PCUSA Divestment: anti-semitism, bad economics and politics, and a breach of fiduciary duty

H/T to Jon at Divest this, for pointing out this essay.

Stephen Bainbridge is the William D. Warren Distinguished Professor of Law at the UCLA School of Law in Los Angeles, where he currently teaches Business Associations, Advanced Corporation Law and a seminar on corporate governance. In past years, he has also taught Corporate Finance, Securities Regulation, Mergers and Acquisitions, and Unincorporated Business Associations. Professor Bainbridge previously taught at the University of Illinois Law School (1988-1996). He has also taught at Harvard Law School as the Joseph Flom Visiting Professor of Law and Business (2000-2001), La Trobe University in Melbourne (2005 and 2007) and at Aoyama Gakuin University in Tokyo (1999).

From his essay: Here we go again: PCUSA considering Israel divestment: Anti-semitic, bad economics and politics, and a breach of fiduciary duty

Once again, the Presbyterian Church (USA) is considering divesting from certain companies that do business with the Israeli government. As I explained the last time the church went down this road, it's a bad, anti-semitic idea:
Let's start with a basic question: Will the PC(USA)'s decision "work"? In other words, do divestment campaigns tend to achieve their proponent's goals? The clear answer from the empirical literature is "no."

A London Business School Institute of Finance and Accounting working paper called "The Effect Of Socially Activist Investment Policies On The Financial Markets: Evidence From The South African Boycott concluded:

"We find that the announcement of legislative/shareholder pressure of voluntary divestment from South Africa had little discernible effect either on the valuation of banks and corporations with South African operations or on the South African financial markets. There is weak evidence that institutional shareholdings increased when corporations divested. In sum, despite the public significance of the boycott and the multitude of divesting companies, financial markets seem to have perceived the boycott to be merely a 'sideshow...'"

In sum, divestment may make activists feel all warm and fuzzy, but the evidence is that
(1) it has no significant effect on the target of the divestment campaign but
(2) likely does harm the activists' portfolios...

As for whether the divestment proposal is anti-semitic, I use a standard proposed by Jay Lefkowitz:

A more nuanced standard, and one that properly recognizes that legitimate criticism of Israel is perfectly appropriate, was articulated last year by Natan Sharansky. A member of the Israeli cabinet who for years had been a prisoner of conscience in the Soviet gulag, Mr. Sharansky defined one current expression of anti- Semitism by three features: the application of double standards to Israel, the demonization of Israel and the delegitimization of Israel.
Applying it back in 2004 to the last time the PC(USA) got into the divestment game, Lefkowitz made a persuasive case that the Presbyterian divestment plan was anti-Semitic:

The recent action by the Presbyterian Church sadly satisfies Mr. Sharansky's test. The church has singled out Israel, alone among all the nations of the world, for divestment. It has demonized Israel's treatment of the Palestinians, and it has delegitimized Israel's right to self- defense...


Nothing's changed in the meanwhile to change that conclusion. If the PC(USA) in its finite wisdom (that's not a typo--as a collective, the PC(USA)'s wisdom is not just finite, it is minuscule) decides to go forward, it will once again be committing anti-semitism, bad economics and politics, and a breach of fiduciary duty simultaneously. That's quite a hat trick.

Read this important essay in its entirety here

Israel: Best Economy in the West

The attempts of the BDS'ers to economically isolate the world's only Jewish state approached epic failure this year, with the Israeli economy recently pronounced "The Best in the West"

In spite of a world-wide recession, and the BDS'er's best efforts, Israel's Gross national product grew by 4.5% in 2010, compared with only 2.7% in the other 33 countries of the Organization for Economic Co-Operation and Development (OECD). Israel became an OECD member state this past September.

Since Israel's independence, exports have increased 11,250 times, according to a report by the Israel Export and Cooperation Institute. Exports totaled $6 million in 1948, and grew to $67.5 billion in 2009. The current export value has more than doubled since 1998, and is $6.5 billion less than the expected figure for 2010.

Yep, BDS= epic fail.

And on a related note, candy sweet Sharon persimmons are back at the Berkeley Bowl. Enjoy them while you can- the season is way too short. They are great eaten like an apple- but try them sliced thinly in a spinach salad, with sliced red onions, and a fruit or nut based vinaigrette. You can eat well, torment the BDS'ers, and help Israel's economy grow grow grow, in a single step.

Life is good.

"Divest this: How to Stop the Global Boycott Sanctions and Divestment (BDS) Movement Attack on Israel"

Jon, the brilliant, lucid voice behind "Divest this" has come up with a new weapon in the war against BDS. Jon's new handbook is "Divest this: How to Stop the Global Boycott Sanctions and Divestment (BDS) Movement Attack on Israel and ensure its Second Decade of Defeat".

The Handbook is a must read for any community, school or commercial institution dealing with the specter of BDS, drawing upon Jon's years of experience as a voice of light and reason in the BDS battleground

Jon's Top Ten Reasons to Defeat BDS:

1. BDS represents an attempt by narrow-interest partisans to stuff
their propaganda into the mouth of a third party.
2. BDS tries to make every civic organization a new battlefront in
the Middle East conflict.
3. BDS poisons and divides any community it enters.
4. BDS is based on falsehoods, such as the “Israel=apartheid” propaganda accusation.
5. BDS warps debate over the Middle East, making the quest for peace more difficult
6. BDS seeks to unfairly punish just one side in the Arab-Israeli conflict.
7. BDS activists frequently use manipulation or fraud to get their way with an organization.
8. BDS has been rejected by every organization where it’s been tried, including some of thenation’s most progressive communities.
9. Defeating BDS helps discredit the discreditable endeavor to de-legitimize Israel.
10. BDS is a loser.

When BDS invades a civic organization, divisiveness, hostility and chaos ensue. This new handbook gives supporters of Israel the tools we need to fight back.

Yascher Koach, Jon. May you go from strength to strength.

If you are going to Boycott Israel, do it right

If you are going to Boycott Israel, do it right: Reject Israeli Technology and Insist on Invasive and Expensive Medical techniques

For all you BDS’ers out there: Saving lives is never as important as advancing an ideology. If you are suffering from respiratory disease, be sure to reject Electromagnetic Navigation Bronchoscopy- a new technique developed by Super Dimension , a private company based in Israel. ENB is a comprehensive, advanced lung navigation system now used in over 275 hospitals worldwide, that has facilitated diagnosis in over 15,000 patients, with the potential to aid in the early diagnosis and treatment of lung cancer extending the reach of the conventional bronchoscope, deep in the lungs and lymph nodes.

Read more here:

HIV positive ? A substance that destroys cells infected with deadly HIV and could prevent AIDS, has been developed in Israel after a decade of research by biologists and chemists at Hebrew University . The focus of all the excitement is a unique peptide, a short protein-like substance . When researchers applied it to human cell cultures, the peptide destroyed HIV-infected cells within two weeks without harming healthy cells. The Israeli discovery holds the promise of preventing AIDS. But we know you will reject this, and encourage the 33 million currently infected with HIV to do the same. It’s a small price to pay for rejecting zio- neocolonialist apartheid.

Read More Here:

Are you a Kaiser patient? Then insist on name brand pharmaceuticals, not generic Teva drugs, that bear the taint of the apartheid state. Surely money is no object in your effort to bring down one of the great evils of the world?

Boycotting Israel is about so much more than abandoning your Israeli couscous or Elite chocolate. If you are going to boycott Israel, be consistent. For more tips:

BDS is Not About Peace

The prestigious online journal "Words without Borders" has launched a new project entitled "Cross-Cultural- Dialogues in the Middle East” The dialog was begun by Azareen Van der Vliet Oloomi, of Iranian Muslim background, and Chana Morgenstern, an Israeli fiction writer, who met as graduate students at Brown University in the United States.

Azareen writes: “We quickly developed a dialogue about literature’s potential to provide a space for confronting some of the more challenging questions of identity and politics that define the contemporary Middle East.”

Now in Jerusalem, the pair found themselves “ engaged in a boisterous literary conversation with Israeli and Palestinian writers and artists who come from a variety of religious backgrounds. Over the next few months we will be presenting a series of interviews and articles that explore Jewish and Arab relations within Israel and the Palestinian Territories as well as the larger Middle East. One of the guiding questions of this series will be whether or not literature and film can offer a fertile space for cross-cultural and religious dialogue in the region. The series, as we foresee it, will cover emerging guerilla poetry movements, collaborations between Israeli and Palestinian intellectuals and writers, interviews with international and local film makers, reviews of the Jerusalem Film Festival, as well as an overview of various grassroots cultural organizations in the West Bank.”

This is good news, right? Open dialog, mutual respect, cross cultural communicative are truly a path to peace. No. Things are never that easy in the Middle East. Instead, Morgenstern and Van der Vliet Oloomi’s project has been condemned by BDS proponents.

According to an editorial in the Electronic Intifada (forgive me if I don’t link to it) written by Associate professor of Cultural Studies at Gaza's Al-Aqsa University Haidar Eid on August 9 2010 :

“Indeed, the guidelines issued by the Palestinian Campaign for the Academic and Cultural Boycott of Israel (PACBI), explicitly warn against events or projects that promote "false symmetry or balance." All "events and projects that bring Palestinians and/or Arabs and Israelis together, unless framed within the explicit context of opposition to occupation and other forms of Israeli oppression of the Palestinians, are strong candidates for boycott" .

Yes. Projects that promote peace, dialog and co-existence, unless they meet the litmus test of political correctness are candidates for boycott. And the test remains (I’m paraphrasing) "Is Israel blamed exclusively and unilaterally for all the problems in the region? Are the Palestinians and the Arab world as a whole exonerated from any responsibility at all in contributing to the peace process? "

According to the EI, “Indeed, the choice is clear to the vast majority of Palestinians, and intellectuals must recognize that true "cross-cultural dialogue" is impossible when one voice is being stifled, silenced and erased by another. “ And that , Prof Eid, is exactly what the BDS movement is doing to the peace process.

The movement towards Boycotts, Divestment and sanctions (BDS)is not about promoting peace. It is about demonizing Israel. Real peace activists know that the path to peace is more dialog, more interactions, and closer political, cultural and economic relationship.