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BlackRock Owns Stock In 90% Of American Public Companies, So Don’t Blame The Companies


Screenshot via X [Credit: @amuse]

To blame a company for being partially owned by BlackRock is to mistake how modern capital markets function. BlackRock’s business model is built on exchange-traded funds. An ETF is designed to replicate a stock index by owning small shares of nearly every company in that index. This is not a matter of choice in the ordinary sense. If BlackRock manages a fund tracking the S&P 500, it must purchase and hold shares of every company in that index. That means BlackRock owns stock in roughly 85–90% of all public companies in the US, with average stakes of less than 10%. The companies have no say in the matter. They cannot reject BlackRock as a shareholder, nor can they prevent their shares from being included in index-tracking funds. Ownership in this sense is automatic, structural, and unavoidable.

For this reason, when one learns that BlackRock owns shares of a given company, that fact alone says nothing about the virtue or vice of the company itself. The company is no more complicit in BlackRock’s ideology than a grocery store is responsible for the political beliefs of the shoppers who buy milk from its shelves. The company’s board and management do not invite BlackRock in. They simply exist in a marketplace where the largest asset manager in the world happens to be a nearly universal shareholder. Confusing this structural fact with moral culpability is a category mistake.

The real issue lies elsewhere. BlackRock’s influence does not stem from controlling boards or directly managing companies. BlackRock does not, as a rule, take board seats. Its power comes from how it votes its shares. Even a 9% block can swing outcomes in a shareholder vote, particularly in a climate where many proposals hinge on slim margins. When BlackRock aligns its votes across thousands of companies, it can impose a sweeping ideological agenda across the entire economy. This is precisely how ESG, environmental, social, and governance mandates, have been injected into corporate America.

The harm of ESG begins with the nature of the metrics themselves. ESG is not a neutral set of financial criteria. It reflects subjective judgments about environmental policies, social initiatives, and governance structures. A company might be penalized for producing affordable energy from fossil fuels, or for failing to meet arbitrary diversity quotas, regardless of whether those practices maximize shareholder value. This diverts resources from profitability into politically fashionable projects. Instead of focusing on innovation, efficiency, and customer service, companies are pressed to produce reports, hire consultants, and redesign operations to meet ESG targets.

This shift damages shareholders, who are the legal owners of corporations. The fiduciary duty of management is to maximize long-term shareholder value. ESG muddies that duty. By elevating political and social objectives above profit, ESG transforms corporations into vehicles for ideological conformity. Shareholders lose returns, while executives and asset managers gain prestige and influence. The market becomes less about allocating capital efficiently and more about signaling virtue to a class of unelected gatekeepers. That is why state attorneys general, led by Texas Attorney General Ken Paxton and joined by ten other states, filed suit in November 2024 against BlackRock, Vanguard, and State Street. The complaint charges that these asset managers formed an investment cartel, using their combined influence in coal companies to press producers to slash output by more than 50% by 2030 in line with ESG commitments through initiatives like Climate Action 100+ and the Net Zero Asset Managers Initiative. The lawsuit alleges that this collusion created artificial supply constraints, raised coal and electricity prices, and delivered windfall profits to the asset managers, violating federal antitrust statutes like the Sherman and Clayton Acts as well as Texas and other states’ consumer protection and deceptive-trade-practices laws. It also charges deceptive marketing, pointing out that BlackRock promoted some funds as non-ESG while pursuing ESG actions anyway. This legal push is part of a broader anti-ESG campaign, with Texas already pulling billions from BlackRock and placing the firm on and off investment blacklists depending on whether its ESG commitments were rolled back.

Moreover, ESG does not even succeed on its own terms. The metrics are vague and inconsistent. One rating agency may score a company highly for governance while another downgrades it for failing environmental tests. Companies learn to game the system, spending money on glossy sustainability reports rather than real improvements. The result is box-checking, not progress. And because BlackRock owns virtually every company, it has no incentive to consider whether ESG harms an individual firm. If all competitors are equally burdened, the relative market share of each remains unchanged. What is lost is efficiency, competition, and ultimately the prosperity of the US economy as a whole.

Some critics argue that companies could resist, that boards could defy BlackRock’s pressure. But here the mechanics of shareholder democracy matter. A single retail investor holding 0.01% of shares cannot compete with BlackRock’s 9%. Boards pay attention to blocs of that size. To pretend otherwise is to ignore how votes are counted. The tragedy is that companies may well prefer to ignore ESG distractions, but they face the reality that their largest shareholders demand compliance. In this way, BlackRock functions as an unelected regulator, imposing mandates that Congress never approved and voters never endorsed.

The breadth of this power cannot be overstated. As of 2024, BlackRock reported holdings in over 3,400 US-listed companies, out of roughly 3,950 total. This near-universal presence means its voting policies ripple across every sector. Oil and gas firms are pressured to decarbonize, even if doing so reduces profitability. Tech firms are prodded to adopt speech codes, even if doing so alienates customers. Banks are pushed to deny loans to politically disfavored industries, even if the loans would be profitable. In each case, the same story repeats: ESG dictates override market logic.

It is crucial, then, to keep the blame in the right place. The company itself is not evil because BlackRock is a shareholder. ExxonMobil did not invite BlackRock into its ownership structure, any more than Lockheed Martin or Apple did. BlackRock bought its shares because its funds require it to. The company may or may not pursue bad policies, but the mere fact of BlackRock’s ownership is morally inert. The culpability rests with BlackRock’s use of its voting power to advance ESG mandates, not with the companies compelled to live under them.

The lesson for investors, policymakers, and citizens is twofold. First, do not confuse structural ownership with ideological alignment. A company is not guilty by association simply because BlackRock owns a slice of its stock. Second, recognize the true danger of concentrated financial power. When one firm can vote 9% of shares in nearly every public company, it becomes a shadow government, shaping the private sector without the checks and balances of democratic accountability.

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The Fed’s Empty Safety Net: Powell’s Reckless Gamble With US Liquidity Is A Partisan-Tinged Gamble America Cannot Afford


Screenshot via X [Credit: @amuse]

The Federal Reserve’s Reverse Repurchase Agreement (RRP) facility is not a household phrase, yet for years it has quietly functioned as a critical stabilizer for America’s financial system. At its peak in 2022, this overnight cash lot held more than $2.5 trillion, money parked by large institutions in exchange for ultra-safe Treasury collateral, ready to be drawn down during periods of market stress. Today, that cushion has all but vanished. The RRP balance stands at just $57.49 billion, the lowest since 2021. This is not a natural development. It is the result of a conscious policy choice by Fed Chair Jerome Powell, whose refusal to cut interest rates has rendered the facility’s yield uncompetitive, driving liquidity out of the Fed’s reach and into riskier corners of the market.

Understanding why this matters requires a grasp of what the RRP does. It is an overnight agreement in which the Fed borrows cash from big players, money market funds, government-sponsored enterprises, and certain banks, by selling them Treasuries and promising to buy them back the next day with interest. This interest rate sets a floor under short-term funding markets. If the Fed offers 4.25% risk-free, no sensible lender will accept less elsewhere. The RRP also acts as a buffer, absorbing excess liquidity during periods of quantitative easing and releasing it during periods of tightening, so that the brunt of liquidity withdrawal does not immediately slam into bank reserves.

For two years, this tool served as a shock absorber. As the Fed shrank its balance sheet through quantitative tightening, trillions flowed out of RRP rather than out of bank reserves. The ride was smooth because the buffer was deep. Now, with that buffer nearly empty, every additional dollar drained from the system will come directly from bank reserves. In mechanical terms, Powell has taken the suspension system off the car while still barreling down a pothole-ridden road.

Why has the RRP collapsed? The primary reason is that the rate it pays, 4.25%, has been left in the dust by Treasury bill yields, which have drifted higher as the Fed’s policy rate remained elevated and as Treasury supply surged. Money market funds, which once found the RRP attractive, can now earn more by buying short-term Treasuries outright. The choice is obvious, and they have voted with their dollars. Powell’s refusal to cut rates keeps the RRP rate locked well below competitive market yields, ensuring the facility remains a ghost town.

Some will claim this shift is benign, liquidity, they argue, has not vanished from the system but merely migrated. That view is dangerously naïve. The location of liquidity matters. Dollars parked at the Fed are under its direct control and can be injected back into the system instantly. Dollars sitting in private market instruments are slower to mobilize and more exposed to market risk. When stress hits, the Fed will have less dry powder ready for immediate deployment.

The risks are not abstract. Lower bank reserves tighten the credit channel. Banks with thinner reserves are more cautious lenders. They pull back on loans, raise borrowing costs, and become more sensitive to volatility in funding markets. This is precisely the environment in which a credit crunch can germinate. Without the RRP as a stabilizing outlet, short-term interest rates also become more volatile, leaving households and businesses exposed to abrupt swings in borrowing costs.

This fragility is magnified by the current stage of quantitative tightening. When the RRP was flush with cash, the Fed could drain hundreds of billions from the system without touching bank reserves. Now, each dollar of QT lands directly on banks’ balance sheets. This accelerates the approach to the so-called “reserve scarcity” point, beyond which further tightening risks destabilizing funding markets. We saw this movie in 2019, when the Fed’s miscalculation triggered a spike in repo rates and forced an emergency intervention. Powell should have learned that lesson. Instead, he seems intent on repeating it.

The cost of his stubbornness is not confined to abstract market plumbing. It is hammering American families. Mortgage rates above 7% have priced millions out of the housing market. Car loans at historically high rates have put reliable transportation out of reach for many working families. Business credit has grown costlier, slowing investment and job creation. By keeping rates artificially high, Powell is not just draining the RRP; he is draining opportunity from the real economy.

The pain extends to the US government itself. Elevated rates mean Washington is paying tens of billions more in annual interest on the national debt than necessary, money that could otherwise go to infrastructure, defense, or tax relief. In effect, Powell’s policy funnels taxpayer dollars into higher debt service costs, a choice that benefits no one but bondholders.

It is difficult to ignore the political undertone. Not a single economist employed by the Federal Reserve has made a political contribution to a Republican candidate in over 25 years, and almost everyone at the Fed is a staunch Democrat firmly opposed to Trump’s agenda. By holding rates high deep into the first year of President Trump’s second term, Powell’s Fed is creating economic headwinds that act as a de facto rebuke of the administration’s pro-growth agenda. Whether deliberate or not, the effect is the same: a central bank using monetary conditions to undermine the elected government’s policies.

Defenders of Powell’s stance will insist that cutting rates prematurely risks reigniting inflation. But inflation has already cooled from its peak, and the economy is showing signs of slowing. Adjusting the RRP rate and the broader policy rate downward now would support both financial stability and Main Street prosperity. Even a modest cut could restore competitiveness to the RRP, preserve the liquidity buffer, reduce borrowing costs, and ease the fiscal burden on taxpayers.

The remedy is straightforward. Cut rates. Not recklessly, but decisively enough to re-anchor the RRP, restore lending confidence, and give Americans breathing room to buy homes, finance cars, and invest in their futures. Do it now, before a preventable liquidity crunch becomes the next crisis.

A financial system without the RRP cushion is like a jet without landing gear—capable of flying in calm skies, but courting disaster if forced to land.

Powell’s refusal to adjust course is not a display of prudence; it is a partisan-tinged gamble America cannot afford.

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