Monday, December 08, 2008

Bailed Out BoA Goes Janus? Or Is It All the Same to Them?

On the one hand, Bank of America received lots of love and kisses from progressives and environmentalists last week for committing to end "financing of companies whose predominant method of extracting coal is through mountain top removal." On the other hand, Bank of America is getting criticized and threatened by the State of Illinois for refusing to provide a line of credit so that some Main Street workers can receive their paychecks.

Ostensibly, this looks like two-faced good BoA/bad BoA. But that strip mining pledge smells suspect to me on second thought. In this bailout economy banks are refusing to extend credit to anyone beneath them in the pecking order. That includes Main Street businesses that have to meet payrolls; and it probably includes mining companies on Back Roads. Like all of the bailout banks, BoA is holding the federal government's "stimulus" subsidies for itself. And when the economy turns around, there is nothing stopping them from rewriting the policy to include loans for mountaintop removal once again.

So, should we simply assume that BoA still would have written a new coal policy to leave out loans for surface strip mining with or without a recession? And what about the fact that there is no specific pledge to finance greener industries? The new policy vaguely says that BoA will use its partnerships and resources to lower carbon emissions.  That's hardly putting their loan money where their coal policy is.  We'll just have to wait and see whether BoA is half bad or just all bad.

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