary decision earlier this year to oppose the FBI’s request to unlock the San Bernardino killer’s phone.

Cook–like many other thoughtful businesspeople–understands that a focus on short-term profits can undermine the elements of corporate culture than are essential to long-term prosperity. (There’s that “self-interest properly understood” theme again…)

I also think that the traditional CEO believes his or her job is the profit and loss, is the revenue statement, the income and expense, the balance sheet. Those are important, but I don’t think they’re all that’s important. There’s an incredible responsibility to the employees of the company, to the communities and the countries that the company operates in, to people who assemble its products, to developers, to the whole ecosystem of the company. And so I have a maybe nontraditional view there. I get criticized for it some, I recognize. If you care about long-term shareholder return, all of these other things are really critical.

The lesson here isn’t about Apple, or Cook.

Those of us who deplore “us versus them” politics, who remind our fellow citizens that the American constitution requires evaluating our neighbors as individuals, rather than members of groups, need to practice what we preach.

Every corporation is not Koch Industries or Walmart. Every billionaire is not Donald Trump.

When Freedom Indiana was fighting efforts to marginalize the gay community, the most persuasive voices against bias were those of Eli Lilly, Emmis, Cummins and other large companies. When Costco demonstrates that better pay and employee benefits translate into higher profits, employers who would never listen to social “do gooders” take note. When billionaires like Nick Hanauer insist that the real job creators are consumers, and that only by paying workers more can we grow the economy, people listen who would never listen to me, or to other “pointy head” academics.

We need to work toward a culture that recognizes the differences between the responsible and the irresponsible; a culture that rewards good corporate citizenship, and shames the profiteers.

Prejudice is the tendency to paint with a too-broad brush; it is failure to draw appropriate distinctions.

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Now, Something Completely Different

My cousin, an eminent cardiologist, sent me a brief essay he recently wrote about GMs–genetically modified foods. It exemplifies the sort of appeal to science and evidence that should guide decision-making. Or so my logic tells me. Nevertheless…Well, let’s start with his essay.

   “On May 25, 2012, The New York Times ran an article titled “Battle Brewing Over Labeling of Genetically-Modified Foods.” The article pointed out that for more than a decade, almost all processed foods in the United States — cereals, snack foods, salad dressings — have contained ingredients from plants whose DNA was manipulated in a laboratory. Moreover, almost all the corn and soybeans grown in the United States now contain DNA derived from bacteria. The foreign gene makes the soybeans resistant to an herbicide used in weed control and causes the corn to produce its own insecticide, thus increasing yields and reducing the need for artificially added chemicals.  In addition, almost all the food derived from plants you eat has been produced by selective breeding, artificially selected for various favorable traits, including the enrichment of the content of certain proteins.

   Regulators and scientists say genetic manipulations pose no danger. But as Americans ask questions about what they are eating, popular suspicions about the health and environmental effects of biotechnology are fueling a movement to require that food from genetically modified crops be labeled, if not eliminated.

    Labeling bills had been proposed in more than a dozen states over the previous year, and an appeal to the Food and Drug Administration to mandate labels nationally drew more than a million signatures. The most closely watched labeling effort is a proposed ballot initiative in California prompting a probable subsequent vote that could influence not just food packaging but the future of American agriculture.

     Tens of millions of dollars are expected to be spent on the election showdown. It pits some consumer groups and the organic food industry, both of which support mandatory labeling, against more conventional farmers, agricultural biotechnology companies like Monsanto and many of the nation’s best-known food brands like Kellogg’s and Kraft.

    The root of this latest push is most likely fear. Anything that is unknown or perceived to be “foreign” is feared by a general public that is ill educated about the topic, and this likely leads to a form of hysteria. Perhaps it conjures up an Orwellian image of “big brother” manipulating our genes to the point of modifying our own makeup and mischievously invading our stem cells and future progeny.

    And of course there is the ubiquitous presence of moneyed interests. If the California initiative passes, “we will be on our way to getting genetically-tainted foods out of our nation’s food supply for good,” according to Ronnie Cummins, director of the Organic Consumers Association—with financial gain at stake—who stated in a letter seeking donations for the California ballot initiative. “If a company like Kellogg’s has to print a label stating that their famous Corn Flakes have been genetically engineered, it will be the kiss of death for their iconic brand in California — the eighth-largest economy in the world — and everywhere else.”

     Opposing such interests are such organizations as the Grocery Manufacturers Association and the National Corn Growers Association, which stand to lose by required labeling, believing that this would seriously undermine their sales.

     What is the science behind such hysteria? A recent comprehensive review* concluded that foods derived from genetically modified crops have been consumed by hundreds of millions of people across the world for more than 15 years and there have been no reported ill effects (or legal cases related to human health), despite many of the consumers coming from that most litigious of countries, the USA. This report pointed out the many advantages of such modification that included, among others, increasing crop yields and more nutritious contents. There are also a number of uses for plants outside of the food industry, for example in the timber, paper and chemical sectors and increasingly for biofuels. Of significance to the medical field is the use of genetically modified plants for production of recombinant pharmaceuticals. Molecular farming to produce such plant-derived pharmaceuticals is currently being studied by academic and industrial groups across the world. The first full-size native human product, human serum albumin, was demonstrated in 1990, and since then antibodies, blood products, hormones and vaccines have all been expressed in modified plants. Protein pharmaceuticals can be harvested and purified from these plants, or alternatively, plant tissue in a processed form expressing a pharmaceutical could potentially be consumed as an ‘edible vaccine’.

    In conclusion, I believe that anxiety-producing labels are counterproductive, but if such ill-advised legislation results in their appearance, don’t panic—these foods are harmless! In most cases they are far superior to “organic” products that I have reviewed in a previous publication.”

Why am I not entirely convinced?

First, on general policy grounds, I favor disclosure–whether it be disclosure of political contributions, or state budget calculations, or the ingredients in my food.  I may make poor decisions based on those disclosures, but that is still preferable to government exercising “father knows best” paternalism.  Accurate food labeling empowers me; it provides me with the information I need to make informed decisions about what I eat–calorie counts, sugar content, or genetic modifications.

Second, while I am confident that my cousin is correct about the results of testing that has been done– science isn’t static. New genetic modifications appear with some frequency, and newer ones have not been tested over a period of years. Manipulation of genes is different from selective breeding, although both result in genetic modification. The risk may be slight, but individuals should have the information necessary to make risk calculations for themselves–including the sort of information about their safety provided by current science.

Third, call me overly cautious, but some problems take time to emerge. We are just now recognizing the deleterious effects of some pesticides and antibiotics used in large-scale farming. While those techniques to increase crop and animal yields are not genetic modifications, they too were long thought to be free of side effects. One of the reasons we trust science is that it is falsifiable–always open to revision on the basis of new evidence. The jury is always out.

None of this is intended to suggest we avoid GM food, even if we could. I am simply arguing that more information is better than less.  Decisions about disclosure of ingredients in our foods should not rest with manufacturers worried about market share, just as decisions about disclosure of political contributions should not be made by those profiting from them.

Just sayin’



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