President Trump’s promises to cut taxes, reduce regulations, and promote “America First” economic policies excite many who think economic growth will result. Unfortunately, that agenda could be undermined by judges who pursue politics instead of calling balls and strikes from the bench.
That’s what Texas District Court Judge Reed O’Connor did when he ruled that American Airlines violated its fiduciary duty by including BlackRock-managed funds in its 401(k) plan, given the asset manager’s broader corporate engagement with environmental, social, and governance (ESG) issues. While many conservatives oppose ESG, this case had nothing to do with it because no such funds were involved in American’s decision. O’Connor’s ruling assumes American Airlines is guilty because it dared associate with a company that has practices O’Connor doesn’t like.
This means that businesses can be penalized not just for their direct actions but for the perceived intentions or broader activities of their partners and service providers. This could lead to increased litigation risk and uncertainty for all businesses because the ruling seems to depart from legal and financial prudence, undercutting established investment practices and the ability for employers to sponsor retirement plans with the best fund choices for their employees’ needs.
Furthermore, the ruling inadvertently undermines American’s workforce efforts to prepare for a financially secure retirement. The decision casts doubt on the ability to use low-cost index funds and other popular types of funds in 401(k) plans, potentially limiting the options available to plan fiduciaries in seeking the best returns for retirees. This affects not only large corporations like American Airlines but also small businesses that manage their retirement plans under the same legal principles.
Looking at the macroeconomic picture, reigniting the American economy hinges on the stability and growth of business. Businesses are the backbone of our economy, responsible for employment and innovation. And 401(k)s are essential to Americans’ financial security. Yet, rulings like this could stifle their recovery and growth by creating an atmosphere of fear and uncertainty around investment and partnership decisions. Imagine if no one had access to a 401(k) at work because of the liability it puts on employers. At a time when we should be encouraging robust economic recovery and innovation, such decisions serve only to hinder our financial security.
The reality is that O’Connor’s ruling ignores the myriad investor protections already in federal law and regulation, including those that stem from the fiduciary duty requirements under the Employee Retirement Income Security Act of 1974 and regulations of the Securities and Exchange Commission. They have been crucial in safeguarding American investors for more than 50 years.
Policymakers and the legal community must consider the broader economic effects of judges, regardless of their preferred politics. Conservatives should question why O’Connor put his politics ahead of a consistent, predictable regulatory environment that will unleash economic growth and opportunity. Our future prosperity depends on it.
Michael Feuz is a technology consultant by day and a research associate for a small D.C. think tank by night. He is pursuing graduate work in economics at George Mason University. He wrote this for InsideSources.com.
Reprinted with permission from DC Journal – By Michael Feuz
The opinions expressed by columnists are their own and do not necessarily represent the views of AMAC or AMAC Action.
I’m SICK of these liberal America-last judges!!! They need to be held accountable, and I would love to see President Trump shrug their rulings aside and push forward with his MAGA agenda.
People who don’t agree with the judge should first do 2 things. 1) Find out who the author of this article is. Most of the think tanks in this country are populated with leftists Democrats.Where is his money invested? Who funds his think tank? Because 2) BlackRock is ultra left, has been manipulating corporations, and buy up housing at inflated prices driving up the cost of housing (which also drives up the property taxes) and making it almost impossible for everyday Americans to afford. This causes chaos in the housing market as well as increasing rents. Do the research.
seems more and more judges use political leanings or profits to themselves or famiiy members. Please return to the constitution and support actual law not your personal desires
“Democrats” like to control others, and their “thought police” attitude is as old as their party. Too bad their collective ego is so much bigger than their intellect.
The remark I stand to corrected, President Trump over come left or liberal judges to make America great again
Let me guess, a liberal judge that is anti-American. I wonder who and how much he was paid to make that decision.
The rabid demonrats will never stop fighting President Trump in every way they can possibly find.
They are going to all burn in Hell for the treason they have are still committing against America.
I hope President Trump just over rules the corrupt judge’s decision.
Judges should not be allowed to vote, that way they can’t truly be bought off by lobbyists.
I ask you since when does these fake judges manage the country in place of the President
This another area where liberal Judges that is trying to delay President Trumps Agenda with help of Elon Musk! Pray that it can be done!
The big investment funds of which Black Rock is probably the biggest, need to be investigated for illegally influencing company policies of the companies they invest in. BlackRock, etc. control a vast number of proxy votes in most American shareholder owned companies and are most likely the reason those companies embrace woke policies.
If Judges interfere, they should be immediately removed. Our economic recovery is more important than their liberal agenda. They are ruling based on political biases not the rule of law. This is grounds for removal. Stop dragging your feet dump them all from the top down.
Any judge who allows his political views to overrule his Constitutional rulings should be disbarred and immediately removed from the bench. The Constitution is the guide, not their political bias and BS. It’s way past time to start holding people accountable for trying to ruin our Country and whizz on our Citizens.
Michael,
While in BBC a general since I agree that the judicial system is wrought with politically appointed judges who fail to meet the direction a judge is supposed to follow once appointed and instead insert their personal opinions I disagree with you about Black Rock. There are plenty of funds that manage better for less fees than Black Rock. The whole management message is one of DEI and woke behavior which in not the mission of an investment company and its board. The first amendment to our Constitution takes card of protection of all citizens rights and we don’t need large corporations ramming their personal beliefs down our throats.
There are activist judges on the Wisconsin Supreme court and in the Dem voting counties throughout the State. They need to be replaced with constitutional judges. How to do that, I do not know, but we all suffer because of them.