The implications of spite

We need to be talking more about this. We have all too an alarming degree allowed ourselves to get used to the idea that one of our two major political parties has a large contingent, perhaps a plurality, of people who are primarily motivated neither by self-interest nor even ideology but by the desire to punish real and imagined political enemies and to "own the libs."

With that in mind, take a look at this news story which Matt Levine points to in a recent newsletter.

Weeks after a Texas school district dropped UBS Group AG as its municipal-bond underwriter because state Republicans labeled it unfriendly to the oil industry, it’s now demanding the bank cover the costs of having to redo the sale.

The Normangee Independent School District was forced to redo an $18 million bond sale that had already been underwritten by UBS Financial Services after the bank’s parent company in August was added to a list of firms that the GOP state comptroller considers to “boycott” the fossil fuels industry.  

The district is demanding UBS refund it for the costs it incurred after it had to resell the debt as a result. Municipal-bond yields surged dramatically and made it more expensive to reissue the debt. But the school district blames UBS -- not the Republican attorney general’s office that is enforcing the law. In fact, the attorney general’s office is representing the district in its effort to recoup the costs incurred from having to resell the debt, according to a document provided through a public records request.

“NISD resold the bonds and hired a different underwriter, at a loss to NISD,” Lauren Downey, assistant attorney general and public information coordinator, said in the Oct. 12 dated document. “In the event the OAG is unable to successfully negotiate a resolution with UBS, our office anticipates filing suit.”

As Levine puts it.

Most people in the anti-ESG movement will tell you that it is just about maximizing financial returns and avoiding politics. But then you get a case like this where the school district simply incinerates some money to pursue Republican political goals! But they had the nerve to ask the bank for the money back.

But I'm not sure you can really call these "Republican political goals." This law feels more like catharsis for Fox News viewers, lashing out at something that makes them angry. It is not the negligible impact of ESGs (which are often nothing more than blatant greenwashing) that bothers them. The source of the anger is the perception that banks are being nice to liberals.