Artificial Hysteria

The Supreme Court earlier this week stayed a district court’s order blocking the Trump administration from deporting illegal aliens to countries that are not the home countries of those illegal aliens. The activist Justices on the Court demurred. The Court’s stay does not address the underlying case; it merely allows the administration to proceed while that case makes its way through our court system. It’s the nature of their demurral that’s instructive here, though.

Justice Sonia Sotomayor wrote for the dissenters,

Apparently, the Court finds the idea that thousands will suffer violence in far-flung locales more palatable than the remote possibility that a District Court exceeded its remedial powers when it ordered the Government to provide notice and process to which the plaintiffs are constitutionally and statutorily entitled[.]

This over-the-top manufactured hysteria by the activist Justices does the Court no good at all. In an environment where many begin to question the legitimacy of the Court, Sotomayor’s excessive hype is the sort of thing fueling that question.

Lose the Claptrap

Bank management teams are trekking to Conservative States in an effort to get back in the good graces of State governments whose governors and legislatures disdain woke and otherwise bigoted, illegal, and discriminatory policies like redlining whole industries such as gun manufacturing and fossil-fuel extraction. These bank management teams are trying to convince the States that they’ve left off those policies and now only lend, or not, for financial, legal, and reputational reasons.

Therein lies these bank managers’ disingenuousness and cynicism. Refusing to do business over “reputational reasons” is just a weasel-worded excuse for discriminating against industries and individual companies about which someone might object. Or even about which a whole political party might object. In either of those cases, “reputational risk” would be wholly manufactured rather than something intrinsically extant in the market.

The only lending criteria for a bank, or any other financial institution lending money, should be the borrower’s likelihood of repaying and the legality of the borrower’s activity. Bank management teams must exclude the chimerical “reputational risk” and do so in a publicly provable manner. Petty political considerations must never be allowed into what is at bottom a purely market and finance question. Banks that do not achieve this should join the growing list of banks already barred from doing business with State governments over their bigoted, illegal, and discriminatory policies.