How Did Corporate America Not See This Coming?

Because the C-Suite Now Resembles an Ivy League Faculty Lounge

When I was in college in the mid-80s, political correctness was the woke mindset of the day. I mistakenly joked amongst my friends that my academic colleagues' politically correct ways would quickly fade away once they entered the workforce. I assumed that the "real world" would not tolerate such ununiting and unprofitable nonsense. Little did I know that the collegiate graduates from the 80s would not become acclimated into the real world but that they would instead, convert the real world into their quasi-post hippie seeking utopia ideals. Yes indeed, as my Gen-X compadres are now at the pinnacle of their careers and running the corporations, religious organizations, and governments of the world, they have brought their 80s style political correctness to full fruition and my sophomoric jokes about it no longer seem so funny.

Case in point, I recently read Hubert Joly's book, The Heart of Business on how he turned Best Buy around. It is a good read and an inspirational story of how one business leader’s vision rejuvenated the struggling retail company’s performance. It is reminiscent of Herman Cain's book, Leadership is Common Sense, where he discussed his tenure as Godfather’s Pizza CEO. Herbert Joly understanding of the human aspect of a corporation and how to motivate them into a cohesive organization is laudable. However, I was taken aback by Chapter 4 titled The Tyranny of Shareholder Value, where Joly discussed BlackRock CEO, Larry Fink and his push to have investment go beyond profit and contemplate "climate change." He then proceeded to discuss surveys by the World Economic Forum and its 2020 Global Risk Report whereby shareholders expectations are shifting to a more "politically correct" attitude on investing.

Later in Chapter 5, The Business of Building Cathedrals, Joly again references BlackRock leader Larry Fink's annual letter to CFO companies in which he says, "to prosper over time every company must not only deliver financial performance but also show how it makes a positive contribution to society" and "without a sense of purpose no company either public or private, can achieve its full potential." Now those statements in themselves are not a bad thing and generally refer to how companies tend to perceive themselves. However, Larry Fink is a wolf cloaked in sheep's clothing. He could give two hoots about company missions beyond profit. This is more than an overt political overture; it is the fashioning of a golden fleece to the gods of wokeness. And, if it was just that I could blow it off as virtue singling claptrap. But Fink, and by association Joly, are trying to monetize wokeness by being the ultimate arbiters and the dictators of politically correct compliance. Here the Golden Rule applies as Larry Fink runs the world’s largest investment fund. As the saying goes, he who controls the most gold gets to make (and profit by) the rules.

Where would corporate leaders, financial managers and investment gurus get the notion that they can manipulate people into investing in woke causes over profits? Simple, they took a page (or 2000) from the American tax code. The entire US tax code is just one big social manipulation experiment. It is a series of financial punishments and rewards woven into an elaborate scheme to nudge society into certain state approved behavioral directions. The US tax code long abandoned serving as a government funding mechanism. Don't get me wrong, the punishment part of the tax code far exceeds the reward part, to the tune of 3.8 trillion in 2021. But that collection is merely the by product of the government "carrot and stick" approach to managing social behavior.

The Davos denizens and Larry Fink types have taken note to the masses willingness to be manipulated by a progressive tax code and the net revenue that is derived from such a venture. They are doing to the financial world with ESG (Environmental, Social, Governance) regulations what the tax code does to individual and corporate taxed citizens. Where the progressive tax code’s catch phrase for compliance is “pay your fair share,” the World Economic Forum charade is concealed by the nebulous term "shareholder capital.” This nefarious term is utilized by the financial charlatans, who take to the stage in "Jabberwocky-like" fashion to impress upon investors  in meaningless and unreasonable terms, how businesses will be evaluated and promoted. This is all done to distract investors with their left hand while funneling massive amounts of woke money into their pockets with the right.

Why is not simply managing companies to make a profit enough for the Davos crowd? Because that type of wealth generation does not come with the prerequisite elite understanding of citizens proper stations in life. Sans corporate woke compliance, a mere plumber, bricklayer, or tradesmen can become a millionaire by prudent investing in profitable companies. Under that simple system of wealth generation, the unenlightened simply bypass elite millionaire "club rules." For elite financiers, the “why” behind wealth accumulation is far more important to project than the wealth itself. This is where the faculty lounge meets the C-Suite because the “New World Order” business model has no tolerance for simple wealth accumulation.

Wealth, for the faculty lounge occupants, needs to be managed by learned elites for the benefit of great causes. Wealth, for these PhDs, certainly cannot be left in the free hands of common folk to do with as they wish. The woke C-Suite Executives are in lockstep with their old professors in believing that wealth generated from a business of “purpose” is noble and thus scrubbed clean of its capitalist grime.  What investors need to know about the new woke corporate leadership is that they are only dangling “shareholder capital” out there long enough to lull the crowd into an investment compliant slumber. It is only a stopgap until these executives figure out how to achieve their Fabian Socialists’ desire for a cashless society. Until then, the leaders of financial institutions are more than happy to use the capital of industry to destroy free markets. It is only temporary until they can push ordinary people into owning nothing and being happy about it.

The only reason government is allowing the “genies” of high finance out of the bottle to manipulate large corporations into complying with ESG is because those fund managers are accomplishing what big government politics have failed to achieve through legislation. Congress, however, does not learn from its mistakes. Legislators, through their propensity to avoid staining their own hands, have already created a perpetual deep state that has its own rules, regulations, and protections; even protections from the very government leaders that breathed them into existence.  The government is now, through the cover organization call the World Economic Forum, creating a deep corporate state. And once government cedes the keys to the hen house to the Finks of the World, we will all be held hostage to our new SPECTRE-like corporate overlords.

The people of the world will accept the new Deep Corporate State because they have been groomed to listen to and believe authoritative experts. They will blindly continue to fund their 401ks and receive their NPR accolades for being a good citizen. For investors have bought into the "pickleball" solution to life. That is, they now embrace a simpler version of the investment game that takes for less talent, conditioning, and mental stamina to play.