By: Mark Glennon*
It was only a matter of time.
Left-leaning states, particularly Illinois, have long been trying to strong-arm the financial sector into enforcing their social justice agenda. Now, more conservative states are responding by using the same tool. Nobody will end up winning. Blame those who started it.
Financial officers from 15 states sent a letter last week to the banking industry threatening to take “collective action” against banks that disfavor the fossil fuel industry. “We have a compelling government interest, when acting as participants in the financial services market on behalf of our respective states, to select financial institutions that are not engaged in tactics to harm the very people whose money they are handling,” the letter stated. West Virginia Treasurer Riley Moore, one of those signing, called it “woke capitalism.
On the opposite side, Illinois has long been at the forefront of threatening to pull funds from financial institutions that it doesn’t like for political reasons, particularly in the office of Treasurer Michael Frerichs. The state’s message, often conveyed jointly with left-leaning states, has been that financial institutions better get in line with the left’s social justice goals, including opposition to fossil fuels, or expect no business from them.
We have documented that misguided effort by Illinois extensively. Read the columns listed below. In fact, the most recent effort by Democrats was a threatening letter much like the new one by Republicans, sent to much the same list of big financial institutions. Specifically, Illinois Treasurer Michael Frerichs and a group of 29 other state financial officials earlier this year sent a letter to six of the nation’s largest private sector money managers in a transparently partisan attempt to bully them out of supporting Republicans.
Nobody should be surprised that Republican states are responding in-kind. Their retaliation is entirely appropriate as a counterbalance, but the unfortunate net result is a race to the bottom in which taxpayers suffer.
Taxpayers’ money should be invested to maximize returns. Period, full stop. Distorting that goal with the political passions de jeur is a quagmire. Banks receiving the letter now face conflicting demands. States like Illinois and financial officials like Frerichs should have seen this coming. Moreover, they should know that their opponents, Republicans, dominate far more state governments than Democrats, so the end result of this tit-for-tat won’t be to their liking.
*Mark Glennon is founder of Wirepoints
Earlier articles on Illinois’ misuse of taxpayer money for political goals:
- Illinois’ Latest Use Of Taxpayer Money As Political Club
- Illinois Treasurer Frerichs Playing Activist Shareholder With College Savers’ Money
- As markets tank, Illinois prioritizes social justice for investing public money
- A Bill To Prohibit Illinois Pension Investment In ‘Wall’ Contractors
- Illinois Treasurer playing activist shareholder again with stock not his; wants new Facebook chairman
- Illinois Treasurer Shoots Self In Foot Defending Activist Social Investing –
- Why that municipal bond purchase by Illinois Treasurer makes me nervous
- Illinois Treasurer Will Punish Taxpayers, Blameless Shareholders and Employees for Wells Fargo Scandal
Audio and summary 
If this bill passes, say goodbye to local control over all Illinois parks and expect to see open drug and alcohol use, needles, no sanitation and fire hazards, but no ordinary park users.
Call me crazy but will this not eventually result in a lawsuit against these states for impeding interstate commerce?
Doubtful under present law, from what I know. I believe both the interstate and foreign commerce clauses have been interpreted to allow states wide latitude to do what they want with their own assets or their own markets.
As long as taxpayers assume all the risk of these investments, profit should be the primary goal. That said, the state shouldn’t be investing in companies that break the law or do undue harm, but these types of companies wouldn’t be good investments to begin with.
Democracy, toe the line or we’ll punish you the woke are universal Dbags. I found myself dealing with some of them on Thanksgiving. I kept my mouth shut. No reason the ruin dinner over idiots!