Derek Kreifels is the CEO of the State Financial Officers Foundation, a group of 35 Democratic and Republican state treasurers from 28 states across the country. In this episode, we discuss how the group came about, why it exists, and what it's focused on. Dr. Jordan B. Peterson has created a new series that could be a lifeline for those battling depression and anxiety. We know how isolating and overwhelming these conditions can be, and we wanted to take a moment to reach out to those listening who may be struggling. With decades of experience helping patients, Dr. Peterson offers a unique understanding of why you might be feeling this way. In his new series, "Depression and Anxiety: A Guide to Healing," he provides a roadmap towards healing, showing that while the journey isn't easy, it's absolutely possible to find your way forward. If you're suffering, please know you are not alone. There's hope and there's a path to feeling better. Go to Daily Wire Plus now and start watching Dr. B.P. Peterson's new series on Depression and Anxiety. Let this be the first step towards the brighter future you deserve. Today's guest: Derek Kreiffels is a former state treasurer from Kansas, who served as the Deputy Treasurer of Kansas for six years and is now the President of the SFO Foundation. He's been with the organization for 11 years and has been a member of the group for the past 11 years. Derek talks about what it s been like being a state treasurer in 28 states and why it s important to be a part of a group like it, and how important it is to be involved in public finance and public service, and the importance of being a leader in public service and public trust. And what it means to be part of an organization like this type of organization. Listen to this episode to learn more about his vision and what he s been doing to support other organizations like it. You can find out more about the organization and his vision for the future of public service in this episode of the show. Subscribe to DailyWire Plus. Music: "State Financial Officers' Foundation" by The State Financial Officer's Foundation on SoundCloud and other resources that can help you get involved in the process of building a better future you can be a little bit more involved in your day-to-day life in your state's financial future. Thank you for listening to this podcast.
00:00:00.940Hey everyone, real quick before you skip, I want to talk to you about something serious and important.
00:00:06.480Dr. Jordan Peterson has created a new series that could be a lifeline for those battling depression and anxiety.
00:00:12.740We know how isolating and overwhelming these conditions can be, and we wanted to take a moment to reach out to those listening who may be struggling.
00:00:20.100With decades of experience helping patients, Dr. Peterson offers a unique understanding of why you might be feeling this way in his new series.
00:00:27.420He provides a roadmap towards healing, showing that while the journey isn't easy, it's absolutely possible to find your way forward.
00:00:35.360If you're suffering, please know you are not alone. There's hope, and there's a path to feeling better.
00:00:41.780Go to Daily Wire Plus now and start watching Dr. Jordan B. Peterson on depression and anxiety.
00:00:47.460Let this be the first step towards the brighter future you deserve.
00:00:57.420Hello everyone. So I'm talking today with Derek Kreifels, who is CEO of the State Financial Officers Foundation.
00:01:17.240And normally, perhaps, under normal conditions, that might not be something notable for all concerned,
00:01:25.700but in the crazy upside-down clown world that we all currently inhabit, this has become incredibly relevant.
00:01:32.140So I met Derek a couple of days ago, although I've been retweeting a lot of what he's been putting out on Twitter for quite a while.
00:01:38.540And I wanted to talk to him today so that everybody watching and listening can be brought up to date about what's going on on the financial front
00:01:50.120in relationship to states and their investment strategies.
00:01:55.120So, Derek, let's start with a little bit about your background and about your situation, your position right now,
00:02:00.880and then we'll talk in some detail about exactly what it is that you're doing with the other state financial officers.
00:02:31.160I'm just a guy from Kansas, from a small town in Kansas.
00:02:34.820I served as the deputy treasurer of Kansas for six years.
00:02:40.080During that time, I worked with a group of state treasurers,
00:02:44.600and we realized that there was a need for an opportunity to come together to talk about some of the state financial issues,
00:02:53.320public finance issues, both at the federal and state level, from an unapologetically free market perspective.
00:02:59.340And so, there were other treasurers organizations operating, but none of them really were excited to talk about it from that free market perspective like we were.
00:03:10.180So, myself and eight other state treasurers co-founded the State Financial Officers Foundation 11 years ago.
00:03:18.660And together, we've just been raising awareness and educating the public and these officials as they get elected on issues of public finance,
00:03:31.200whether it's dealing with 529 college savings plans that a lot of the treasurers administer,
00:03:36.100unclaimed property that they administer, some of them sit on boards of state pensions,
00:03:44.700some manage enormous state banking contracts, some manage short-term treasuries.
00:03:51.780And so, we have a saying in our world that if you've seen one state treasurer's office,
00:03:57.600you've seen one state treasurer's office, because they're all a little bit different based on state statutes.
00:04:02.800And so, I have this honor to work with all of them across the country and kind of bring them together
00:04:10.100and help connect the ones that might have another idea that might work in another state.
00:04:15.160And I try to connect them and be the glue relationally.
00:04:18.740How many state treasurers are now part of this State Financial Officers Foundation?
00:05:13.380There is a group called the Democratic Treasurers Association.
00:05:17.160We are not blatantly Republican, though.
00:05:19.620We've had an independent treasurer be a part of our group.
00:05:23.900I think when you, in the beginning, when we would invite other Democratic treasurers and you, you know, use the phrase free market, it just tended to attract a certain kind of elected official.
00:05:34.980And so, you know, we have opened our doors and invited multiple, you know, folks from different parties in.
00:05:44.180But, of course, the ones that are really interested and key in on that free market perspective are usually Republicans.
00:05:52.540So, do you want to tell everybody, broadly speaking, what a state treasurer and the other individuals who are involved in your organization, what they're primarily responsible for?
00:06:03.700And also, how that relates to the elected officials?
00:06:07.360And then also, why that's relevant for citizens who are listening?
00:06:11.260Because people need to know, well, why they should care about what state treasurers do.
00:06:15.600Like, what impact is it going to have on their day-to-day lives?
00:06:20.820The easiest way to think about a state treasurer or one of these financial officers is that they really are the chief financial officer for their state.
00:06:29.540They see the inflows and the outflows.
00:06:32.660They see the revenues coming in from, you know, tax revenues or other sources.
00:06:37.780And they see that the way that the state spends the money.
00:06:40.280Most of them manage the state's checkbook, right?
00:06:42.940So, they really see the day-to-day transactions.
00:06:47.040One thing that we did when we first started SFOF was we did a poll and we asked in several states, who do you trust more on state financial matters?
00:06:57.160We gave them the choice of their governor, their state treasurer, or their member of Congress.
00:07:01.800And the lowest that a state treasurer received was 60%.
00:07:05.040The governor was usually 20% to 25%, and the member of Congress, regardless of party, was trusted less than 10% of the time in issues of public finance.
00:07:17.120And so, we knew that we had a really powerful tool to leverage where, you know, a lot of people don't think about these down-ballot offices very much.
00:07:29.360You know, it's not as sexy as being governor or U.S. senator.
00:07:35.200But these men and women are on the front lines watching the dollars and cents.
00:07:40.100And, frankly, watching how decisions that are made in Washington impact, you know, the lives on the ground in the state from a financial perspective.
00:07:49.700So, why do you think that the treasurers were more trusted?
00:07:54.760You know, I think it's just simply because they don't get involved in a lot of other issues.
00:08:03.720You know, if you take into account, you know, a governor or a member of Congress, well, at first I'd say that when it comes to a member of Congress, you know, there's very few people that I think would say that they could trust the United States Congress in terms of financial restraint or financial responsibility.
00:08:21.720I think for governors, they're just such – they're involved in such a breadth of issues that, you know, if you – it's much easier to make friends or foes depending on where you land on whether they're social issues or financial issues.
00:08:36.560And I think, you know, just the simple fact that most of the state treasurers, state auditors really are focused on fiduciary duty, fiduciary responsibility.
00:08:47.380I think that's why the general public tends to gravitate towards those officials when it comes to things regarding money in their state.
00:08:55.060How would you define – because this is going to be a crucial issue in our discussion as we go forward – how would you define fiduciary responsibility?
00:09:02.860I'd say fiduciary responsibility is when someone is in a position of authority responsible for some pool of money or organization of money that they are required by law many times,
00:09:24.500at least in theory, at least in theory, to do what's best in the best interest of that organization or, in this example, for a state.
00:09:34.120Right, and so that's – there's also something kind of local about that.
00:09:37.820So, you know, if you're involved in a corporation and you have a fiduciary responsibility within the corporation,
00:09:45.980your responsibility to the shareholders of the corporation, and I would say the consumers as well, or the customers,
00:09:54.040is to do what you can ethically at the level of that institution.
00:09:59.140And so your proper role is to serve the interests of the shareholders, however that might be constituted,
00:10:06.620rather than the interests of some third party or alternative organization,
00:10:11.980which would mean you're in some sense operating as a fifth column.
00:10:14.580So if you do your fiduciary duty, you're undertaking the role that's been assigned to you at the level that's been assigned to you.
00:10:22.740And that's going to be a crucial issue as we progress with this conversation because what's been happening,
00:10:28.820and this is partly why you've become active on Twitter, I would say, and other social media chapters,
00:10:33.320is that the fiduciary responsibility of states and corporations alike has started to become subordinated to other interests, let's say.
00:10:43.800And that's particularly true on the ESG front.
00:10:47.520And so maybe you could walk everybody who's listening through that rat's nest.
00:10:53.300We could talk about what ESG means, we just need a definition for it,
00:10:56.840and then also why that the existence of the ESG principles might constitute a conflict with fiduciary duty.
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00:12:47.680It's a good thing we've got some time.
00:12:49.620But ESG stands for Environmental, Social, and Governance.
00:12:52.960And frankly, it's a type of investing where a group of activists are frankly weaponizing public capital money to advance a political agenda.
00:13:09.280And it could be done in the name of numerous issues.
00:13:16.260Lately, it's been focused on the environmental climate change issues.
00:13:20.600The S, the social part of ESG, tends to cover some of the biggest social issues of our time, whether it's abortion, whether it's Second Amendment rights.
00:13:32.400It can even be connected to some of the issues of anti-Semitism happening around the country.
00:13:38.960And then governance is under that is just making sure that you have good governance, that you're not maybe making racial quotas, but you're getting good fiduciary members.
00:13:56.320You're getting good board members that have the experience to be able to turn that, make those decisions for the shareholder the best way they can.
00:14:05.420Okay, so the people who've been putting this forward are operating.
00:14:08.220Please correct me at any time when I haven't got this exactly.
00:14:11.280So they're putting forward a vision that the corporate enterprise, regardless of at what level it's operating, should be subordinated to a set of hypothetically ethical principles.
00:14:23.840And that's often brought forward under the guise of stakeholder capitalism, is that merely, merely serving the shareholders' interests isn't sufficient, that corporations should be required, or at least encouraged, but generally required, to take a much broader view of the world.
00:14:42.240And they should subordinate their corporate concerns to, well, let's walk through it, environmental issues.
00:14:49.480Well, in principle, what it means is that we accept that the corporations are required to accept the story that the world on the environmental front is hovering on the brink of disaster, positive feedback, or tipping point-induced disaster.
00:15:07.140That the cause of that is unidimensional, and the cause essentially is overproduction of carbon dioxide, and that that's such a pressing problem that all other issues should be subordinated to its diminishment as rapidly as possible.
00:15:24.360So that's, and then there's other environmental concerns that might come out of that.
00:15:27.620But the fundamental issue here is that all corporate enterprises and activities should be subordinated to this radical environmentalist viewpoint.
00:15:37.140And then on the social front, what you have brought into the fold is essentially the diversity, equity, and inclusivity movement in all of its tentacular splendor.
00:15:48.720And there's an association with a particularly quite radical left-wing view of the world that gets brought into the corporate domain on that front, insisting that people should be identified primarily by their race or their sex or their gender or their sexual preference.
00:16:04.820And that that identification constitutes grounds for the distribution of resources and position.
00:16:13.320And then, well, what's happening with ESG on the governance front is somewhat more unclear, I would say, as opposed to environment and social.
00:16:21.800But the fundamental proposition here is that merely serving the interests of the corporation and the shareholders is insufficient.
00:16:30.340That has to be subordinated to a broader view.
00:16:32.480And, you know, there's something kind of compelling about that because we know that local mere greed on the part of corporate entities can cause a substantial amount of problems.
00:16:43.900But the emergent problem seems to be that subordinating that fiduciary duty to something like central planning oriented along a radical left environmental apocalyptic scheme is not going to redress those problems.
00:17:00.360And by any measure that I know of is likely to make them worse.
00:17:04.700And this has become particularly crucial in recent years for everyone watching and listening because there are major hedge funds in particular, BlackRock and Vanguard, foremost among them, who have, and they control as a staggering amount of investment money.
00:17:23.900I can, I can, an almost incomprehensible amount of investment money.
00:17:27.680They've joined the ESG club, so to speak, and are punishing corporations and states who don't abide by ESG mandates.
00:17:36.320Is that, now, have I got any of that wrong?
00:17:39.400Yeah, well, I would just, there's a few things I would just clarify.
00:17:43.260I think that, you know, you're right that these giant fund managers, you know, BlackRock was worth about $8 trillion as of the first of this year.
00:17:54.680I think State Street is the other one that's really big.
00:17:59.980They're really leveraging the money that they manage on behalf of these state pensions, which is, you know, everyday Americans' money.
00:18:08.440And they're then leveraging them to advance these social causes.
00:18:11.580And our issue isn't necessarily the fact that someone would choose to invest this way, to invest their personal dollars.
00:18:20.060If they wanted to invest in a fund that protects the environment or that does, you know, something on a social issue, that's their choice.
00:18:27.380And that's the great thing about America.
00:18:28.960But what we have a real problem with is when the billions of dollars that are being invested by BlackRock, by State Street, by some of these other companies, Vanguard has been one of those players.
00:18:44.580But they've recently just made some public comments.
00:18:47.080Their CEO, Tim Buckley, was just making some comment about that ESG is not a winning proposition from a financial perspective.
00:18:56.560Which means, let's point out very clearly, which means that it is not a winning proposition, right?
00:19:03.580It's like there's no, it's a winning proposition except on the financial front.
00:19:07.940It's like, no, no, no, that's the measure.
00:19:10.380And so, yeah, so your argument is people can invest in whatever the hell they want.
00:19:14.700And absolutely fair enough, you know, if you want to invest in a corporation or buy the products of a corporation that purports to be serving the environment, that's all well and good.
00:19:23.900But when it starts to become mandatory and failure to do so results in punitive consequences, that's a whole different ball of wax.
00:19:33.600And, of course, that's exactly the problem that you guys are dealing with at the state treasury level.
00:19:38.140And the reason for that, just so everyone's clear, is that part of your fiduciary duty is to ensure that such things as people's pension programs are properly funded and invested from an investment perspective.
00:19:53.060Because your job is to make bloody well sure that the money in the pension funds, for example, is stable and hopefully also growing.
00:20:00.460And if there are any outside influences that are going to interfere with that, then it's appropriate for you to be, what would you say, to oppose that in every manner that you possibly can.
00:20:12.540And so that's sort of where we're at at the moment, as far as I can tell.
00:20:16.180And so what's your organization's concern about and stance with regards to ESG investing and what have you done about it?
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00:21:34.260Yeah, so we have made a very public stance.
00:21:41.220Our members, our state treasurers, our public officials, you know, are really working in each of their states to do what they think is best for their state.
00:21:50.400You know, let me back up and just say that there is this movement internationally that came out of the Glasgow Accords that's Climate Action for Net Zero.
00:22:00.800There's a group called the Global Financial Alliance for Net Zero, which are basically all of the big banks and fund managers that are making commitments on their websites.
00:22:10.920They're saying, you know, that they're going to be net zero by 2030 or 2040.
00:22:15.560They're all making a little bit different commitments.
00:22:18.060But, you know, what we're doing is we're saying, look, you know, some of our states, the signature industry is oil, coal, or gas.
00:22:32.360We don't have to use your bank or your fund manager to manage our billions of dollars in business if we think that you're actually trying to hurt the primary industry of our state.
00:22:43.860So, take example, State Treasurer Riley Moore in West Virginia, who one year ago was able to work with his legislature to pass legislation to basically say, look, if you are a state bank working with any level of state government, university systems, et cetera, that was one of the authorities that he had was he could say, we're not going to work with you anymore if you're choosing to, you know, not work with coal, for example.
00:23:14.620It's one thing if it's not a good business decision.
00:23:17.420Maybe the company is having some issues and, you know, it's just not a good business model.
00:24:21.000But theirs is more on all-state contractors who work with the state to a certain financial level if they are actively discriminating against.
00:24:32.460We're talking about energy discrimination.
00:24:34.380These corporations choosing to discriminate against the fossil fuel industry in this, you know, mad rush to go to net zero, you know.
00:24:46.340Well, we should talk about that mad rush, too, because people listening might think, well, you know, wouldn't it be good if we could move away from coal?
00:24:54.740And, you know, I think you can make an argument on that front in some ways if you're very careful that the careful replacement, for example, of coal with liquid natural gas might be a net good, all things considered, in some situations.
00:25:07.760And then the possible replacement of liquid natural gas, even with nuclear.
00:25:13.060But you have to be willing to allow liquid natural gas.
00:25:16.800And you need to be willing to allow and encourage nuclear.
00:25:20.280And you also have to understand that liquid natural gas is also necessary for the production of ammonia, for example, which only feeds 4 billion people.
00:25:30.460And so this notion, and everyone watching and listening should be super clear about this, this notion that net zero on the carbon front is necessary is a lie.
00:25:39.480The idea that we're going to manage it by 2030 is preposterous beyond comprehension.
00:25:43.700I mean, the Biden administration itself has already admitted that it will be 240 years with optimistic projections before we can approximate anything like net zero.
00:25:56.160So all this is just a complete bloody lie.
00:25:58.560And you might say, well, you know, it's no worse a lie than many other lies that we've been told.
00:26:04.220Except that what we're seeing in places like Germany, for example, is that as we move hypothetically towards these idiot, pathological net zero sloganeering propositions, we get more unreliable power at a much higher cost, like four to five times as high, so that industry starts to move to places like China, which, by the way, don't have the best environmental regulations.
00:26:28.320And it's made Germany hyper-reliant on Russia.
00:26:32.260And more to the point, even on the environmental front, is there's no evidence whatsoever that what Germany has done, while they've devastated their reliable sources of power, has improved the environment one bit.
00:26:45.920The world used more coal last year than it ever has in the entire history of the planet.
00:26:49.980And that's partly because countries like Germany have been forced to rely on coal as a backup for their idiot renewable projects because they're too unreliable and they've shut down their nuclear plants.
00:27:03.940So anybody who's listening who thinks, well, you know, maybe the environmentalists are going too far, but coal should be off the table.
00:27:10.580It's like, you simply don't know what the hell you're talking about.
00:27:13.380It's also the case that for many people around the world, especially in developing nations, coal is a hell of a lot better and a lot less polluting than wood.
00:27:23.780And the option isn't coal or nothing or coal or liquid natural gas or nuclear.
00:27:29.640In many developing countries, the option is coal or wood or dung, which is, you know, one of the world's lower quality sources of energy, let's say.
00:27:40.240So the reason I'm on this rant is because I want to make sure that everybody who's listening knows perfectly well that even by the standards of the environmentalists themselves,
00:27:51.560this ESG movement, especially combined with net zero, is not only not going to work, it's not going to work.
00:27:59.860It will absolutely make things worse on the environmental front, as well as dipping, propelling a lot of people into poverty, undermining the stability that we take for granted on the industrial front,
00:28:13.640make power more unreliable and also tilt the world towards dependence on, well, dictatorial sources of power like an energy like obtained in Russia at the moment.
00:28:25.000Well, and I'm really glad you bring up the issue of poverty, because American energy, energy around the world has done more for human flourishing than any other sector, right?
00:28:42.000If you take away a country's ability to produce coal, natural gas, oil, you know, you can, a great case study would be to look at the country of Sri Lanka and what developed last summer, right?
00:28:55.520Where they didn't even have gas to cook on little stoves in their homes because of the federal regulations that had been implemented that were pushed down on the people.
00:29:04.680They couldn't pay for gas for their cars.
00:29:10.760So we know that this is, you know, and how that translates here, there was actually a video that came out just, I think, today on Fox News with the National Home Builders Association talking about a proposition that's being voted on in the Bay Area of California where they're trying to basically say no more gas stoves, no more gas hot water heaters, no more gas, you know, anything.
00:29:37.380And the Home Builders Association are saying, look, that's going to drive prices so high that the homeless problem is going to increase.
00:29:46.500And so it's a really big misnomer to think that we can get to this fantasy world of net zero and then still have, you know, human flourishing and the modern technologies.
00:30:02.500There's a great organization that I have to give credit to life powered part of the Texas public policy foundation has this great video that shows from, you know, the time that you wake up in the morning until you get to your office just in that first one and a half hours of your day.
00:30:21.000How many petrochemical products are involved in your life, whether it's you're in your alarm clock, in your bedsheets, in your clock, in your toothbrush and, you know, all of those things.
00:30:32.300And so this idea that we would somehow, you know, this is, I think this is where the struggle really is for these treasurers and auditors is we have companies like BlackRock, like State Street, who are actively saying and actively encouraging the companies that they invest in that they want this, you know, this net zero by a certain date.
00:31:02.480But what they're not telling the American people is that they're taking those dollars that they're investing on behalf of all these pensioners in America and they're trying to invest and leverage them so they can do business in China.
00:31:41.120We don't want to de-anize China precisely, too, because had we not been so utterly clueless on the energy front in the West, we would have been able to supply the Chinese with a much more reliable supply of liquid natural gas.
00:31:53.980So that's a particularly egregious sin on the Canadian front because our idiot Prime Minister, Trudeau, has done everything he possibly could to shut down the Canadian fossil fuel industry.
00:32:03.720And all that means is that, well, as you already pointed out, that China has found it necessary so its people don't starve to produce more and more coal plants, which is exactly also what's happening in India.
00:32:14.300And we could have remediated that to a large degree if we hadn't been so damn foolish for the last 60 years, especially on the nuclear front, but also in relationship to liquid natural gas.
00:32:23.940And so, and then for all of you who still might be residual environmentalists listening, you better bloody well understand that if we don't build a coal plant in North America or Australia, but we build one in China, it's the same damn air.
00:32:37.040And so the fact that we're making it impossible for any of these things to occur in the West just means that it's offloaded into another country.
00:32:44.620And that might be fine if it was only a matter of pollution of rivers because then the Chinese could deal with that.
00:32:50.320And, you know, that's a peripheral problem for us, even though it's not trivial.
00:32:53.600But since they're dumping carbon dioxide into the same damn atmosphere, all this ethical posturing is doing nothing.
00:33:02.560That's the thing we got to get clear here.
00:33:04.240These policies are actually making everything worse by the criteria of the people who put the policies in place.
00:33:11.420And that's just absolutely unacceptable.
00:33:13.800And it's hard for people, it's hard for people to understand what ESG means.
00:33:18.140And if you first hear about it, you know, it sounds kind of good because you think, well, those damn greedy corporations should be incentivized to serve more than their narrow self-interest.
00:33:28.540But then when you start to look at exactly what that means, like the devil's always in the details, you see very clearly that this is just another variant of deeply socialist centralized state planning.
00:33:43.500You know, you would expect that someone like Larry Fink, for example, who's CEO of BlackRock, would be enough of an evil capitalist not to saw off the branch that he sits on.
00:33:53.720It's like, what the hell is going on with these corporations who are bending over backwards to adopt these idiot ideological woke policies when they're clearly enabling like fifth columns of ideologues who are antithetical to absolutely everything they stand for?
00:34:12.740Or do you guys even bother trying to sort that sort of thing out?
00:34:15.880Well, you know, I would say, I would guess that Larry Fink would probably say it is capitalism that's driving him to do more business in China, right?
00:34:25.240It's this huge audience of untapped retail investors.
00:34:29.840And the real, again, the height of hypocrisy on this issue, if we take the social issues, you know, the left is always talking about how important it is to bring up the little guy and the left out and the forgotten.
00:34:41.160But they're not talking about, you know, the Muslim Uyghurs in China.
00:34:47.420They're not talking about the African children in the People's Republic of the Congo that are having to mine cobalt for China, you know, in order to produce all of the electric vehicles, all of the lithium batteries for our iPads, phones.
00:35:05.320There's a great new book out, I don't profit at all by promoting it, but I'm reading it right now, called Cobalt Red.
00:35:12.160Siddharth Kara, I think, is the author, who went there and saw these atrocities of these, you know, African children who are making maybe, you know, a dollar or two a day to cobalt, you know, to mine this dangerous mineral that China, you know, now operates and controls about 60% of the world's cobalt supply.
00:35:33.560China has been much smarter about owning and buying rich minerals than the United States has, and it's putting us at a huge disadvantage.
00:35:42.860And that's the other thing that I think a lot of our men and women are concerned about is just the position that ESG investing puts us in compared to countries like China.
00:35:53.600Right. Well, I don't have as much of a problem with BlackRock dealing with the Chinese, because I think the issue of how to include the Chinese in a broad free market economy is one that still requires a tremendous amount of debate.
00:36:07.080You know, everybody hoped that China would sort of sort itself out on the democratic front, at least quasi-democratic front, as their population became wealthier and less prone to starvation.
00:36:18.120And I think to a limited degree that's occurred, although the Chinese have backslid terribly with the pronouncement of Xi as like ruler till the end of time and their slide back into a real communist totalitarianism.
00:36:32.840I mean, so it's not exactly as if I'm a China fan, especially not one of the Chinese Communist Party.
00:36:38.140But, you know, I can see BlackRock investigating investment decisions.
00:36:43.040I'm more curious about why in the world they bought the entire environmental apocalypse narrative, along with the DEI nonsense on the governance or on the social front.
00:36:55.020Like, what is it about these capitalist enterprises that is tilting them in this woke policy direction?
00:37:02.640And how can they not see how counterproductive that is, given that they're fundamentally capitalist enterprises?
00:37:11.480I don't either, other than they believe it, right?
00:37:14.400I mean, that's what we have to—that's the conclusion you have to come to, is they absolutely believe that it's the right way to go.
00:37:21.080I think the other thing that I would say is the conservative movement in America has been slow to respond to a lot of this, as they have on other issues.
00:37:31.720But, you know, we—I talk to CEOs and C-suite executives on a regular basis who, frankly, privately will tell me, thank you.
00:37:41.660Thank you for giving us leverage now to say, we're hearing now from both sides, so we're going to stay neutral on this issue.
00:37:49.300Which, at the end of the day, that's what these men and women want.
00:37:52.680That's what these state treasurers and auditors want, is they want banks to be banks.
00:38:00.080Their fiduciary duty calls for them to only work with those companies that are willing to maintain and protect that idea of fiduciary responsibility.
00:38:10.960And sea level—seashore levels are not part of that fiduciary responsibility.
00:38:18.920That's the argument that the left is trying to make, is that that is fiduciary responsibility.
00:38:22.620And that's what the—that's what this Biden administration is trying to push out, you know, through the Department of Labor, through rule changes, through the Securities and Exchange Commission requiring ESG disclosures.
00:38:34.600They're trying to say that it is fiduciary responsible of you to pay attention and know how much the environment's impacting.
00:38:42.620That would be fine if they were investing their own money.
00:38:47.380Because maybe, you know, if you could make a case that keeping a corporate eye cast on the 20-year horizon, 30-year horizon on the environment front is going to guide your investment decisions in a manner that increases your profitability, no problem, man.
00:39:02.940If people want to bet on that, that's just fine.
00:39:05.240But when it starts to become a matter of compulsion and regulation, then, nope, you've definitely gone too far.
00:39:10.440I think people like Larry Fink, for example, and all the corporate types who are pursuing this ESG nonsense out of guilt, for example, here's what I think's going on.
00:39:24.040It isn't—the problem isn't that they're capitalists.
00:39:27.880The problem is, is that they're evil capitalists.
00:39:30.700And what I mean by that is that they're pursuing their ill-gotten gains in an unethical manner, fundamentally.
00:39:38.260And, you know, the left criticizes gigantic corporate structures for having this happen all the time.
00:39:44.960So it's certainly the case, for example, that big pharma falls into that category.
00:39:48.800And you can tell that because the biggest lawsuits in the history of the world have been successfully brought against big pharma.
00:39:55.160And so there's no shortage of evil on the capitalist front.
00:39:58.220But to attribute that to capitalism is foolish.
00:40:01.000Now, I think what happens with the CEO types who go along with ESG and DEI movements is they're guilty because of their ill-gotten gains, which I am not attributing to capitalism, by the way.
00:40:12.540And so then they look for an easy moral out, either that, or they look for a moral out that they think the population is gullible enough to buy.
00:40:20.720And so they banner wave and flag wave about net zero and about the fact that we're going to adopt our corporate responsibility on the environmental front.
00:40:29.220And they do that because it's easier than actually atoning for their greedy sins, let's say.
00:40:34.440Or they do that because they think it's a good way of pulling the wool over the public's eyes.
00:40:38.240Or some, you know, appallingly malevolent combination of both.
00:40:42.620Because otherwise, I don't understand it.
00:40:44.300Like, you have to be daft if you're a CEO not to notice that the DEI squad, diversity, equity, and inclusivity, and the ESG squad put forward an ideology that is absolutely antithetical to the principles upon which your company are based.
00:41:06.160And so then you say, well, why the hell would you do that?
00:41:39.560And I would say, too, that a lot of the students graduating from universities today, unfortunately, are, you know, pretty left of center.
00:41:49.080And so the really loud ones go to work for these big publicly traded companies.
00:41:53.540And that's how this whole idea of stakeholder capitalism comes in.
00:41:57.460And suddenly your employee is a stakeholder, even if they're not a shareholder, that they have some say.
00:42:03.060And I think that that's part of why they get caught up in these decisions as well, is they're listening to this younger generation who may have this, you know, idealistic thought of change.
00:42:14.680And it may be a really small, very loud minority.
00:42:21.700I've seen that in my own dealings with corporations.
00:42:24.100So, for example, in Canada, I published with Penguin Random House.
00:42:28.160And there was a bit of a rebellion among the younger people at Penguin Random House when they decided to publish my next popular book, right?
00:42:38.520Now, the first book, which was 12 Rules for Life, was one of the most profitable books that Penguin Random House in Canada ever published by a huge margin.
00:42:48.420And so, I was responsible for a substantial fraction of PRH's revenue over the last six years.
00:42:57.020And yet, when my second book was announced, before anyone had read it, there was a rebellion among the younger people.
00:43:04.600And then Penguin Random House had a town hall where a number of them cried about, and I mean literally cried about, what a terrible monster I was, despite the fact they hadn't read the damn book.
00:43:13.540And instead of firing all those people, which is exactly 100% what should have instantly happened, since they lined themselves up to identify themselves as people who should be fired because they wanted to implement censorship on a book they hadn't read in a publishing house,
00:43:31.320all that happened was that PRH hand-waved about how upset their new people were and tried to, what would you say, listen compassionately to their concerns and move forward.
00:43:42.620And, you know, they didn't end up cancelling my book, which, you know, I don't regard precisely as a favour, but the same thing happened also at PRH in New York.
00:43:56.480And so, but again, I see no excuse for it.
00:44:00.020It's like, why the hell would you go along with the radicals?
00:44:03.060You're so uncertain about your own moral principles, even as a publisher, that you won't fire people within your organisation who are outright calling for censorship?
00:44:13.520Well, and I would just add, too, one of the things that we've realised over the year, the last year and a half, as we've pushed back, is, you know, the three companies that we would like to mention a lot, you know, BlackRock, State Street, Vanguard.
00:44:26.940If you look at the ownership that they have in the top 500 publicly traded companies in America, together, they own anywhere from 18 to 20% on average of every one of those publicly traded companies.
00:44:41.740And so, they leverage this tremendous amount of authority.
00:44:44.420We have, you know, when we have publicly traded companies, we have this whole thing that's getting ready to start the proxy, the shareholder voting season is this spring, right?
00:44:55.300And that's what we've seen them do, is to start to direct behaviour of companies that they're going to invest in.
00:45:01.740If I'm BlackRock and I'm going to invest in your company, you're going to make sure that you don't invest in coal, that you don't invest in dirty agriculture, you don't invest in, you know, and they've got this checklist that, all in the name of ESG, and so it's very, it's coercion, right?
00:45:21.940It's preventing farmers and small businesses, you know.
00:45:30.120I mean, there's this whole, you know, cattle methane mitigation, you know, where, you know, it's a big part of, you know, BlackRock had some involvement with the state of Nebraska, for example, where they were, you know, there was question about which company they were going to invest in because big cattle ranchers, you know, cows poop and, you know, they produce methane.
00:45:51.720But, you know, that's part of this movement, is to kind of eliminate that, eliminate that industry.
00:45:58.300Yeah, yeah, well, that industry that feeds people, yes, yes, and feeds poor people cheaply.
00:46:03.940Okay, so let's talk about exactly how this came about, because people aren't going to understand this either.
00:46:08.920Okay, so now you just said BlackRock, State Street, Vanguard own between 15% and 25% of the shares in the top 500 companies.
00:46:18.600Okay, so now, how the hell did they manage to accumulate all that capital?
00:46:23.700So, why don't we, why don't you just walk through that backstory so that people understand what's happened over the last 20 years with regards to these huge corporations?
00:46:32.780I mean, I think the very simple answer is just that they've, over time, they've accumulated, you know, huge amounts of wealth and invested it back in these publicly traded companies.
00:46:52.320And so, walk us through what BlackRock is and why that's positioned them so powerfully, because people aren't going to understand that.
00:47:01.080Yeah, so, BlackRock manages everybody's 401k retirement fund.
00:47:05.820You know, almost every registered advisor uses BlackRock, uses iShares, and they are basically accumulating all of this wealth from private individuals who are, you know, unknowingly investing, you know, money with their, you know,
00:47:22.020retail advisor at their local, you know, office on Main Street USA, and then they're taking those dollars and investing them in ways that they want to to drive this agenda.
00:47:33.560So, that's actually why, that's actually why we started our educational campaign on December 1st.
00:47:40.840We started a campaign called Our Money, Our Values, because what we realized was there was this huge, you know, aside from ESG being a little wonky and hard to explain to the average American, we needed to make sure that they understood how it affected their bottom line and their retirement.
00:47:56.660So, what's happening is people have their pension savings, and there's reason to invest that in the stock market, let's say, to buy companies.
00:48:07.300Now, when you invest in the stock market and you become a shareholder, you also have voting rights.
00:48:13.740Now, what's happened is that companies like BlackRock, as they've aggregated individual investor capital, have accrued the voting rights to themselves.
00:48:24.020Right, and so, they can wield disproportionate influence, pretending to be the voice of the individual investors, but in reality, pushing forward this ESG agenda that we've been describing,
00:48:37.700often in a manner that runs contrary to the fiduciary interest of their investors.
00:48:42.620And that means all of you who are watching and listening who have pension funds.
00:48:45.900And so, and that's put a tremendous amount of power, like an almost unlimited amount of financial power, in the hands of very few actors.
00:48:54.000And you laid out BlackRock, Vanguard, and State Street.
00:48:56.680And so, that's what we're talking about.
00:48:58.420And people need to always know why this is relevant to them.
00:49:02.320It's relevant to them because this is your pension money.
00:49:05.880But not only that, this is your voting right that is being secretly, in some real sense, and in an underhanded manner.
00:49:25.440They were depending on companies like ISS and Glass-Lewis, who are, you know, also owned, percentage owned by BlackRock, Vanguard, and State Street,
00:49:36.300to basically vote those shares for this on behalf of the state pensions.
00:49:40.860And that's been part of the rub and part of the pushback from some of our states now is, you know,
00:49:46.940either bringing just blatant transparency to how those shares are being voted,
00:49:51.320what the issue is, and how the state pension, you know, representative voted on those shares,
00:49:57.280or asking and pushing to change contracts with companies like BlackRock so that they can't vote the state shares anymore
00:50:04.480and that they have personnel in these state offices that can do that.
00:50:08.000The problem that we have are some state treasurer's office, you know, employ thousands and thousands of state employees,
00:50:14.540you know, 8,000 employees in one case, and then, you know, there might be eight employees in a smaller state.