There’s been a financial war brewing around the Second Amendment. No, that sentence wouldn’t make a lot of sense unless you knew what was going on, but it started with disgraced New York Governor Andrew Cuomo “urging” banks to cut off gun companies. Many did, which caused a response, which now has Goldman Sachs trying to choke off Texas communities from potential funding.
Again, that doesn’t make much sense, does it?
Well, Texas is one of the places that responded to banks cutting off gun companies. They don’t think banks should be involved in Second Amendment disputes.
Goldman Sachs Group Inc. is said to be pulling back from public-finance business in Texas because of new state laws that seek to punish Wall Street banks for wading into the debates over gun control and global warming.
The bank, which is ranked as the sixth biggest municipal-bond underwriter in 2021, is joining rivals Citigroup Inc. and JPMorgan Chase & Co. in halting such business in Texas, at least temporarily, since the Republican-backed laws took effect Sept. 1, according to a state agency that had planned to have Goldman lead an upcoming sale. Bank of America Corp. also hasn’t handled any new Texas bond deals since the start of last month.
One of the laws bars Texas state and local governments from working with banks that have moved to curtail ties to the firearms industry in the wake of U.S. mass shootings. Another restricts state contracts with those that have shunned fossil-fuel producers, a major industry in Texas.
The board for the Texas Public Finance Authority last week voted to appoint a new bank to replace Goldman on an upcoming general-obligation bond sale because the bank is pausing its underwriting work in the state, according to an audio recording of the meeting provided to Bloomberg by the authority.
Honestly, will this be a massive problem?
Probably not. After all, there are other banks out there who will likely be thrilled to take on all that business. Texas is a large and wealthy state, and while some are less than thrilled with them and their stances, others will be more than happy to capitalize on the opportunity provided.
Now, don’t get me wrong. Banks and their boards of directors are free to set whatever policy they want with regard to who they do business with. If they don’t want to work with gun companies or the oil and gas industry, then so be it. They’re not required to.
Yet states should have the authority to make a determination over who they want to do business with as well. It doesn’t make sense to support banks that seek to undermine industries that are such a part of a state’s identity. There’s no reason they should feel obligated to undermine a key employer in their state.
And, frankly, I’m not comfortable with the financial industry deciding what’s good for our nation and what isn’t. Some of us remember the 2008 financial crisis quite well. Especially the way companies like Goldman Sachs–and specifically Goldman Sachs–played in that crisis. They don’t get to play moral superiority games now and hope we’ll just forget how they nearly crippled this country.
I’m sure the state of Texas will get along just fine without them or any of those other entities doing business with them. Why would you want to enrich people who hate what you stand for anyway?