Government boycott of Bank of America is misguided

Yesterday's news that the Illinois state government was going to stop doing business with Bank of America if it didn't extend credit to Republic Windows & Doors made many headlines. The city of Chicago followed suit, trying to get the bank to made a credit line available to the company.

Government officials have made a good point: The taxpayers are basically funding hundreds of billions of dollars to bail out banks. That money was supposed to be used to ease the credit crunch. (i.e. The banks were supposed to lend the money to customers.) But that's not really happening. Banks have been using the money to buy other banks, pay other costs, and hoard the cash. That's not how the bailout was pitched to the American people, and Illinois politicians want to force banks into making good on the deal.

Yet these public threats are the wrong way to go about finding a resolution to the situation. First, what makes Republic Windows & Doors so worthy of this chivalrous act? Aren't other private businesses equally worthy of such a grand gesture? Might there be other businesses that are more worthy of having politicians go to bat for them?


The Latest from our Partners