The only thing worse than politics running business investment is the Texas government threatening to blacklist legal, private business decisions.
Texas lawmakers last year passed and Gov. Greg Abbott signed into law a measure that threatens companies that they consider are “boycotting” the fossil fuel industry with the loss of state contracts and investments from Texas pension funds. In recent days, Texas Comptroller Glenn Hegar asked JPMorgan Chase, BlackRock, Wells Fargo and several other financial companies for their investment strategies for oil, natural gas and coal.
Lt. Gov. Dan Patrick and Texas Railroad Commissioner Wayne Christian, who faces a GOP primary runoff in May, were among the ringleaders who pitched this ill-advised measure. “Extremists are coming after your retirement account,” Christian said about firms that don’t invest in fossil fuels, adding that “this sends a strong message to big business, that if you boycott Texas energy, Texas will boycott you.” And Patrick specifically requested in a letter to Hegar that BlackRock make the list, citing the investment management firm’s support of “net zero” targets for companies to reduce emissions.
Never mind that BlackRock has invested in several oil and gas firms, including ExxonMobil and ConocoPhillips, with some $91 billion now invested in Texas fossil fuel companies.
Never mind that many investment companies have asked portfolio companies to explain their plans for meeting zero-emissions targets, or that many oil and gas companies have said they want to get to “net-zero” carbon in their own operations.
Never mind some firms that may face reprisal have invested billions of dollars and employed thousands in Texas.
What Texas Republicans are ignoring is that there is a better way to determine where to put state money. It’s called the market. Firms that make decisions based on social causes could see lower returns or higher returns depending on how the market responds. How businesses decide to allocate their funds is up to them. They don’t need the power of the government putting its weight on their investment decisions.
Choice is the essence of the free-market at work. Investment firms have shied from firearms makers and tobacco companies over business practices and products, pulled investments to protest human rights violations, or as Texas is doing, reviewing investments in Russia to isolate the global pariah known as Vladimir Putin. That’s their right, and many of those decisions were absolutely correct. Often, the market rewarded those decisions. Sometimes, it has punished them. Investors figure it out.
But Texas isn’t taking a moral stand. Instead, state leadership is using pension funds as leverage to arm twist private firms into supporting Texas energy. That’s the opposite of conservatism.
If you don’t think that this is a slippery slope, consider this. The city of San Francisco refuses to contract with businesses in 28 states, nor will it permit official travel to those states. And yes, Texas is on San Francisco’s blacklist for passing restrictive voting, LGBTQ and abortion laws. Guess what? City administrators say these policies — wait for it — make routine business more difficult and expensive to conduct.
How about this novel idea? Instead of punishing firms for private investment decisions, invest Texas pension money to get the best return, and don’t forget that wokeness from the right can be every bit as illogical and insidious as wokeness from the left.
Dallas Morning News
