Targeting “Woke Capital” – The New York Times
States take action against ‘woke CEOs’
Five major Wall Street companies woke up with a headache yesterday, and the disease appears to be spreading rapidly. Riley Moore, the outspoken Treasurer of West Virginia, announced that Goldman Sachs, JPMorgan, BlackRock, Morgan Stanley and Wells Fargo had been banned from doing business with the state because they had stopped supporting the coal industry, reports David Gelles of The Times.
Banks have sharply cut funding for new coal projects, while BlackRock has been reducing its actively managed stakes in coal companies since 2020. Coal, the most polluting fossil fuel, has become less profitable in recent years.
Some of the companies do business with West Virginia in various ways. JPMorgan, for example, handles some banking services for the public University of West Virginia. But the dollar figures are relatively small, and the law does not affect the assets of the state pension fund.
Development is one more step towards a politicized world of red marks and blue marks. In these hyperpartisan times, companies are increasingly caught between conservatives and progressives, and some brands are pigeonholed as Republicans or Democrats. The timing of the announcement was striking, just hours after Senator Joe Manchin of West Virginia, who had been the leading Democratic opponent of the climate legislation, relented and agreed to sign.
Meanwhile, in Florida, Governor Ron DeSantis has unloaded the supposedly “woke” ideology of some financial services companies., criticizing ESG investing and announcing proposed legislation that “would prohibit major banks, credit card companies and money transfer companies from discriminating against customers based on their religious, political or social beliefs.” At a press conference this week, he also said he wanted to ban managers of state pension funds from considering environmental factors when making investment decisions. Instead, he said, they should focus solely on “maximizing return on investment.”
Companies are now “marginalising” people because of political disagreements, said DeSantis. “That’s not how you can effectively manage an economy.” He singled out PayPal, which shut down accounts associated with far-right groups that participated in the Jan. 6 Capitol riot, and GoFundMe, which blocked donations to a group supporting truckers who occupied Ottawa this year. .
HERE’S WHAT HAPPENS
Amazon shares are soaring as the company says consumer demand remains strong. Positive comments from CEO Andrew Jassy and other senior executives caused investors to ignore the fact that the online retail giant announced its slowest quarterly sales growth in two decades and cut nearly 100,000 employees . Apple’s quarterly results were also better than expected, as Big Tech’s earnings held up even to the slowing economy.
The Eurozone economy grew faster than expected, but so did inflation. Positive GDP growth for the region, a day after the United States announced that economic growth had collapsed for the second straight quarter, eased some concerns about growing stagflation. Yet inflation in the euro zone hit 8.9% in July compared to a year ago, a new record.
The Biden administration plans to offer updated booster shots in September. With reformulated plans from Pfizer and Moderna on the horizon, the FDA has decided that Americans under 50 should wait until they receive a second booster.
Learn more about oil and gas prices
A new book reignites a debate about how LA Times editors handled a 2017 expose. Paul Pringle, a veteran LA Times reporter, writes in his book “Bad City” that major editors tried to slow down the newspaper’s initial story, which detailed how the dean of the University of California Medical School of Sud used drugs with young people.
Trader Joe’s employees at a Massachusetts store form a union. It is the only one of the supermarket chain’s more than 500 stores to have a formal union, but similar moves are underway elsewhere, just as the union campaign has spread at Starbucks. Trader Joe’s will soon face at least one more union vote, at a Minneapolis store next month, and workers at a Colorado store filed an election petition this week.
The big profits of the big oil companies
Oil companies are reporting rising profits, even as consumers and world leaders grapple with the challenges caused by rising energy prices.
Buoyed by high oil and gas prices, the energy sector is expected to have boosted profits by more than 250% in the second quarter. Exxon Mobil and Chevron, the two largest US oil companies, reported record profits this morning, with Exxon’s earnings more than tripling from a year ago. Europe’s biggest oil companies, Shell and TotalEnergies, reported combined profit of $21 billion yesterday.
Fallout from Russia’s invasion of Ukraine resulted in significant financial benefits for energy companies and their investors. The pain of rising energy prices and shortages, however, has been felt particularly by consumers and businesses in Europe, which received about half of Russia’s oil exports before the invasion. In Asia and Africa, rising energy prices could push millions back into energy poverty, the International Energy Agency warned last month.
It also led to allegations of profiteering. President Biden said last month that oil companies were benefiting from their own underinvestment in refining capacity. In Britain, Boris Johnson, the outgoing Prime Minister, has imposed an exceptional tax on the big oil and gas companies. But a top candidate to replace him, Liz Truss, said she opposed the tax because it would send “the wrong signal to the world” and that Shell should be encouraged to invest in Britain.
The oil companies pointed the finger at the politicians. Ben van Beurden, chief executive of Shell, said yesterday that energy prices were high partly because of government policies that have discouraged investment in oil and natural gas in recent years.
Gasoline prices in the United States have fallen over the past month, and there are indications that further relief may be on the way. Citigroup said in a research note today that it expects growth in oil supply to outpace weaker demand. Nonetheless, geopolitical factors and weather conditions could alter the price trajectory, particularly if the United States experiences an active hurricane season that disrupts refining capacity. “Only a few of these materializing risks could create a perfect and continuing storm of high volatility,” Citigroup said.
“There is a principle at play. What can you buy if you have unlimited cash? Can you bend all the rules? Can you dismantle monuments?
– Stefan Lewis, former member of Rotterdam City Council, explaining the outrage over the city’s decision, which has since been reversed, to temporarily dismantle a bridge to welcome Jeff Bezos and his superyacht.
The Dark Secrets of Business Grant Agreements
Each year, state and local authorities negotiate approximately $95 billion in economic development agreements, competing to recruit businesses into their communities with lucrative grants in exchange for their business.
But some companies are becoming increasingly aggressive in forcing officials to sign nondisclosure agreements it could end up hurting the communities the companies were meant to help, according to a new report from the American Economic Liberties Project, a progressive antitrust advocacy group. NDAs sometimes prohibit officials from disclosing basic information about a company, such as its name and the type of business it is building, Pat Garofalo, author of the report, told DealBook.
These NDAs prevent members of the community, such as workers and local businesses, from sharing their comments on the agreement. until it is finished. A recent example is the $4 billion battery plant that Panasonic will build in Kansas, which will receive nearly $1 billion in subsidies. Prior to the deal, Panasonic was also negotiating with Oklahoma, and the states were in a bidding war over the electronics giant’s business. But lawmakers couldn’t talk about the company on the other side of the negotiating table in public — and sometimes didn’t even know its name. In April, Oklahoma officials complained that they had two hours to consider a complex package of incentives worth $700 million, or about 8% of the state budget. “How am I supposed to go back to my constituents and say, ‘I gave three-quarters of a billion dollars to a company I don’t even know the name of?’ Is it responsible?State Rep. Collin Walke said during a credits meeting.
Some states have introduced bills to ban these NDAs, which the report calls an “extremely common tactic” in development agreements. This year, such legislation was introduced in New York, Michigan, Illinois and Florida. The New York State Senate voted unanimously to approve a ban. Garofalo thinks New York lawmakers were galvanized by Amazon’s HQ2 bid that collapsed in 2019. But he notes that communities don’t have to wait for politicians to fix the problem. Engaged citizens have used open meeting and registration laws to solve subsidy mysteries, and sometimes a little transparency is all it takes, Garofalo said. “When the public has a say,” he told DealBook, “the deals are better, or the bad deals are canceled immediately.”
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