Vivek Ramaswamy

ESG (Environment, Sustainability, Governance) is a scam, says Vivek Ramaswamy. Of course it is. That is self-evident. But in Capitalist Punishment, he claims that ESG is the biggest swindle of all time. That takes some serious explaining.

The purpose of ESG is to give companies and institutions ratings on how they are doing in those three categories. Ramaswamy says ESG boils down to “corporate executives should direct and coordinate the interests of all society’s members.” He positions it as The World Economic Forum at Davos running the world for its billionaire members’ financial benefit.

Meanwhile, the US government is stepping up demands for those ratings to drive environmental policy (instead of passing laws to do so). This causes obvious conflicts, as company presidents have to mouth the platitudes of environmentalism and sustainability, while also searching for more fossil fuels to burn.

That is bad, of course, but then Wall St piled on to rake off unimaginable profits from it too. The big three investment fund companies (Blackrock, State Street and Vanguard) started renaming their funds ESG or Sustainable. They didn’t necessarily change the securities the funds owned, just the names of the funds. Garden-variety lies. Then they started bleating to the public about how environmentally conscious they were. More lies. They began claiming investor returns would be higher by doing good. Laughable lies.

Readers might think that simply changing the name would not have any effect on performance and therefore profit. But ESG turned out to be a license to double the management fees for those funds. Again, with no change in the funds themselves. (Like fake organic produce: change the label, hike the price.) Failing funds suddenly began raking in massive new deposits. And at their scale – the big three speak for stock and debt worth nearly half the GDP of the world – a fraction of a percentage point is worth billions every year.

Worse, people who bought some of those regular funds, suddenly found themselves in ESG funds and did not want to be. And worse still, others bought ESG funds thinking they would be part of the solution. Instead, their pension or 401(k) money went to policies abhorrent to them (with the bonus of de facto corporate management of life around the world). The result is the biggest windfall in history.

The value Ramaswamy adds to this cauldron of deceit is its legality, or lack thereof. Among the endless laws regulating Wall St., there are statutes that require Wall St. to have a single goal: maximizing customer returns (The sole-interest rule). This means no distractions from making the most money for their customers. But ESG does not make money for companies. It costs them foregone profits and so lowers payouts.

This forced focus shift is therefore strictly illegal. Yet it is mandated by the federal government. Everyone is contorting to fit into this new model, but it is literally impossible, as well as clearly illegal.

This makes Ramaswamy’s main point constitutional, an excellent place to base an attack. Financial managers have a fiduciary duty to investors. Financial managers have no business managing other businesses they patronize. Investors should rightly fear when financial managers claim to devise global social policies. Great point.

A second great constitutional point of his is that buyers cannot be forced to join in if they don’t like the investment for moral or religious reasons. And yet, this is exactly what is going on, bigger than ever before. Customer money is being used in a global campaign to restructure the world. That was never the deal.

ESG leads to self-contradictions. On one level, for example, it means convincing Agriculture to adopt sustainable practices in producing their palm oil. At the same time, Wall St. rails against nonsustainable sources of palm oil as companies clear whole rainforests to grow this one species of tree.

On another level, Wall St has to lie to some of the biggest companies in the world, that they love to see profits rise and they wouldn’t dream of telling them how to run their business. Yet later that same day, they might testify before Congress that their primary concern and highest priority is using their financial leverage and sheer size to get management in line with ESG, globally. Choose the lie you prefer.

More hypocrisy comes in the ”protection racket” (as Ramaswamy calls it) where the official ESG ratings for every company come into play. It reeks of the same corruption as in rating corporate debt. Subscribe or your rating might not come out so well. There are no fixed rules, so one ratings firm can rate a company completely differently from another. Regardless, both rake in big bucks annually to keep rating them. Ramaswamy cites Facebook, which is rated in the top four percent by one rating firm, and the bottom one percent by another. “Reliable” does not leap to mind for ESG ratings.

So this whole ESG approach is apparently just wrong, morally, legally, and constitutionally. Elected government should be the body implementing such policy, not Wall St.

I have three criticisms of Capitalist Punishment. First, Ramaswamy sees fit to be snide. He loves to insert unhelpful jabs at President Biden or Senator Bernie Sanders, for example. He describes the long term drop in fees and how it has added wealth to union pensions: “Bernie would be proud, if he understood it.” There’s plenty of place for that, but this is supposedly a serious exposé, fully end-noted and verifiable. Or is it?

My second objection is it transpires that Ramaswamy has recently started his own firm to compete directly with Blackrock, State Street, Vanguard and Invesco. That makes this seemingly legitimate legal argument into a long commercial for his better-value, really non-ESG funds. That’s a problem. He saves this disclosure for the end of the book. Had he been up front about it, it would have changed everything, maybe for the better as he could be an “expert.” Hiding it until the end, not so good. Can you trust anything from this Wall Streeter?

But three, that is nothing compared to what he did next. Just a month after I wrote this this review, Ramaswamy announced his candidacy for the Republican presidential nomination. It just taints the book beyond redemption. Now the attacks on Bernie Sanders et al look very different. I feel used for having agreed to review this screed - now clearly biased in aid of his presidential campaign.

The book ends with fireworks, as Ramaswamy takes on Larry Fink, head of Blackrock and one of the richest men in the world: “In my opinion, Fink masterminded the largest financial scam in modern history. His fraud is on a scale at least three orders of magnitude greater than that of Sam Bankman-Fried, impacting tens of millions of people in the United States alone. Yet rather than jail time, he’s been rewarded with a board seat on the World Economic Forum at Davos and eight-figure compensation packages, while US citizens are left holding the bag.”

Just another day on Wall St.

David Wineberg… (més)

Woke Inc., Vivek Ramaswamy, author and narrator
The author is an accomplished businessman and a scholar. He resigned from the company he started because of woke politics. When some of his remarks disagreed with the political culture of the left, he was attacked by his own employees and executives. No one was more shocked than he was. However, when he realized that no explanation would stop the firestorm of negative reactions, he decided to hand his business over to an opposite of him, someone he trusted who could lead the company in a different direction successfully. Vivek is of Indian descent, conservative and has brown skin. His replacement is white and liberal and American born. He did not give up however, he does not believe in giving in to this woke elite, rather he wrote this book to defeat them, perhaps at their own game.
The premise of his book is based on the Golden Rule, which the author refers to it as the Goldman Rule, since he learned it at Goldman Sachs. Instead of saying do unto others as they would do unto you, he defines it as “the one with the gold rules.” Essentially, the book shows how money is power and power rules. He shows how the woke are using their influence and power to force corporations, politicians, and individuals to follow their lead. Those who dissent are simply erased.
Ramaswamy, very skillfully, in layman’s terms, takes apart the politics of this “Wokeism”, and the people behind it, complete with their goals and their deceptions. He explains how they shut down opposition and speech they disagree with, he gives many examples of the damage woke behavior has caused. He defines it is a religion, and as such, it rules the lives of its followers who have complete faith in their righteousness. Those that don’t agree are excommunicated from the movement, ergo, they are canceled, boycotted, and fired when the pressure mounts too high.
Unfortunately the results of the woke movement are already with us, so, rather than dismantle it, which is an impossibility, he attempts to offer ways to redesign it. He carefully explains their tactics, their fake outrage and their threats, and basically treats the followers of woke politics as performers. He offers advice to make Americans more appreciative of what they have and suggests the formation of a citizen army dedicated to public service. It should be mandatory, the way it is in other countries, like Israel, but not necessarily military, rather geared toward the community. In this way, he believes people will work together and unite under the umbrella of common goals, rather than constantly dividing themselves into separate groups fighting each other, based on race, religion or politics.
Ramaswamy does not believe in giving in to the mob, but rather he believes in reforming it, in fighting back. The book is filled with information, leading to his conclusions, and is sometimes repetitive, but always easy to follow. He also reads his own audio very well, which is an exception, because most authors are better off with a professional. His final words remind the public that when it “woke” up, it might not necessarily have been fully awake. We must restore America’s dream.… (més)