Global Trend

To an unprecedented extent, corporate decision makers of the 2020s have forgotten that they have a fiduciary responsibility to maximize shareholder wealth. As a result, the wave of deception and fantasy which was inherent in our COVID 19 response and the broader systemic efforts to distort and hide the truth, have infected corporate America.

Paradoxically, the resulting economic underperformance means a diminished quality of life for everyone, including most of the supposed beneficiaries of this “woke” thinking.

To appreciate the implications and the possible solutions, consider the role that “wokeness” has played in the underperformance of a wide range of public and private institutions.

The freshest example is Silicon Valley Bank Corporation.

As social commentator Dennis Prager recently observed, “the primary concern of the people who ran SVB was not banking. Nor was it making money for the bank’s shareholders or safeguarding the funds of its depositors.

Their primary concern was social activism.” This meant giving top priority to the LGBTQ+ agenda as well as Diversity, Equity, & Inclusion programs, Environmental, Social, and Governance policies, and climate change mitigation efforts.

In fact, for a critical nine-month period, SVB didn’t even have a Chief Risk Officer (or CRO) in the United States. It did have a CRO for Europe, Africa, and the Middle East, but Jay Ersapah, the woman entrusted with that role, was clearly more interested in leftwing activism than in risk assessment.

The Daily Mail reported that Ersapah - who identifies herself as a “queer person of color” - “organized a host of LGBTQ initiatives including a month-long Pride campaign and implemented ‘safe space’ catch-ups for staff. As her biography states, “she … had authored numerous articles to promote LGBTQ awareness.” Topics included ‘Lesbian Visibility Day’ and ‘Trans Awareness Week.’

Such woke priorities typically characterize today’s collapsing financial businesses, including the recently failed Signature and Silvergate banks and the crypto-exchange FTX. Worse yet, this kind of woke activism seems to dominate policymaking at most major financial firms.

Rather than try to rein-in these practices, Biden used his first veto to derail bipartisan legislation designed to prevent the SEC from encouraging firms to use ESG criteria in making decisions that undermine the interests of investors.

There are several possible explanations for this seemingly deranged thinking, but there is one common thread which serves to explain why left-wing activism has emerged not just in finance, but in almost every other profession over the past 50 years or so.

Beginning in the second half of the 20th century, a growing share of western workers in nearly every white-collar profession ceased to have a “higher purpose” in their lives which helped earlier generations make their work inherently meaningful. Consequently, they sought to use their professions to change the world in ways that felt and sounded “good.”

Two related cultural factors contributed to these psychological shifts.

One was the loss of meaning within our increasingly secular society. Whereas in the past, westerners derived meaning in life from their religious community, their house of worship, and Bible study, such religious supports largely disappeared from our secular society.

And secular materialism is rapidly leading to the collapse of the other great source of meaning in people’s lives (marriage and family), as we witness the lowest number of marriages and the fewest children in American history. Today, one has had to look elsewhere for meaning. And where do people look?

To career and to political activism, and frequently, the merger of the two. Whereas in the past, one’s work was primarily regarded as a means to an end - namely, a way to provide for one’s family - today, work is an end in itself.

The other factor driving “go woke, go broke” corporate overreach is the ascent of “social activism,” an ideology that literally regards every aspect of life as political.

After indoctrination in primary, secondary and tertiary education, it’s the obvious answer for anyone still searching for meaning. For those who have adopted this ideology, there are no non-political spheres. Whether you are a kindergarten teacher, a sportswriter, or an oboist with the Philadelphia Orchestra, you are to bring political activism into your work.

That’s why the people running Black Rock, Silicon Valley Bank, Signature Bank, Silvergate Bank and FTX appear more interested in LGBTQ and climate change activism than in making money for their investors or protecting the money of their customers. For most of them, so-called “social justice” is far more meaningful than simply creating economic value.

So, given this trend toward apparent economic suicide, we are tempted to ask Hillary Clinton’s famous question, “What difference, at this point, does it make?”

The answer is, “Quite a lot!” Unlike the Benghazi attack, the economic attack by woke activists is still on-going and the consequences are becoming clearly visible, day-by-day. What does this mean?

- Banks are collapsing.

- Prices are soaring.

- Airlines and railroads are being disrupted at historic rates.

- Violent crime is exploding.

- Property crimes are at unimaginable levels.

- Police are demonized, while BLM and Antifa are financially endowed by their victims.

- Violent rioters are being paid damages after their arrests.

- The U.S. armed forces can’t find enough qualified people to fill their ranks.

- Legacy media organizations are incurring losses and conducting lay-offs.

- Urban school districts typically have few, if any, students performing at grade level.

- Depression and mental illness are at record levels, especially among Zoomers.

- Businesses and individuals are re-locating from blue to red states for lower costs, greater safety and increased freedom.

- Homelessness is at record highs in blue cities.

- Millions of illegal immigrants are overrunning our borders each year.

- And thousands are routinely dying from fentanyl overdoses.

But more importantly, a growing share of voters and investors is realizing that they are injured when corporations and government agencies fail to deliver for customers, investors, employees, and communities. And to quote from the 1970s movie, Network, they are “mad as hell, and won’t take it anymore!”

The truth is that many, if not most people find “woke activism” counter-productive, if not repugnant. They know that recognizing people because of superficial status rather than actual contribution is counterproductive.

Contrary to the wishes of post-modernists and eastern mystics, “reality is reality!” Despite human rationalizations and desires, immutable laws of nature still govern the economy and technology. And while each person may have a unique set of “values and priorities,” every one of us must deal with the same absolute realities during our finite lifespans.

Yet every few decades, a large minority within society seems destined to reject empirical realities and they embrace policies and practices that simply “feel right to them.” And when this happens, many in the broader economy become “collateral damage.”

“Go woke, go broke!” has become the recurring business headline of the decade. That’s because companies, investors, and governments have abandoned proven economic principles in favor of “feel good” ideology.

Over the past decade, those who aren’t explicitly woke have been cowered into submission by cancel culture and similar mechanisms. But, as in the early 1970s, everything hinges on the forthcoming struggle between “left-wing extremists” and the so-called “silent majority.”

Given this trend, we offer the following forecasts for your consideration.

Radical environmentalism is sentencing the world’s most vulnerable to a life of energy poverty. Any lifestyle that westerners would call “acceptable” requires abundant access to affordable and reliable electricity. Scientists know that this is only possible in the mid-21st century, using fossil or nuclear power.

Yet today’s eco-colonialists insist on denying these resources to the poorest people on the planet while rapidly dismantling the resources used by advanced economies. Fortunately, as each year passes with zero confirmation of their dire forecasts, the rationale behind these “crimes against humanity” becomes weaker.

America’s unprecedented success is built on merit and hard work, not politicized victimhood. However, we see all around us the consequences of advancing people simply because of race or sexual orientation; it’s about as far as you can get from “judging people on the content of their character.”

Where possible, this new order will involve legislative and judicial prohibition of today’s social justice agenda. Elsewhere, companies and organizations which stubbornly embrace self-defeating priorities will find themselves unable to compete.

A database at the Claremont Institute has been tracking contributions and pledges made to the BLM movement and related causes, which they define as organizations and initiatives that advance one or more aspects of BLM’s agenda. In the wake of the BLM riots of 2020, this database documents that more than 400 companies have made pledges and contributions totaling $83 billion.

On the surface, this may not sound that egregious, but specific examples reveal a more serious problem. For example, even as it made huge payoffs to BLM, cereal-maker Kellogg, cut employee benefits and coerced its workers for concessions. Similarly, in the wake of the 2020 BLM riots, large banks like JPMorgan, Bank of America and Silicon Valley Bank collectively pledged over $100 billion for

- subsidized and sub-prime race-based lending,

- race-based investment targeting,

- supply chain diversity initiatives, and

- nonprofits advancing racial justice.

These race-based decisions are unlikely to benefit employees, investors or even the putative beneficiaries in the long run. Yet they sow increased race-based resentment in the short-term.

For instance, Ford Motor Co.’s electric vehicle business lost $3 billion before taxes in the years 2021 and 2022 and is on track lose at a similar pace this year as the company invests heavily in the new technology.

As we’re faced with even crazier mandates, such as banning gas stoves, it’s only a matter of time before investors, consumers, and voters use their leverage to reject this “insanity.”

Consider Disney. A recent Rasmussen poll showed that just 28% of adult Americans felt that focusing on “inclusion” and “diversity” enhances children’s entertainment. Conversely, 45% of respondents felt that it would have a negative impact, while only 18% believed that it would not have any impact.

More importantly, 47% of Americans, viewed Disney unfavorably. Furthermore, in the wake of news items about Disney’s opposition to the Florida parental rights law and the corporation’s not-so-secret LGBTQ agenda, an Issues & Insights/TIPP Poll found that a majority of independent voters said they “no longer trust” Disney’s programming for their children.

Yet, Disney has ignored these concerns and insists on producing woke content despite a slew of movies with dismal box office numbers and several streaming series that fans aren’t watching. Disney also received disappointing news from a recent report by Family Destinations Guide.

That study analyzed searches for tourist attractions in each state, encompassing various destinations such as national parks, beaches, Elvis’ Graceland, the Grand Canyon, and Universal Studios in Florida. Notably, Disney World, the company’s flagship theme park in Florida, was entirely absent from the searches, while Disney Land in California only managed to make it to the top ten in its home state.

Not surprisingly, Disney’s earnings are way down, and it is desperately seeking to cut costs via lay-offs and other means. And,

Woke California is losing industry as Texas, Arizona, and several red states are developing their tech and manufacturing capacities at a rapid rate. Like Intel’s new semiconductor plant, many of the new battery and EV plants are being built in the south and the Midwest.

According to projections from CompTIA Cyberstates, most of the Top 10 states for tech growth by 2030 will be red ones, including Utah, Nevada, Florida and Texas. By 2019, Texas had already passed California in terms of creating new tech jobs.

As Elon Musk remarked recently, “California used to be the land of opportunity, but it’s turned into ‘the land of taxes, overregulation… and this is not a good situation.” Perhaps most damaging will be California’s woke efforts to implement a wealth tax, which would quickly drive away the entrepreneurs and venture capitalists who are keeping it afloat.