Robert Owen (L) circa 1910, and Carter Glass (R) circa 1919. (Library of Congress/The World’s Work)
To put it mildly, the Federal Reserve System had, and has, plenty of critics, and yet in its 108-year history, nobody has come up with a better replacement model.
Indeed, we can say that one inarguable strength of the Fed is that it is decentralized. Another name, of course, for decentralization is federalism. And there’s Madisonian genius there: to make American institutions representative of, and accountable to, all of America, including its regions and states.
Yet any good idea, including federalism, needs to be tweaked from time to time. And that’s the case today, as unfortunately, the greatest power at the Fed has been allowed to cluster in just one of its dozen districts, New York. Why is that? Because New York is where the money is. For instance, Manhattan is home to BlackRock, the $9 trillion investment behemoth.
Larry Fink, Chairman and CEO of BlackRock Inc., speaks at the annual meeting of the World Economic Forum in Davos, Switzerland, on January 20, 2017. (AP Photo/Michel Euler)
In the meantime in Georgia itself, left-wing activists are cheering on the national pressure. Here, for instance, is Stacey Abrams telling the New York Times that woke companies should keep up the pressure: “Companies don’t exist in a vacuum. It’s going to take a national response by corporations to stop what happened in Georgia from happening in other states.”
We might pause over that telling phrase from Abrams: “national response.” For sure, the left is counting on BlackRock & Co. to keep pressuring Georgia until it caves.
Interestingly, Abrams seems to have since concluded that she herself is at risk, politically, if Georgians blame her for that “national response.” Eyeing her own likely second bid for the governorship of Georgia, Abrams is now saying that companies should not boycott, but rather, “stay and fight.” In other words, Abrams wants to have it both ways: She has summoned that “national response,” and she wants to avoid blame for damaging her state’s economy.
So what, in the meantime, should Republicans do? Here’s one answer: Pass a new law or at least update an old law. That is, update the Federal Reserve Act such that applies to 21st-century concerns about geographic diversity, just as much as it applied to the 20th-century concerns of Glass and Owen. We can recall that the law was written back in 1913 to guarantee geographic decentralization—to stop, say, New York City from dictating to the rest of the country. That was a good idea then, and it’s a good idea now.
Moreover, the Act was written to help stabilize the financial system, protecting it from wild swings. In their day, Owen and Glass were thinking mostly about insulating the nation from economic panics, and yet we can see that their wisdom—make sure power is distributed—also provides a potential insulation against woke moral panics. If the wokesters are seeking to dictate from New York City (including, of course, corporate media), then it’s best to compartmentalize, insulating the rest of the country from hysterical lefty financial pressure.
And so now today, if that insulation has worn thin, then maybe we need a revised law to rebuild the insulating safeguards.
Rallying the Red States
Fortunately, Republicans are now pushing back hard against the wokesters. It’s not surprising that Georgia Republicans, such as Rep. Buddy Carter, have taken a strong stand against the boycotters. Nor is it a shock that Sen. Rand Paul (R-KY) is out front. However, it was an eyebrow-raiser when, on April 5, Senate Minority Leader Mitch McConnell issued an extraordinary statement denouncing corporate wokeism:
Our private sector must stop taking cues from the Outrage-Industrial Complex. From election law to environmentalism to radical social agendas to the Second Amendment, parts of the private sector keep dabbling in behaving like a woke parallel government.
With these sharp words, McConnell–always even-keeled and usually pro-business–was putting the woke corporatists on warning.
So what specific actions could the powerful Kentuckian ask the Senate to take to restrain woke capitalism? For one thing, he might look to the Federal Reserve, which has enormous sway over the operations of banks and financial institutions. If BlackRock’s Fink, for instance, knew that Federal Reserve officials were scrutinizing his actions—that is, if regulators were mindful of their mandate to protect the integrity and autonomy of each of the dozen Fed regions—he would be less eager to issue demands from atop his Manhattan high-rise.
Unfortunately, McConnell is not in a great position, right now, to apply such pressure on the Fed—let alone to enact new legislation. Why? Because Democrats won last year, and earlier this year as well, when too many conservatives didn’t bother to vote.
Yet if Americans grow angry at the attempted rule by the woken–and a new poll verifies that anger–then GOP fortunes could change in 2022 and 2024. And if so, then Republicans could write in new protections for the states if they are threatened by hegemonic woke capital.
That is, today’s GOP could build on the federalist vision of Owen and Glass–who, after all, represented areas that are now solidly Republican–updating that vision for the 21st century. A new law–or a new and stricter interpretation of existing law–could make it plain that the Fed looks askance at Big Money muscling corporations to advance exotic social goals.
And that’s just a start.
There are plenty of other actions that the GOP could take, all of which would remind the Manhattan moguls that not every American sees things the way they do–and that all Americans, and the states in which they live, have rights that should be honored and safeguarded.
For instance, to further defend Georgia, more Republicans could join Sen. Josh Hawley of Missouri, who has long demanded that the federal government enforce the Sherman Anti-Trust Act of 1890. That venerable law, which was the hammer that broke up Rockefeller’s Standard Oil in 1911, has been amended and updated many times over the last 13 decades, and yet the principle point of the statute–restraint of trade is illegal–is as true and valid as ever. And that’s exactly what the wokesters are doing: restraining trade. Indeed, just about every day now, the elites are actively bragging about their activities, taking credit with the MSM; hence a typical headline: “Hundreds of Companies, CEOs Band Together on Voting Access.” We might pause over that wording: “band together.” Does that suggest collusion?
On April 13, Sen. Hawley joined with Sens. Ted Cruz (R-TX) and Mike Lee (R-UT) to propose legislation that would undo Major League Baseball’s antitrust exemption. In addition, it’s worth noting that it’s not just the feds that can file antitrust suits; the states can, and so can private individuals.
Also, Republicans could demand that the feds enforce laws against punitive boycotts, since boycotts are the weapon of choice for the wokesters. Anti-boycott laws are little known today, but they are still on the books and could be revived.
In addition, the GOP could look to the many federal laws requiring that corporate executives look first to their fiduciary duty to shareholders; that is, executives are in violation of the law if they purposefully do things in bad faith that cost shareholders money. For starters, it’s obvious that cancelling the Atlanta All-Star Game on short notice is going to be costly for Major League Baseball; all those broken contracts must be paid off, and new contracts for Denver to be written on short notice. That right there is an an obvious abrogation of fiduciary duty.
Yet for the time being, states under attack will have to defend themselves without help from Washington; as we know, the Biden administration is actively with the wokesters.
So for now, the red states are going to be tested: Can they hang together? As we have seen, Georgia, led by Gov. Brian Kemp, needs help right now. Fortunately, Gov. Greg Abbott of Texas is already helping; Breitbart News reported on April 5 that in response to baseball’s pulling the All-Star Game from Georgia, the Texas chief executive is refusing to have anything to do with Major League Baseball, including throwing out the ceremonial first pitch for the Rangers’ home opener in Dallas. And on April 6, Abbott said on Fox News that corporations should “stay out of politics, especially when they have no clue what they’re talking about.”
Texas Governor Greg Abbott (L) and Georgia Governor Brian Kemp (R). (Drew Anthony Smith/Getty Images; Megan Varner/Getty Images)
Given that Texas has not just one, but two MLB teams, that’s a gutsy move by Abbott. And so Republicans and conservatives—in Texas and everywhere else—should be applauding Abbott.
Hopefully, other Republican governors, including those with major-league sports teams in their states, will join in to defend their brethren in Georgia and Texas.
Indeed, perhaps conservatives in all the states should convene to map out a coordinated response to the relentless attacks of the woken. That’s what’s needed: A red-state bloc to demand the protection of decentralized federalist principles to check the woke power flowing out of New York City, as well as other blue dots.
If such a red bloc could be established, the shades of Robert Owen and Carter Glass would love it. In their time, they built their careers around the proposition that the whole country matters, not just its financialist elite. And so today, such a red-state alliance—the threatened states hanging together—would be a righteous vindication of their federalist vision.
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