Andy Puzder writes about the red-state response to ESG:
Resistance to environmental, social, and corporate governance (ESG) investing is taking center stage in a number of Republican-leaning state legislative sessions this year. The question is how red states can prevent asset managers from investing their states’ funds — or exercising shareholder rights (such as proxy voting) — to advance ESG-related political and social goals rather than maximizing returns for beneficiaries.
There are currently two, similar pieces of model legislation designed for states to achieve this goal — the American Legislative Exchange Council’s (ALEC) State Government Employee Retirement Protection Act, and the Heritage Foundation’s State Pension Fiduciary Duty Act. To date, legislators in six states have introduced fiduciary-duty legislation, and at least as many more are expected to do so soon.
John Greenwood and Steve Hanke write about the Fed:
In the nine months before last September, the Fed forked out $76 billion to the U.S. Treasury. That came to an abrupt halt in September, when the Fed’s cost of operations started to outstrip its earnings. Since then, Federal Reserve banks have racked up an estimated $18.8 billion in losses and have suspended remittances to the U.S. Treasury.
The Fed is realizing losses because it is paying out 4.4 percent interest on reserve balances of $3 trillion and 4.3 percent interest on reverse repurchases of $2.5 trillion, but yields on long-term Treasury securities held on its balance sheet are substantially lower. If that’s not bad enough, these losses are likely to become even larger, at least in the near future. This means that the Fed won’t be laying any more golden eggs for the Treasury in 2023.