Both the Colorado House of Representatives and Senate have recently passed a form of a proposed law directing the Public Employees Retirement Association (PERA) to research, review, and if necessary, change its investments in any foreign company which has involved itself in economic sanctions against Israel (the BDS movement — Divestment, Boycott, and Sanction).

Never mind that this bill was opposed by the board of trustees of PERA, nor that it is trying to involve Colorado in a 5,000 year old regional conflict, how about just trying to figure out how to implement this “simple” piece of proposed legislation? The sponsors make a simple case: Israel is an ally of the United States and since other countries are applying economic sanctions against it, Colorado should apply the same economic sanctions against these countries. (Let’s skip the part about what the sponsors hope to accomplish – maybe peace in our time?) Instead, let’s focus on the efficacy of getting into this battle: Will these other countries now cease the sanctions they have had since 2005, or will this tit-for-tat just continue until it spreads to all 50 united states, then to our federal government, and then to all the other counties of the world? And then, what? We will have peace and economic liberty for everyone?

Now let’s see how the PERA investment team is going to implement this. They just have to check to see what companies are publically stating that they are divesting from companies who work with Israel and then PERA divests in those companies. PERA just has to divest of those who divest. What kind of an investment strategy is that?

With great irony, one of the bill’s sponsors, a fine gentleman from Colorado Springs, stated, “[The] bill directly affects Colorado retirees by protecting their future benefits from risky investment decisions based on BDS, rather than sound economic policy.” The thought here is that the BDS companies who are divesting due to their political motivations become themselves risky investments because they have sacrificed sound economic strategy. So PERA should follow this same flawed logic and sacrifice investment strategy for political motives?

With this bill’s passage and signing into law by the governor, Colorado has entered a new realm of political and economic entanglements.

The strategy that one economic sanction deserves another is a failed one on three counts. First, nations throughout history have and will always continue to disagree with each other over one issue or another. Some issues are so great, or some nations are so offended, that the wars turn from economic punishments to physical violence. The United States is no bystander in these actions. However, for the state of Colorado to portend it can bring about any positive change in this regard by entering the fray of boycotting those who boycott is either misdirected or naïve, but nevertheless, injurious to our state.

Secondly, directing PERA’s investment advisors to shift their research from maximizing profits and minimizing returns will only yield the opposite for both. Political statements made by legislators may be within their purview but using the investment portfolio of our state’s largest pension fund to so do compromises Colorado’s financial resources. Plus, the non-partisan legislative staff estimates this will cost PERA up to $150,000 each year to implement. And let us not forget, it is the Colorado taxpayer who is on the hook for the poor investments in PERA.

And third, is there truly any upside in passing a law that yields the first two consequences mentioned? Knowing that the proposed bill limits the PERA asset investment to 0.5% of its assets and excludes companies based in the United States (political statements don’t want to hit too close to home), is this really a significant amount in our global economy to end the 5,000 year old Middle East conflict? (The US has directly boycotted Cuba for over 50 years, deprived us all of Cuban cigars, and for what?)

Let’s keep our legislators focused on the issues in our State, leave the foreign policy to our national legislators, and follow George Washington’s advice in his Farewell Address: “Peace, commerce, and honest friendship with all nations — entangling alliances with none.”