Over the past three decades and despite its mainstream position in US politics, the Republican Party has effectively eliminated its moderate wing, placing itself somewhere to the right of Marine Le Pen in France and closer to Germany’s far-right Alternative for Germany party.
That’s according to the German-based Manifesto Project, which reviews and categorises political parties on the basis of their manifestos and policies.
Many Republicans are funded by the gun lobby to block legislation aimed at curbing the scourge of gun violence in the US; others are similarly paid by the fossil fuel industry to deny climate change or play down its consequences.
Most (70 per cent, according to most recent polls) back Donald Trump’s false claim that the 2020 election was rigged despite Trump’s own attorney general William Barr finding no evidence of widespread election fraud.
Liz Cheney’s attempt to hold Trump and the previous White House administration accountable for their actions in the infamous January 6th, 2021 attack on the Capitol via the House select committee investigation was essentially an act of political suicide.
The three-term Wyoming Congress member subsequently lost her seat to the Trump-backed opponent Harriet Hageman, who repeated the former president’s “big lie” claims throughout the campaign.
The Republican Party’s latest political crusade, however, threatens to cut it off from its main financial backer, Wall Street.
Some Republican-led states are attempting to punish financial firms for climate-friendly investing or for taking on ESG (environmental, social and governance) criteria as part of their investment strategies, in a crackdown on what Republicans describe as out-of-control wokeness by asset management firms.
Florida governor Ron DeSantis, a potential presidential candidate, last month banned state pension funds from incorporating ESG factors into investments. The state board of administration, on which DeSantis sits, backed his proposal to ban the consideration of “social, political or ideological interests” when making investment decisions for the state’s pension fund.
Texas, the state which accounts for more than 40 per cent of the country’s crude oil reserves, is similarly seeking to isolate financial firms it says are hostile to the fossil fuel industry.
Texas comptroller Glenn Hegar has successfully blacklisted 10 financial firms from doing business with the state on the grounds they did not support the oil and gas industry.
Hegar, a Republican running for re-election in November, banned investment giant BlackRock and other investment firms — as well as some investment funds within large banks such as Goldman Sachs and JP Morgan — from entering into most contracts with the state until their stance on the fossil fuel sector was changed. He claimed that the US financial industry was pushing a “social and political agenda” which is “shrouded in secrecy”.
Hegar published a blacklist of “financial companies that boycott energy companies” to be used as a guide for divestment by state pension funds in Texas.
Other Republican-led states — West Virginia, Idaho, Arkansas — have now also stopped using certain investment firms over ESG or are planning to introduce rules that could deter their public pension funds from investing in ESG products or companies.
BlackRock, Credit Suisse, UBS and other firms have criticised the actions of these states, labelling them anticompetitive. BlackRock said that “elected and appointed public officials have the duty to act in the best interests of the people they serve”.
Ironically, BlackRock is one of the biggest investors in Texas oil and gas companies. It has also come under attack from the other side. New York City comptroller Brad Lander said last week he was reassessing business relationships with BlackRock amid concerns it is straying from its “climate commitments”.
ESG funds and climate investing are two of the fastest-growing parts of the global investment industry, with hundreds of new funds added each quarter. The sector now accounts for some $2.5 trillion worth of investment.
The Republican Party traditionally relies on Wall Street for financial support and campaign contributions. The party’s low-tax, light-regulation policies have made the party popular with corporate America.
The once-comfortable alliance has, however, frayed under Trump, who frequently incited trade wars to push his America First agenda, and who self-financed a significant portion of his presidential run.
Senator Pat Toomey, the most senior Republican on the US Senate Banking Committee, last week urged banks to stop “embracing a liberal ESG agenda that harms America”, as chief executives appeared before Congress for an oversight hearing.
“I can’t help but observe that when banks do weigh-in on highly charged social and political issues, they seem to always come down on the liberal side,” he said in his opening statement.
According to a recent study by Americans for Financial Reform (AFR), Wall Street firms spent a record $2.9 billion on political contributions and lobbying in 2019 and 2020. The study showed the sector spent about 2.5 times more money electing Joe Biden than it did on attempting to get Trump re-elected.
The Republican Party’s new anti-ESG drive has the potential to push more of this money towards the Democrats. Has the party finally gone too far right for big business?