I often agree with Dave Ramsey on his personal finance views and debt-free lifestyle. As I watched his show this evening, during the intro, when he gets to “rant” before taking callers, he asked his viewers and listeners to boycott Citi and Bank of America. He told them to pull every penny from them in order to sent the government a message saying, “this does not sit well with us”.
Let me first say that I completely understand what he is talking about. The last thing I want to see is the Government taking over banking institutions, so in that respect I agree with him. But I see the strong “protest” he is making as being nothing more than a test to see how much pull he really has in this country. He knows that millions of viewers and listeners see and hear him everyday and that his clout in the world of finance is large. Because of this, he thinks that he can make a point by telling people to bank elsewhere.
If you have a real problem with the government stake in Citigroup, by all means, stand by your principles and do what you feel is right to send a message. I have absolutely no problem with that. The issue I take is that Bank of America is still a publicly traded company, with little government intervention save from a tarp loan, and to tell your audience to boycott a business solely because you have a feeling that the government is going to jump in and take over at any moment is just irresponsible. Throwing gasoline on the fire, if you will. This institution, like many others, has problems. No doubt about it.
By staging a protest like this, you are pushing people to make Bank of America even weaker by slashing their deposit base and practically begging the fed to intervene.
Here is what I attribute this boycott to:
If a fat lady was on the brink of falling off of a cliff, the only thing keeping her on stable ground was 20 people holding her, and 8 of those people decide that they do not want to continue holding her because a forklift is already on it’s way and they decide to let go…they are only forcing the forklift operator to drive faster, or she will die.
I am not suggesting that Mr. Ramsey has enough pull to make that drastic of an impact on the situation. But what is to say that this social protest does not end up being the straw that breaks the camel’s back, thus “forcing” the government to make a move similar to the Citibank stake.
Some may think that BOA is on the brink of disaster, while some feel that they have gotten a bad rap due to some questionable purchases. You can find countless articles with arguments for both. All I ask is that you do not blindly follow Dave Ramsey. This is nothing more than an irresponsible plea by Mr. Ramsey to see what kind of effect he can have on the economy adn more specifically, banks themselves.
Make your own stands for your own principles.
For further opinions on BOA and whether the government will step in similarly to the Citi situation, check out these articles:
Eight Reasons Bank of America is Going to $20 at Seeking Alpha.
Nationalization concern dogs Citi, BofA at MarketWatch.