Bank of America to donate $50 billion for climate change research ...after bailout.
admin | On 13, Jun 2012
Often times, the economy is a good indicator of how people feel about certain issues. For instance, if suddenly society realized that the consumption of beef was morally inexcusable, then beef sales would dive to extremely low levels. Simply put, people vote with their wallets and purses. So, when Bank of America decides to donate $50 billion over the course of 10 years to climate change and ‘green’ research, people grow very confused.
Bank of America has issued several statements about their intentions over the course of the next decade. Kristen Jones of Capital.gr reports:
Bank of America Corp. (BAC) said it will contribute $50 billion over the next 10 years to address climate change, the latest company to boost its investments toward environmental goals.
The new set of goals will be effective on Jan. 1, following the anticipated completion of the bank’s current 10-year pledge of $20 billion, which it said is four years ahead of schedule. “Environmental business delivers value to our clients, return for our shareholders, and helps strengthen the economy,” said Chief Executive Brian Moynihan. “We met our prior goal in about half the time we set for ourselves, so more than doubling our target is ambitious but achievable.”
To sum up the Cheif Executive’s words, they feel as if ‘green research’ is a fantastic use of their dollars. Actually, that was an intentional misstatement… I meant to say, taxpayer dollars. In fact, if you will remember the Obama stimulus packages a few years ago: Bank of America received quite the substantial injection of government funding to ‘bail them out’. Bob Ivry, Hugh Son, and Christine Harper report from Bloomberg:
Bank of America benefited from two injections of U.S. bailout funds during the financial crisis. The first, in 2008, included $15 billion for the bank and $10 billion for Merrill, which the bank had agreed to buy. The second round of $20 billion came in January 2009 after Merrill’s losses in its final quarter as an independent firm surpassed $15 billion, raising doubts about the bank’s stability if the takeover proceeded.”
Just 3 years later, Bank of America feels like it’s a good idea to just ‘donate’ $50 billion to climate change research, after the American taxpayers throw roughly $45 billion at the corporation to keep them solvent. Does that sound like a great use of our money? Now, Chief Executive Brian Moynihan can argue that green research ‘helps strengthen the economy’, but remember how that works? The consumers vote with their wallets and purses… so let’s see how other examples of government funded green products appear to be selling.
After a long thrashing from the National Legal and Policy Center, they conclusively prove that consumers just don’t buy climate change ‘prevention’. While it is a warm and fuzzy thought to ‘save the planet’, people don’t believe it enough to put their money where their mouth is. Paul Chesser of NLPC writes:
General Motors sold a paltry 1,860 Volts in May (compared to 29,579 Chevy Malibus as my NLPC colleague Mark Modica noted), while Nissan sold an embarrassing 510 Leafs. Meanwhile Ford has sold only 16 Focus Electrics – total – so far, but a company official told USA Today it isn’t trying very hard to sell them.”
So, what we are seeing here is that Bank of America is about to blow $50 billion in climate change research, because it helps the economy. But, as you can see from Chevy Volt and Nissan Leaf sales, that’s not a smart move on their part. Just like Solyndra, we may end up watching another bad business decision on the part of Bank of America, only to have their lobbyists panhandling on Capitol Hill when the whole thing goes south.
The worst part is the fact that they are ‘pledging $50 billion’ of money they don’t have, to solving a ‘problem’ that might not even exist, all while their corporation is being threatened by a Moody’s downgrade. DailyFinance.com’s, Amanda Alix, writes: “Moody’s sent out warning flares in February, when it announced its plans to examine 17 global banks, including Bank of America (NYS: BAC)…”. Seriously, executives can’t be that irresponsible, right?