Paul Gigot interviews environmentalist Bjorn Lomborg.
President Joe Biden, like many on the left, sells himself as a champion of the working class. But, time after time, Biden has proven that in order to promote his ideology, he will eagerly empower many of the same billionaires and massive financial institutions he claims to hate, often at the expense of hardworking American families.
A recent regulatory move governing financial institutions provides the latest, and perhaps best, example.
In January 2021, just weeks before President Trump left the White House, the Trump administration’s Office of the Comptroller of the Currency (OCC) issued a new regulation – titled Fair Access to Financial Services – that would have made it illegal for large banks to discriminate against politically disfavored industries, such as fracking.
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The Trump-era rule would have applied to banks “with more than $100 billion in assets” and “that may exert significant pricing power or influence over sectors of the national economy.”
However, a little more than a week after Biden’s inauguration, his administration announced that it had “paused” the already finalized Trump-era banking regulation, sending a clear message that it will not survive a Biden presidency or even be allowed to appear temporarily in the Federal Register.
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Although Biden will likely never talk about it in public, his administration’s decision to stop Trump’s Fair Access regulation – a decision widely supported by Democrats in Congress – will undoubtedly allow banks to push progressive ideas on the American people, whether they like it or not.
This is especially true when it comes to climate and energy policy. Public opinion polls have consistently showed that when the American voters are given all of the relevant information, including costs, they typically oppose many of Democrats’ most radical and expensive climate proposals.
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For example, one 2019 survey by the Associated Press and the NORC Center for Public Affairs Research found that 68% of Americans said they would not support paying even $10 more per month in higher electric bills as part of an effort to slow climate change. A whopping 83% of Americans, including many Democrats, said they would not pay $75 per month extra.
Perhaps even more telling, the highly publicized Green New Deal resolution promoted by Rep. Alexandria Ocasio-Cortez, D-N.Y., had become so politically toxic by the time it came up for a vote in 2019 that it failed miserably in both chambers of Congress. In the Senate, AOC’s resolution failed 0-57.
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Fortunately for Democrats, however, Biden’s rule change will once again allow banks to cause immense harm to the fossil-fuel industry, as well as to any other business sector that relies on fossil fuels, by allowing banks to discriminate against businesses that aren’t “green” enough for the left.
If enough banks refuse to do business with fossil-fuel companies and related businesses, those companies will not be able to survive in the long run, forcing Americans to turn toward whatever energy options left-leaning banks allow to exist.
This is not a warning or a problem that could emerge at some point down the road. It is already here.
Banks have repeatedly promised to phase out conventional energy from their business operations. In fact, they have gone much further.
Many banks are now telling investors that they will, over the next few decades, require their entire financial operations to become net-zero carbon-dioxide emissions. This means banks are planning a future in which they will only work with companies that agree to the left’s environmental agenda, regardless of how harmful that might be to the overall economy or how many jobs it could cost.
For example, in February, Bank of America said, “Building on Bank of America’s long-standing support for the Paris climate agreement, the company today outlined initial steps to achieve its goal of net zero greenhouse gas (GHG) emissions in its financing activities, operations and supply chain before 2050.”
Similarly, Citi CEO Jane Fraser said on March 1, “We believe that global financial institutions like Citi have the opportunity – and the responsibility – to play a leading role in helping drive the transition to a net zero global economy and make good on the promise of the Paris Agreement.”
On March 8, Wells Fargo CEO Charlie Scharf announced, “Climate change is one of the most urgent environmental and social issues of our time, and Wells Fargo is committed to aligning our activities to support the goals of the Paris Agreement and to helping transition to a net-zero carbon economy.”
Godman Sachs, JPMorgan Chase, and Morgan Stanley have also made similar pledges.
Of course, had Trump’s rule been allowed to stand, none of this would have been possible. Banks would have been required to base financing decisions on the creditworthiness of the applicant and other relevant financial information pertaining to a potential borrower’s business activities.
Banks would not have been allowed to simply throw up a sign saying, “Natural gas companies are not wanted,” and then refuse to do business with anyone related to fracking, for example.
However, thanks to the regulatory changes now being made by the Biden administration, banks will have the power to collectively kill any industry they – or their allies in Washington – want, and not just those linked to fossil fuels, either. Gun manufacturers and sellers have also been targeted by some banks in recent years, for example.
Because many banks are private institutions, some, including many on the political right, might argue that they should be free to discriminate against any business they want, and if we lived in a truly free-market economy, I’d agree with them. But America doesn’t have a totally free-market economy.
Corporations and banks benefit from special tax provisions, legal protections and from laws that allow the nearly endless printing of money. In other words, large corporations are creatures of government, so it is more than reasonable that they should have to treat other businesses and individuals fairly and not become quasi-political institutions that do the bidding of political groups.
Why are banks so willing to go along with the left’s goals? This is just speculative – and there are many other potential reasons, including fear of regulatory retribution – but the catalyst most likely driving their decisions is that many banks, financial institutions and big Wall Street investors are convinced that the infrastructure and energy policies that Democrats are now attempting to put into place, as well as actions taken by central banks, offer a massive financial opportunity.
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The flood of Federal Reserve-printed cash cascading into the financial system to stop a “climate crisis,” as well as gigantic new spending bills by Biden and the Democrat-led Congress, would make bankers even richer than they already are. All banks must do to help move things along is to assist Democrats by promoting wind and solar energy companies and killing their competitors.
All of this sounds so diabolical, I know, but this is simply how business is done in the Swamp, and right now, the Swamp creatures are running the show in Washington.
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