- - Wednesday, February 12, 2020

Liberals want to regulate banks for the same reason Willie Sutton used to rob them: That’s where the money is. And, according to their fevered brains, that’s where the power is. Having control of the nation’s financial system gives them control over everything.

That’s a bit hyperbolic but there’s also some truth. Fortunately, there’s still enough diversity and competition in the banking and financial sector to make what they want a tough row to hoe. But they’re still trying, and they’re being much cleverer about it than they used to.

They still use the boycott — or the threat of one — to get companies to comply with their demands. And they’ve been good at infiltrating the nation’s business schools, all the better to poison future captains of industry at the well by infecting them with notions of corporate social responsibility and other ideas that end up giving left, anti-market proposals a friendlier than should be allowed reception in C-Suite from Wall Street to Silicon Valley.

What they can’t get through regulation they want to achieve through pressure. Activists working to implement an agenda embraced by Bernie Sanders and Alexandria Ocasio-Cortez and Elizabeth Warren putting so-called corporate stakeholder interests ahead of stockholders are getting more aggressive. They’re organizing resolutions pushing anti-market and progressive social policies, pressuring government officials to divest pensions from industries they don’t like and demanding banks stop financing the industries they hate.

This stepped-up pressure campaign is working. If it continues unchecked, it will create an unfortunate but effective end-run around the traditional policymaking structure. Corporate policies created to promote political ends rather than economic growth will be as destructive to the mixed-but-largely free market system we have in America as anything Hugo Chavez and Nicolas Maduro came up with for Venezuela.



In the banking sector, they’ve been successful getting banks to jettison customers from industry sectors they don’t like, including energy, firearms and the private-corrections business. Operation Choke Point, which the Obama administration authorized to allow for discrimination in banking against disfavored industries may have been killed by the Trump administration, but activists in the private sector at groups like Real Money Moves are nonetheless trying to keep it alive.

This group, which is backed by the usual crowd of Hollywood celebrities like Amy Schumer, Alyssa Milano, Gloria Steinem and the cast of “Orange Is the New Black” to generate media interest in its activities so its anti-capitalist message will get the broadest possible circulation, has had success pressuring big banks like JPMorgan Chase and Wells Fargo to cut ties with industries they don’t like.

That’s a legal problem as well as a moral one. People and companies that can’t access the banking system are cut off from credit, have no place to store receipts and, in general, can’t do business. If this kind of thing were done to people of color, everyone would be justifiably up in arms, but because those effected are disfavored by the beautiful people, this arguably illegal discrimination though the politicization of banking and lending is largely overlooked.

Banks should not be choosing market winners and losers any more than government should be. They should be allowed to do what they do free from pressure to attack specific industries by being forced to not do business with them. These attacks have real-world consequences. What will happen to the price at the pump if companies that manufacture the materials used to build oil and gas pipelines are shut out of the banking system? And what will happen to consumers and the rest of America as a result?

Americans — and specifically the banks being pressured to engage in discrimination — should resist. Instead, too many have already rolled over and complied with activist harassment. The list of targeted industries will expand as the activists see success and that will be bad for job creation, economic growth and global competitiveness.

Treasury Secretary Steven Mnuchin has noted publicly that the banking industry has an obligation not to discriminate against specific industries. He’s acknowledged there’s been pushback on banks that have participated in these practices. He should be applauded for his leadership on the issue, but he and others within the federal regulatory enforcement sphere need to enforce the right of the financial community to operate without being bullied.

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