‘Go Woke, Go Broke’ Review: The Worst Investments

Charles Gasparino is a gladiatorial journalist. When he steps into the arena to fight a money-man or enterprise that he believes is anticapitalist or crooked, he can be brutal. Making an enemy of him is not for the faint-hearted: Watch him trade insults with his critics on social media. He was once a Wall Street reporter for this newspaper, where editors and colleagues remember him for his no-holds-barred style. Which is precisely how we’d describe the approach in “Go Woke, Go Broke,” Mr. Gasparino’s blistering account of “how corporate America became something close to a foot soldier in the progressive movement.” Now a senior correspondent at the Fox Business Network, Mr. Gasparino is also a columnist at the New York Post, whose irreverent, indignant (and often irresistible) tabloid style is very much in evidence here. (Fox, the Post and the Journal share common ownership.)

“Go Woke, Go Broke” is a takedown of “corporate wokeness,” which Mr. Gasparino describes as the “noxious ideology of progressive politics in the boardroom”—an ideology, he says, that “needs to die a thousand deaths.” The book can be seen as a demotic complement to “Woke, Inc.” (2021), by the brainy (and sometimes tiresome) former Republican presidential contender Vivek Ramaswamy. Mr. Gasparino’s is the better book for its plainspokenness: Many more Middle Americans—whose jobs have been outsourced or have been imperiled by the high-minded dictates of “diversity”—will grasp its message. These are the people who, Mr. Gasparino argues, have been shafted by the Wall Street “fat cats” who’ve grown “much fatter” by their “feeding at the ESG trough.”

ESG stands for “environmental, social, and governance”—metrics intended to direct or funnel investment in an ostensibly socially responsible direction. Mr. Gasparino is a populist-capitalist, and ESG is his bête noire, along with “diversity, equity, and inclusion” (DEI). These “leftist shibboleths” have, the author says, “warped” American business practices for nearly two decades and grew in intensity under the second Obama administration.

Mr. Gasparino traces the roots of ESG to the 1980s and ’90s, when business leaders began embracing so-called corporate social responsibility (or CSR, in its now archaic abbreviation). CSR, in time, evolved into bien-pensant notions of stakeholder capitalism, championed by the likes of Klaus Schwab, the founder of the World Economic Forum in Davos, Switzerland. Davos Man, writes Mr. Gasparino, “represents the ultimate marriage of the progressive globalist corporate citizen with the globalist progressive regulatory bureaucrat.”

All this performatively moral investing is a revolt against Milton Friedman, the economist who in 1970 stated that “the social responsibility of business is to increase its profits.” Friedman, writes Mr. Gasparino, would have hated ESG and DEI, “among the most heinously anti-American management philosophies ever developed.” (Readers of Mr. Gasparino’s robust book will realize pretty quickly that nuance is for wimps.)

Basing his book largely on a host of interviews with “company insiders,” Mr. Gasparino gives us entertaining (and informative) accounts of corporate blunders in the name of wokeness. He reminds us of the time AB InBev—the holding company for Anheuser-Busch and its beer, Budweiser—thought it would be a great idea to use a “transwoman influencer” named Dylan Mulvaney to market its top-selling Bud Light. Middle America revolted and stopped buying the beer, heretofore branded as a manly beverage. Mr. Gasparino also recounts how the discount retailer Target was punished by consumers for promoting “tuck-friendly bathing suits for men transitioning to women” alongside rainbow-colored onesies for toddlers. And Disney, recalls the author, erred politically and financially when its chief executive, Bob Chapek, embarked on a bruising battle with Florida’s Gov. Ron DeSantis and challenged the validity of a state law barring public schools from teaching sexual education to children before the fourth grade. In each case, the company’s stock price tanked and sales plummeted.

It enrages Mr. Gasparino that America’s corporate management luxuriates “in progressive causes as a side hustle.” But in some cases, he tells us, these causes are the main course. 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; and the “ESG-obsessed” Gary Gensler, President Biden’s chairman of the Securities and Exchange Commission, whom Mr. Gasparino describes as “a male version” of Sen. Elizabeth Warren, “among the most woke, annoying, and . . . dangerous bureaucrats in government.” Add to the list Adena Friedman, the CEO of Nasdaq, which demands that companies seeking to list on its exchange disclose board-level diversity statistics and, if the need arises, explain why they don’t have a diversity of directors. Such demands aren’t, of course, slapped on Chinese companies, which are, Mr. Gasparino points out, curiously exempt from all the wokest rules. When was the last time a Chinese company was asked why it didn’t have a Uyghur on its board, or an LGBTQ+ person?

Attacking Larry Fink as “Mr. ESG,” says Mr. Gasparino, has become “a rallying cry on the populist right,” whose backlash against corporate wokeness has been so fierce that even BlackRock has started to dismount from its moral high horse. Consumers’ Research, a conservative advocacy group pushing back against ESG, derides the abbreviation as “elitists, socialists, and grifters,” as well as “erasing savings and growth”—pungent and effective put-downs. More and more investors are aware that ESG-specific funds are expensive and rarely beat the market. In fact, writes Mr. Gasparino, “they’re some of the worst investments,” even as they make it harder to tackle inflation by forcing curbs on fossil fuels. But Middle America appears to have woken up to the perils of ESG and is giving voice to its displeasure. “It’s now their Arab Spring,” says Mr. Gasparino. This may be hyperbolic overreach, even for the crusading Mr. Gasparino, but he’s confident that America’s version of a grassroots people’s revolt will end better than the one in the Middle East. Let’s pray he’s right.

Mr. Varadarajan, a Journal contributor, is a fellow at the American Enterprise Institute and at Columbia University’s Center on Capitalism and Society.