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Democrats defend free markets while Republicans target Wall Street

Waters this month accused Republicans of being “anti-capitalist, anti-investor, anti-business and anti-American” when they launched hearings to discourage efforts that BlackRock CEO Larry Fink and other industry leaders say are critical to addressing the long-term risks of climate change to investors. The House stepped up scrutiny as Republican state officials and presidential candidates take an even tougher approach, led by Florida Gov. Ron DeSantis. fighting with Disney and other big corporations on social issues.

“It’s a change of events. It’s strange,” Ellison, a former co-chairman of the Congressional Progressive Caucus, said in an interview. “It seems like people on the conservative side are arguing to try to dictate to private, profit-seeking companies what they can and can’t do.”

The response illustrates how the GOP’s escalating culture war with big business is straining its relationship with Wall Street and creating a new line of attack for Democrats ahead of the 2024 election. Brad Sherman (D-Calif.) said at a hearing this month that former President Ronald Reagan “would be ashamed” of his party’s new approach.

“The party formerly of free markets has decided that it will use the power of government to beat Disney, to beat the banks that … won’t invest in the carbon industry,” the representative said. Jim Himes (D-Conn.) said in an interview. “We defend free markets against a Taliban-like attack on the private sector.”

House Republicans seeking to discourage climate-focused investing argue that they are doing so to protect individual investors from poorer financial returns, rather than to restrict choice. They say it’s about protecting public companies from pressure from activists, blue-state pension funds and regulators. The fossil fuel industry is supporting the GOP’s attempted crackdown on sustainable business.

Rep. Andy Barr (R-Ky.), one of the top Republicans on the issue, said at a hearing this month that critics have responded to anti-ESG proposals “with hysteria, even invoking Trotsky, to conflate non-owner interest groups, rouse institutional investors and bona fide shareholder advisory firms.” Proxy advisory firms provide guidance to investment managers on how they should vote on shareholder matters at public companies.

Barr sponsored a measure that Republicans pushed through Congress earlier this year, with the help of a few Democrats, that would have repealed a rule from Biden’s Labor Department which allows investment in retirement linked to environmental and social objectives.

Biden vetoed the retreat while Democrats flexed free market values.

“This bill would put your retirement savings at risk by making it illegal to take into account risk factors that MAGA House Republicans don’t like,” Biden. he said on Twitter at the time. “Your plan manager should be able to protect your hard-earned savings, whether the representative. Marjorie Taylor Greene like it or not.”

Democrats argue that the Republican crusade against sustainable investment is an effort to protect the fossil fuel industry. The American Petroleum Institute, for example, supports a Barr bill that would require investment advisers and retirement plan sponsors to prioritize financial returns over ESG factors. Investor advocates have warned that anti-ESG legislation would insulate public companies from shareholder input and deprive investors of important information.

“One thing I’ve learned in 15 years in Washington is that very few free market players want a real free market with real competition,” Himes said. “They want protection, they want subsidies, they want tax breaks. So there’s not a lot of free traders out there, not in the supposedly free market.”


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