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income inequality
Big Oil's Post-Trump About Face Proves Corporations Won't Regulate Themselves
The sooner we stop expecting companies like Exxon to be voluntary agents of social change, the sooner we can stop the flow of hypocrisy and greenwashing and start working on resolving the social and environmental crises that blight the lives of billions.
Mar 28, 2026
President Donald Trump has long called global warming a hoax, but his sweeping anti-climate agenda has stunned even many of his supporters. Since returning to the White House, he’s withdrawn the US from the Paris Treaty, rolled back critical greenhouse gas regulations, and opened up millions of acres of previously protected public land for oil and gas drilling.
In response, big oil and gas companies have abandoned, without the slightest resistance, the showy public commitments they had previously made to climate transition. For example, BP has slashed green energy expenditures by 70%, Equinor has cut back its renewable capacity targets by almost 40%, and Chevron has reduced its carbon-reduction capital expenditures to about 5% of its total capital expenditures. None of the world’s 12 largest oil and gas companies plan to decrease fossil fuel production, and all of them project that fossil fuels will continue to overwhelm other sources of energy for the foreseeable future, according to a recent evaluation.
Far from a change of heart, this is simply Big Oil returning to form. The petroleum industry has never been serious about curbing emissions, 90% of which globally come from fossil fuels. Indeed, after decades of investment, renewables still account for a minuscule amount—about 0.13%—of total energy produced by the world’s largest 250 oil and gas companies, according to a recent research paper. “I think the article resolves the debate on whether the fossil fuel industry is honestly engaging with the climate crisis or not,” said the paper’s lead researcher. “Their interest ends with their profits.”
Some oil companies, such as ExxonMobil, continue to promise to reduce emissions to net zero by 2050. This appears to align them with the consensus of climate science that this is necessary globally to limit warming to 1.5°C (2.7°F) above preindustrial levels. However, Exxon is typical in designating a narrow target of greenhouse gases to eliminate: only those from its own operations, mainly pumping and refining oil and gas, and from buying electricity generated by fossil fuels. This conveniently ignores greenhouse gases from the consumption of its gasoline and other petroleum products, as well as those of its suppliers—which exceed by four times the total covered by Exxon’s commitment.
We should have realized that companies, like Exxon, that knowingly act in pursuit of catastrophe cannot be trusted to stop of their own accord.
Exxon wants us to believe that running its pump jacks and refineries on solar and wind power puts it on the side of the climate transition. It’s cynical buffoonery. But it’s also a sign that America’s leaders and electorate have been willfully blind. We should have realized that companies, like Exxon, that knowingly act in pursuit of catastrophe cannot be trusted to stop of their own accord. As Shakespeare might have said, “The fault, dear Brutus, is not in Big Oil but in ourselves.”
The past is prologue. Ever since the advent of industrial capitalism in America in the early 1800s, corporations have consistently served one master, shareholders, delivering them profits by open competition in free markets. From the start, elites have insisted that corporations must regard financial and social objectives as mutually exclusive, even as a single-minded quest for profitability has pushed the system to its breaking point.
We saw the injustice of this belief in the late 19th century, when “robber barons”—who had clawed their way to the top of an unregulated, chaotic economy—justified poverty wages and harsh working conditions by co-opting Charles Darwin’s new theory of evolution, popularized as “survival of the fittest.” Railroad magnate Charles Elliott Perkins—who embodied Social Darwinism by rising from office boy to president of one of the nation’s largest railroads—declared his creed: “That a man is entitled to a living wage is absurd… [If] you take from the strong to give to the weak, you encourage weakness; therefore, let men reap what they and their progenitors sow.”
Early capitalism was marred by periodic, destructive economic downturns. But over time, government acquired fiscal and monetary tools to smooth the boom-and-bust cycles and soften the hard edges of fierce profit seeking through welfare programs, especially during the Progressive Era (1890s-1920) and the New Deal (1933-1938).
However, the bedrock of the corporate mission stayed solid even as the government built new structures on top of it. During the New Deal, for example, leading industrialists joined the American Liberty League to oppose innovations like Social Security. A League leader, echoing his counterpart six decades earlier, proclaimed, “You can’t recover prosperity by seizing the accumulation of the thrifty and distributing it to the thriftless and unlucky.”
The permanent establishment of a taxpayer-funded social safety net in the postwar period only reaffirmed corporations’ unwavering fealty to shareholder value. The president of the mighty Dow Chemical Company, Leland Doan, wrote in 1957: “Any activity labeled ‘social responsibility’ must be judged in terms of whether it is somehow beneficial to the immediate or long-range welfare of the business... I hope we never kid ourselves that we are operating for the public interest per se.”
The corporate community resisted even when the tide of public opinion turned against the malign Jim Crow segregation system in the 1950s and ’60s. When US Steel was accused of workplace discrimination in 1963, prominent academic Andrew Hacker struck back forcefully: “If corporations ought to be doing things they are not now doing—such as hiring Negroes on an equal basis with whites—then it is up to government to tell them so. The only responsibility of corporations is to make profits, thus contributing to a prosperous economic system.”
Predictably, that same decade, the corporate establishment dismissed the emergence of the environmental movement. In 1962, when Rachel Carson’s Silent Spring shocked the nation by exposing the harm to human and animal life posed by the unrestricted use of pesticides, a chemical industry spokesman responded, “If man were to follow the teachings of Miss Carson, we would return to the Dark Ages, and the insects and diseases and vermin would once again inherit the earth.”
Milton Friedman, Nobel Prize-winning economist and chief economic adviser to Ronald Reagan, famously summed up the unchanging corporate consensus in words still widely quoted today: “There is one and only one social responsibility of business—to use its resources and engage in activities designed to increase its profits.”
For the most part, investors have held their noses and counted their gains. But starting almost a century ago, in 1928, when the invention of mutual funds opened up the stock market to the middle class, “ethical” funds, as they came to be known, entered the arena. They were marketed to individuals and families who wanted their portfolios to reflect their values, and to asset managers who wanted their clients to consider them good citizens.
It is folly to ask business to do the work of government.
For a long time, these socially responsible funds were a negligible part of the industry because they typically underperformed the market. These funds used a strategy called negative screening—excluding certain “sin” industries, such as cigarettes, liquor, and weapons. Unfortunately, negative screening typically yields lower returns (sin often pays in the stock market!) and greater price volatility, due to limited diversification. In addition, there is no reason to believe that negative screening has any discernible effect on stock prices, so it has no power to compel corporations to reform.
The answer to this quandary finally came in the early 2000s, in the form of a new stock-picking tool called Environmental, Social, and Governance, or “ESG” for short. The seductive promise of ESG is “doing well by doing good”—or getting rich by investing in companies that make the world better. On the back of this dream, capital invested in accordance with ESG principles has grown monumentally, to as much as $30 trillion, about one-quarter of the global total of assets under management.
ESG claims that adroitly managing environmental and social risks will improve profitability and, therefore, stock prices. But ESG only counts risks that are financially material, ignoring all social or environmental harm for which a company faces no financial penalty. As you might expect, this often bears perverse results. For example, cigarette companies kill their customers—you can’t get more anti-social than that!—but smoking is legal, and Big Tobacco rarely faces liability for cancer from smoking. That is why tobacco companies are sometimes awarded good ESG scores and even appear in some ESG stock funds. Likewise, fossil fuel companies, which have historically made high returns and avoided significant regulatory penalties, appear in 80% of ESG funds.Whether it be alcoholism, gambling addiction, gun deaths, climate change, or other iniquities, the damage that companies inflict on society without literally paying for it—or the negative externalities, as they’re called in economics—entirely escapes ESG’s radar.
Worse, the key assumption of ESG—that adept social risk management translates into higher profitability—is fundamentally unprovable. Many studies have attempted to show a strong positive correlation between specific ESG policies, like emissions reductions or heightened employee benefits, and financial metrics, like cost of debt or return on assets. But, as I explain in my forthcoming book on socially responsible investment, very few succeed. In the end, the research only allows you to draw one conclusion with confidence: that it is simply not possible to precisely define ESG practices at a granular level, measure their direct effect on financial performance, and compare these results validly across different companies.
But that does not stop ESG rating agencies from trying. ESG ratings have grown into a big business, since fund managers pay dearly for them to guide their stock selection. The rating agency reports are typically long, detailed, and quantitative—but completely unreliable. These reports may look sober and professional, like credit rating reports from companies such as S&P Global or Moody’s. But credit rating agencies are analyzing real financial values to assess a tangible corporate quality: its ability to repay its debts. The numbers are verifiable and have a proven relevance to the projected outcome. That is why credit ratings have a 90% correlation; S&P and Moody’s seldom disagree substantially on a company’s rating.
ESG ratings, by contrast, are all over the map, with a correlation of only 40%. Analysts point to three key factors: the rating agencies choose different terms to measure; they measure them with incompatible methods; and they use contradictory methodologies to combine these idiosyncratic measurements into final ratings. These discrepancies build on each other to produce wildly variant final scores. A company denigrated as a dog in ESG terms by one rating agency may be lauded as a star by another.
If ESG is just an illusion, and negative screening a disappointment, how should investors direct their capital to make corporations more socially responsible? The answer is, they shouldn’t bother.
In the game of capitalism, the role of corporations is to make as much money as they can, while playing by the rules. The role of the state, as we learned in the Progressive Era and the New Deal, is to revise the rules periodically to ensure fair play and a socially positive outcome—without hobbling the players. We do want fierce competition, but we don’t want to destroy the playing field in the process.
Today, corporate profits are at their highest proportion of GDP in 50 years, while wages are at their lowest. Overall, income inequality has never been greater, not even in the Gilded Age, the period immediately preceding the Progressive Era, when many toiled in Dickensian poverty while a few, like the Vanderbilt dynasty, flaunted their extravagant and lavish lifestyles. Now, like then, the people, with justification, are losing faith in the system.
Like our Progressive forebears, we will have to revamp capitalism in order to rescue it. Key objectives must include rebuilding organized labor, since what benefits unions benefits the middle class. We’ll also need to break up de facto corporate cartels that stifle competition, squeeze wages, and lower productivity. To counter the existential threat of climate change, we need a cap-and-trade system that makes industry a partner in carbon reduction, not an opponent, and can serve as a model for other public-private partnerships.
It is folly to ask business to do the work of government. The sooner we stop expecting companies like Exxon to be voluntary agents of social change and acknowledge that they are amoral profit machines, the sooner we can stop the flow of hypocrisy and greenwashing and start working on resolving the social and environmental crises that blight the lives of billions. The path to greater corporate social responsibility leads through the voting booth and the statehouse, not through Wall Street and the C-suite.
This piece was originally published by The MIT Press Reader.
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It’s 2025. The AI Revolution Is Destroying the American Dream
The rise of AI will exacerbate income inequality throughout the country, and it’s the government’s duty to step up and take care of its citizens when required.
Nov 07, 2025
In 2019, the New York Times published a series of op-ed columns “from the future,” including one from 2043 urging policymakers to rethink what the American Dream looks like amid an AI revolution.
Well, it’s only 2025, and the American Dream is already in jeopardy of dying because of AI’s impact.
Earlier this year, Anthropic CEO Dario Amodei warned of a “white-collar bloodbath,” which was met with criticism by some of his tech colleagues and competitors. However, we’re already seeing a “bloodbath” come to pass. Amazon is preparing to lay off as many as 30,000 corporate employees, with its senior vice president stating that AI is “enabling companies to innovate much faster.” As it (unsurprisingly) turns out, CEOs across industries share this same sentiment.
We’re seeing the most visible signs of this “bloodbath” at the entry level. Recent graduates are having difficulty finding work in their fields and are taking part-time roles in fast food and retail in order to make ends meet. After being told for years that going to college was the key to being successful, up-and-coming generations are being met with disillusionment.
If Americans can’t reach a decent standard of living now, they’ll be worse off as the AI revolution marches forward.
Despite dire statistics and repeated warnings from researchers and economists alike, people at the decision-making table aren’t listening. White House AI czar David Sacks brushed off fears of mass job displacement this past summer, and adviser Jacob Helberg dismissed the idea that the government has to “hold the hands of every single person getting displaced” by AI.
Unlike the hypothetical 2043, there aren’t people marching in the streets demanding that the government guarantee they’ll still have livelihoods when AI takes their jobs—yet. However, this prediction could easily come true. Life is already unaffordable for the majority of Americans. Add Big Tech’s hoarding of the wealth being created by AI and inconsistent job opportunities, and we could have class warfare on our hands.
OpenAI’s Sam Altman perfectly encapsulated the ignorance of Silicon Valley when he implied that if jobs are replaced by AI, they aren’t “real work.” It’s no surprise that Altman, who has profit margins reaching the billions, doesn’t understand that jobs aren’t just jobs to middle-class families; they are ways for Americans to build their livelihoods, and ultimately, find purpose. Our country—for better or for worse—was built on the idea that anyone could keep their head down, work hard, and achieve the American Dream. If that’s no longer the case, then we must rethink the American Dream itself.
We can’t close the Pandora’s box of AI, nor should we. Advanced AI will bring about positive, transformative change in society if we utilize it correctly. But our policymakers must start taking AI’s impact on our workforce seriously.
That’s not to say there aren’t influential leaders already speaking out. In fact, concerns about AI’s effects on American workers span party lines. Democratic Sen. Chris Murphy wrote a compelling essay arguing in part that there won’t be enough jobs created by advanced AI to replace the lost jobs. Republican Sen. Josh Hawley is pushing the Republican Party to make AI a priority in order to be “a party of working people.” Independent Sen.Bernie Sanders released a report revealing that as many as 100 million jobs could be displaced to AI and proposed a “robot tax” to mitigate the technology’s effects on the labor force—another version of universal basic income (UBI).
Now, I won’t pretend to know the best policy solution that will allow Americans to continue flourishing in the AI era. However, I do know that the rise of AI will exacerbate income inequality throughout the country and that it’s the government’s duty to step up and take care of its citizens when required.
This starts by looking at how we can rebuild our social safety net in an era where Americans do less or go without work altogether. For millions of Americans, healthcare coverage is tied to their employment, as are Social Security benefits. If Americans aren’t employed, then they can’t contribute to their future checks when they’re retired. This leads to questions about the concept of retirement. Will it even exist in the future? Will Americans even be able to find happiness in forced “retirement” without an income and without the purpose provided by work?
It’s easy to spiral here, but you get the point. This is a complicated issue with consequences that we’ll be reckoning with for years to come. But we don’t have that kind of time. If Americans can’t reach a decent standard of living now, they’ll be worse off as the AI revolution marches forward.
It’s 2025, and AI is already transforming the world as we know it. In this economy, we must create a new American Dream that allows Americans to pursue life, liberty, and happiness on their own terms.
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The Corporate Democrats Delivered Donald Trump
Addressing the root of economic systems that oppress Americans is exactly what the Democratic Party leadership, dependent on big corporate donors, has rigorously refused to do. If they continue this refusal, things will only get worse.
Oct 21, 2025
The human condition includes a vast array of unavoidable misfortunes. But what about the preventable ones? Shouldn’t the United States provide for the basic needs of its people?
Such questions get distinctly short shrift in the dominant political narratives. When someone can’t make ends meet and suffers dire consequences, the mainstream default is to see a failing individual rather than a failing system. Even when elected leaders decry inequity, they typically do more to mystify than clarify what has caused it.
While “income inequality” is now a familiar phrase, media coverage and political rhetoric routinely disconnect victims from their victimizers. Human-interest stories and speechifying might lament or deplore common predicaments, but their storylines rarely connect the destructive effects of economic insecurity with how corporate power plunders social resources and fleeces the working class. Yet the results are extremely far-reaching.
“We have the highest rate of childhood poverty and senior poverty of any major country on earth,” Senator Bernie Sanders has pointed out. “You got half of older workers have nothing in the bank as they face retirement. You got a quarter of our seniors trying to get by on $15,000 a year or less.”
Such hardship exists in tandem with ever-greater opulence for the few, including this country’s 800 billionaires. But standard white noise mostly drowns out how government policies and the overall economic system keep enriching the already rich at the expense of people with scant resources.
This year, while Donald Trump and Republican legislators have been boosting oligarchy and slashing enormous holes in the social safety net, Democratic leaders have seemed remarkably uninterested in breaking away from the policy approaches that ended up losing their party the allegiance of so many working-class voters. Those corporate-friendly approaches set the stage for Trump’s faux “populism” as an imagined solution to the discontent that the corporatism of the Democrats had helped usher in.
While offering a rollback to pre-Trump-2.0 policies, the current Democratic leadership hardly conveys any orientation that could credibly relieve the economic distress of so many Americans. The party remains in a debilitating rut, refusing to truly challenge the runaway power of corporate capitalism that has caused ever-widening income inequality.
“Opportunity” as a Killer Ideology
The Democratic Party establishment now denounces President Trump’s vicious assaults on vital departments and social programs. Unfortunately, three decades ago it cleared a path that led toward the likes of the DOGE wrecking crew. A clarion call in that direction came from President Bill Clinton when, in his 1996 State of the Union address, he exulted that “the era of big government is over.”
Clinton followed those instantly iconic words by adding, “We cannot go back to the time when our citizens were left to fend for themselves.” Like the horse he rode into Washington — the Democratic Leadership Council (DLC), which he cofounded — Clinton advocated a “third way,” distinct from both liberal Democrats and Republican conservatives. But when his speech called for “self-reliance and teamwork” — and when, on countless occasions throughout the 1990s he invoked the buzzwords “opportunity” and “responsibility” — he was firing from a New Democrat arsenal that all too sadly targeted “handouts” and “special interests” as obsolete relics of the 1930s New Deal and the 1960s Great Society.
The seminal Clintonian theme of “opportunity” — with little regard for outcome — aimed at a wide political audience. In the actual United States, however, touting opportunity as central to solving the problems of inequity obscured the huge disparities in real-life options. In theory, everyone was to have a reasonable chance; in practice, opportunity was then (and remains) badly skewed by economic status and race, beginning as early as the womb. In a society so stratified by class, “opportunity” as the holy grail of social policy ultimately leaves outcomes to the untender mercies of the market.
Two weeks before Clinton won the presidency, the newsweekly Time reported that his “economic vision” was “perhaps best described as a call for a We decade; not the old I-am-my-brother’s-keeper brand of traditional Democratic liberalism.” Four weeks later, the magazine showered the president-elect with praise: “Clinton’s willingness to move beyond some of the old-time Democratic religion is auspicious. He has spoken eloquently of the need to redefine liberalism: the language of entitlements and rights and special-interest demands, he says, must give way to talk of responsibilities and duties.”
Clinton and the DLC insisted that government should smooth the way for maximum participation in the business of business. While venerating the market, the New Democrats were openly antagonistic toward labor unions and those they dubbed “special interests,” such as feminists, civil-rights activists, environmentalists, and others who needed to be shunted aside to fulfill the New Democrat agenda, which included innovations like “public-private partnerships,” “empowerment zones,” and charter schools.
Taking the Government to Market
While disparaging advocates for the marginalized as impediments to winning the votes of white “moderates,” the New Democrats tightly embraced corporate America. I still have a page I tore out of Time magazine in December 1996, weeks after Clinton won reelection. The headline said: “Ex-Investment Bankers and Lawyers Form Clinton’s Economic Team. Surprise! It’s Pro-Wall Street.”
That was the year when Clinton and his allies achieved a longtime goal — strict time limits for poor women to receive government assistance. “From welfare to work” became a mantra. Aid to Families with Dependent Children was out and Temporary Assistance for Needy Families was in. As occurred three years earlier when he was able to push NAFTA through Congress only because of overwhelming Republican support, Democratic lawmakers were divided and Clinton came to rely on overwhelming GOP support to make “welfare reform” possible.
The welfare bill that he gleefully signed in August 1996 was the flip side of his elite economic team’s priorities. The victims of “welfare reform” would soon become all too obvious, while their victimizers would remain obscured in the smoke blown by cheerleading government officials, corporate-backed think tanks, and mainstream journalists. When Clinton proclaimed that such landmark legislation marked the end of “welfare as we know it,” he was hailing the triumph of a messaging siege that had raged for decades.
Across much of the country’s media spectrum, prominent pundits had long been hammering away at “entitlements,” indignantly claiming that welfare recipients, disproportionately people of color, were sponging off government largesse. The theme was a specialty of conservative columnists like Charles Krauthammer, John Leo, and George Will (who warned in November 1993 that the nation’s “rising illegitimacy rate… may make America unrecognizable”). But some commentators who weren’t right-wing made similar arguments, while ardently defaming the poor.
Newsweek star writer Joe Klein often accused inner-city Black people of such defects as “dependency” and “pathology.” Three months after Clinton became president, Klein wrote that “out-of-wedlock births to teenagers are at the heart of the nexus of pathologies that define the underclass.” The next year, he intensified his barrage. In August 1994, under the headline “The Problem Isn’t the Absence of Jobs, But the Culture of Poverty,” he peppered his piece with phrases like “welfare dependency,” while condemning “irresponsible, antisocial behavior that has its roots in the perverse incentives of the welfare system.”
Such punditry was unconcerned with the reality that, even if they could find and retain employment while struggling to raise families, what awaited the large majority of the women being kicked off welfare were dead-end jobs at very low wages.
A Small Business Shell Game
During the 1990s, Bill and Hillary Clinton fervently mapped out paths for poor women that would ostensibly make private enterprise the central solution to poverty. A favorite theme was the enticing (and facile) notion that people could rise above poverty by becoming entrepreneurs.
Along with many speeches by the Clintons, some federal funds were devoted to programs to help lenders offer microcredit so that low-income people could start small enterprises. Theoretically, the result would be both well-earning livelihoods and self-respect for people who had pulled themselves out of poverty. Of course, some individual success stories became grist for upbeat media features. But as the years went by, the overall picture would distinctly be one of failure.
In 2025, politicians continue to laud small business ventures as if they could somehow remedy economic ills. But such endeavors aren’t likely to bring long-term financial stability, especially for people with little start-up money to begin with. Current figures indicate that one-fifth of all new small businesses fail within the first year and the closure rate only continues to climb after that. Fifty percent of small businesses fail within five years and 65 percent within 10 years.
Promoting the private sector as the solution to social inequities inevitably depletes the public sector and its capacity to effectively serve the public good. Three decades after the Clinton presidency succeeded in blinkering the Democratic vision of what economic justice might look like, the party’s leaders are still restrained by assumptions that guarantee vast economic injustice — to the benefit of those with vast wealth.
“Structural problems require structural solutions,” Bernie Sanders wrote in a 2019 op-ed piece, “and promises of mere ‘access’ have never guaranteed black Americans equality in this country… ‘Access’ to health care is an empty promise when you can’t afford high premiums, co-pays or deductibles. And an ‘opportunity’ for an equal education is an opportunity in name only when you can’t afford to live in a good school district or to pay college tuition. Jobs, health care, criminal justice and education are linked, and progress will not be made unless we address the economic systems that oppress Americans at their root.”
But addressing the root of economic systems that oppress Americans is exactly what the Democratic Party leadership, dependent on big corporate donors, has rigorously refused to do. Looking ahead, unless Democrats can really put up a fight against the pseudo-populism of the rapacious and fascistic Trump regime, they are unlikely to regain the support of the working-class voters who deserted them in last year’s election.
During this month’s federal government shutdown, Republicans were ruthlessly insistent on worsening inequalities in the name of breaking or shaking up the system. Democrats fought tenaciously to defend Obamacare and a health-care status quo that still leaves tens of millions uninsured or underinsured, while medical bills remain a common worry and many people go without the care they need.
“We must start by challenging the faith that public policy, private philanthropy, and the culture at large has placed in the market to accomplish humanitarian goals,” historian Lily Geismer has written in her insightful and deeply researched book Left Behind. “We cannot begin to seek suitable and sustainable alternatives until we understand how deep that belief runs and how detrimental its consequences are.”
The admonitions in Geismer’s book, published three years ago, cogently apply to the present and future. “The best way to solve the vexing problems of poverty, racism, and disinvestment is not by providing market-based microsolutions,” she pointed out. “Macroproblems need macrosolutions. It is time to stop trying to make the market do good. It is time to stop trying to fuse the functions of the federal government with the private sector… It is the government that should be providing well-paying jobs, quality schools, universal childcare and health care, affordable housing, and protections against surveillance and brutality from law enforcement.”
Although such policies now seem a long way off, clearly articulating the goals is a crucial part of the struggle to achieve them. Those who suffer from the economic power structure are victims of a massively cruel system, being made steadily crueler by the presidency of Donald Trump. But progress is possible with clarity about how the system truly works and the victimizers who benefit from it.
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