Robert Reich breaks down the Texas law that protects gun manufacturers from discrimination

Robert Reich breaks down the Texas law that protects gun manufacturers from discrimination
Image via Wikimedia Commons

Robert Reich is breaking down and criticizing the newly-enacted Texas state law that now prohibits companies from discriminating against gun manufacturers.

"A new Texas law went into effect that bans state agencies from working with any firm that 'discriminates' against companies or individuals in the gun industry," Reich wrote regarding the law passed in September 2021. "Texas’s new pro-gun industry law requires banks and other professional service firms submit written affirmations to the Texas attorney general that they comply with it."

Using J.P. Morgan Chase as an example, Reich noted how banking relationships with gun manufacturers changed significantly after the 2017 Parkland shooting. Chase was one banking institution to notably distance itself from gunmakers. But under Texas state law, such action is frowned upon and it puts companies a compromising position to face punishment.

"JPMorgan’s dilemma since Texas enacted its law has been particularly delicate because Jamie Dimon, its chairman and CEO, has been preaching the doctrine of corporate social responsibility: repeatedly telling the media that big banks like JPMorgan Chase have social duties to the communities they serve. (On Wednesday, Dimon dismissed claims that such an approach is 'woke.')"

Reich went on to note that even the largest banking institutions have been no match for a state like Texas. Instead of standing its ground, Chase, like many other companies, ultimately caved to the Lone Star state's law.

"So what did JPMorgan decide to do about financing gun manufacturers, in light of the new Texas law?" he asked before answering his own question.

"It caved to Texas," Reich wrote "(Never mind that last year, the bank’s board granted Dimon a special $52.6m award – which is almost three-quarters of the fees the bank received from underwriting Texas bonds between 2015 and 2020.)"

He broke down the key takeaways from the law.

"The lesson here is twofold," he wrote. "First, pay no attention to assertions by big banks or any other large corporations about their “social responsibilities” to their communities. When corporate social responsibility requires sacrificing profits, it magically disappears – even when it entails financing gunmakers.

"But secondly, no firm should be penalized by pro-gun states like Texas for trying to be socially responsible."

So, what could resolve this issue? According to Reich, big banking institutions like Chase should be forced to make an executive decision. "Big banks like JPMorgan should have to choose: either finance gunmakers and get access to the Texas bond market. Or don’t finance them and gain access to the even larger California bond market."

The former U.S. Secretary of Labor's arguments come just weeks after multiple mass shootings across the United States. Among all the shootings, the one that claimed the most lives took place at Robb Elementary in Uvalde, Texas. The 18-year-old shooter shot and killed 19 children and two teachers. The shooting has reignited the desperate calls for gun safety reform. However, Republican lawmakers are still slow to take action to combat the lenient gun laws in the United States.

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