Wokeness is stuff that most Americans of all races and genders can't stand. If they ate this stuff up, Disney—which has been indoctrinating children in gender fluidity through its programming—wouldn't have a stock price that hasn't moved in eight years. Bud Light would still be the nation's No 1. beer, not No. 3, after featuring a trans woman activist in a commercial. BlackRock would be advertising its fealty to Environmental, Social, and Governance investing instead of running away from it.
I would like to credit the conservative media with these wins. But a closer look at what is still a modest unwinding of woke—a sometimes overused term, but one that still so perfectly describes the progressive groupthink that seeks to remake the country and its culture into a left-wing hellhole—shows it has more to do with deep reporting by individual reporters (e.g., Chris Rufo), viral social-media moments, and everyday Americans simply exposing the perniciousness and idiocy of this ideology.
The conservative media—on this issue and many others—is a little more than an opinion-generating machine, and all too often a negative feedback loop. It leaves the reporting to last and misses an opportunity to have the impact that the mainstream media still does in driving the political and cultural conversation. This may be a harsh conclusion, but it's the reason why I wanted to subject the subject to journalism in my latest book, Go Woke Go Broke: The Inside Story of the Radicalization of Corporate America.
I hate the label "mainstream media," but for lack of a better word, this is a world I've occupied, working on the news side of the Wall Street Journal covering financial scandal, Newsweek when it was a major print magazine, at CNBC, where I covered the financial crisis and broke most of the major stories at that time.
I've been at Fox and Fox Business with a regular column in the New York Post for the past 14 years. Some would call those outlets "conservative media," yet I never changed the way I do my job, nor do my supervisors want me to. I've written and reported all my books the same way, whether it's exposing Wall Street scams, insider trading, the roots and impact of the 2008 collapse, or how progressivism has become an integral and insidious part of corporate American culture.
I engage subjects. I check facts. I question my underlying thesis throughout my reporting. I try to be fair to people I'm reporting on. My journalism moves stocks and has changed corporate behavior.
In that spirit, I spent a lot of time speaking with someone at the center of corporate wokeness, a man named Larry Fink, the CEO and founder of BlackRock. Fink is maybe the most powerful financier in America given Blackrock's size: It controls more than $10 trillion in assets. That means from his office in New York City, Fink holds stocks in the world's biggest companies, currencies of every industrial power, stocks, crypto, you name it.
He's also used his power to spread corporate wokeness through ESG techniques, and in the process has become a target of the conservative movement, so much so, he has backed off his allegiance to the investing technique.
Why Fink initially wanted to change boardroom behavior to scale back oil drilling, proceeded to expand DEI, then reverted is a great story. To his credit, he came clean, and it makes for a fascinating read. I'm probably the only reporter who got Fink to fess up about why he went woke in the first place. Based on reader responses, my book is more compelling because of it.
I did what good reporters do—I got inside the head of my subject and, in this case, explained how the most powerful man in finance arrived at the place where he shouldn't have been.
But this publication's reviewer, Paul Tice, thinks this is an example of some sort of malfeasance ("Woke CEOs and the Financial Fear Factor," September 15, 2024). He accused me of using "kid glove treatment on Wall Street." I was blown away by that characterization. So was Fink, doubtlessly. (I'm told he doesn't share that view of the book's treatment of him. So too presumably was the reviewer for the Wall Street Journal, who writes, "Mr. Gasparino gives us entertaining (and informative) accounts of corporate blunders in the name of wokeness. ... Among the villains trying to ram ESG down our throats are Larry Fink, the CEO of BlackRock; Jamie Dimon, the CEO of JPMorgan Chase; David Solomon, the CEO of Goldman Sachs..."
I don't know Mr. Tice, but I can use that invention called The Google, and here's what I found. He's a longtime Wall Street money manager. In 2009, BlackRock—yes Larry Fink's BlackRock—purchased the hedge fund he worked at. Mr. Tice remained at BlackRock until 2015. The head of the hedge fund that BlackRock purchased, Rick Rieder, stayed and is now one of the most powerful people at the firm as head of fixed income.
Mr. Tice is now a critic of ESG, which is great, but his background of working at BlackRock, not for a minute, but for six years in a senior capacity, and maybe the circumstances of his departure, should have been disclosed to readers. It wasn't. He was merely described as a member of a think tank who teaches at New York University and wrote a book on ESG. Not a word about working at BlackRock and his experience working for Larry Fink. Yes, good journalism is not only about reporting, but also adding essential context.
Charles Gasparino is a Fox Business Network senior correspondent, New York Post columnist, and author of Go Woke, Go Broke: The Inside Story of the Radicalization of Corporate America.
Paul Tice responds: Rather than questioning my motives and qualifications for reviewing his new book, Charles Gasparino should address the substance of my criticism.
In his book, Gasparino tries to make the case that Wall Street has embraced sustainability because ESG has made firms like BlackRock "uber-wealthy," even though such an argument directly contradicts the premise of his work. As his Go Woke, Go Broke title clearly states, companies that follow progressive environmental and social policies don't outperform financially and often destroy enterprise value, which necessarily means that investment firms cannot achieve better portfolio returns by pursuing ESG investment strategies. Gasparino never acknowledges this core cognitive dissonance in his book.
In trying to make the case, moreover, that ESG has been a huge "moneymaker" for BlackRock—thereby causing every Wall Street competitor to follow suit—he fails to back up his argument with facts. While Gasparino correctly notes that funds carrying a sustainable label can charge higher fees, he ignores the reality that, despite all the hype, ESG funds still comprise a very small minority of assets under management (AUM) across the industry. At BlackRock, sustainable funds (excluding cash management accounts) equated to just 6 percent of total AUM at year-end 2023, with more than half of these comprised of passive ESG funds with skinnier fee structures.
Nonetheless, Gasparino credits almost all the rise in BlackRock's share price over the past two decades to the firm's strategic focus on sustainability. As he writes, "It is no accident that BlackRock's stock price appreciated more than 500 percent since it offered its first ESG fund [in 2005], compared to a 272 percent rise in the S&P." Given BlackRock's transformational acquisition of Barclays Global Investors in 2009 and the protracted zero-interest rate market environment throughout the 2010s, this is a ludicrous statement. It should come as no surprise that a stock like BlackRock's with a beta well above 1.0 would significantly outperform the overall market during an extended bull run.
Gasparino also attributes the sharp swing in BlackRock's AUM over 2022-2023 to changes in its public ESG stance, even though the firm's $1.5 trillion AUM round-trip over these two volatile years was entirely owing to moves in the financial markets. In 2022, when "the stench of ESG … turned off many customers" according to Gasparino, BlackRock still had $307 billion of net fund inflows, dwarfing the roughly $4 billion of capital that was publicly pulled by nine disgruntled red states that year. In 2023, Gasparino asserts that BlackRock's "assets began returning as it moved away from ESG messaging," even though no investment money had left the prior year because of ESG.
Lastly, Gasparino tries to explain BlackRock's sustainability focus by highlighting the pressure placed on the firm by blue state pension fund clients such as the retirement accounts run by New York City Comptroller (and now Democratic mayoral candidate) Brad Lander. While it is true that BlackRock manages money for several progressively minded investors, Gasparino steps on his own line by using bad numbers to embellish the point. Contrary to Gasparino's claim, Lander does not play "a leading role in managing more than $20 trillion in pension money." The actual figure is $264 billion as of year-end 2023, so Gasparino is off by a factor of 75.
The above nuggets provide context for my contention that Gasparino bends over backward in his book to rationalize the ESG behavior of Wall Street firms, although I was being kind when I described his analysis as hyperbole.
But what do I know? I only worked in the financial industry for 40 years. I am no match for the journalism and reporting skills of Charles Gasparino.
Paul Tice is a senior fellow at the National Center for Energy Analytics, an adjunct professor of finance at New York University's Stern School of Business, and author of The Race to Zero: How ESG Investing Will Crater the Global Financial System.