Conspiracy theories suggesting that a few numbers of the most powerful individuals and organizations are controlling the economy and the nation as a whole are becoming increasingly prevalent as American firms grow and the government and its budget increase. Although it’s simple to brush these worries aside as hoaxes, crony capitalism and political corruption do exist to some extent.
The idea that BlackRock Inc. (ticker: BLK), Vanguard, and State Street Corp. (STT), three formidable financial corporations, control an absurdly large portion of the U.S. stock market, is one of the most widespread allegations that have been making the rounds on social media in recent years.
The largest shareholders in 88 percent of S&P 500 companies, according to research, are BlackRock, State Street, and Vanguard combined. In a 2017 research document, authors claim that the businesses have significant voting power over shareholders because of their permanent and illiquid holdings, which benefits them at the expense of passive index investors.
BlackRock, State Street, and Vanguard, the “Big Three” investment corporations, are “arguably the most powerful cartel in human history,” according to a post made by the GOP presidential longshot on X last year. “They’re the largest shareholders of nearly every major public company (even of each other).”
“And they impose ESG agendas on business boards by using *your* money to vote in favor of “racial equality audits” and “Scope 3 emissions restrictions,” which don’t serve your best financial interests. There are major conflicts of interest, antitrust, and fiduciary issues with this,” he said.
The ‘Big Three’ were reportedly using a “millennial marketing strategy,” according to research, which may enable them to amass “trillions of dollars of assets under management without having to become informed.”
When it comes to corporate governance concerns, these three large fund managers “control” a big chunk of the passive fund industry. They also cast their votes on behalf of investors. Vanguard funds are estimated by ETF.com to account for 30.1% of the whole market for equities ETFs as of February 2024, while BlackRock accounts for the remaining 29.4%. With a share of 14.8%, State Street is a distant third. Put otherwise, the aggregate market share of the major three’s funds represents 74.3% of the equities ETF market.
US Senator Bernie Sanders issued a warning, stating that democracy is in danger because to these three’s degree of influence.
Sanders stated in a tweet regarding X, “This is what oligarchy is about.” Only three Wall Street companies currently handle $20.7 trillion in assets: State Street, BlackRock, and Vanguard. With the current concentration of political and economic power, democracy will not survive.”
Robert F. Kennedy Jr. garnered a lot of attention when he expressed his worries about large businesses contributing to the housing crisis and lowering young Americans’ prospects of purchasing an affordable house in an interview on The Breakfast Radio.
“It’s actually one massive organization since BlackRock, State Street, and Vanguard are three enormous firms that jointly own each other. They currently own everything, and since they have made the decision to purchase every single-family home in America, if they continue on their current course, they will own 60% of all single-family homes in the nation by 2030. RFK Jr. stated, “They really are trying to buy everything.”
Given that Sander’s statements are consistent with Robert’s, greater focus must be placed on the degree of influence and power that these corporations possess.