US relationship with Israel is broken right now: KT McFarland
Former Trump Deputy National Security Adviser K.T. McFarland weighs in on the fractured U.S.-Israel relationship as the Biden administration grapples with foreign policy ahead of the 2024 election.
An economist is warning U.S. students calling for their universities to "divest from Israel" that such a move would be "almost impossible" to implement.
In an interview with Fox News Digital, First Trust Deputy Chief Economist Robert Stein explained that Boycott, Divestment, Sanctions (BDS) supporters are mistaken about what it would mean to divest from Israel-affiliated companies.
"Any of the investments that the terrorist sympathizers would like colleges not to make are in index funds, in which colleges and universities are invested in a very broad array of stocks," Stein explained.
Because index funds contain a variety of stocks, the task of finding a fund that contains no stocks from Israeli companies – and American companies that do business with Israeli companies – would be impossible.
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An anti-Israel protester at Pomona College in Claremont on Thursday, May 9, 2024. (Will Lester/MediaNews Group/Inland Valley Daily Bulletin via Getty Images / Getty Images)
"So trying to divest from Israel, and companies that do business with Israel, presupposes that there's some sort of similar broadly indexed fund, or ETF out there in which universities can invest," the economist continued. "And offhand, I can't think of any."
"Basically, it would be almost impossible for BDS to be implemented... logistically, a market would have to be created for funds dedicated to not investing in Israel."
Universities would need to abandon index funds altogether and focus on individual stocks. As such, they would lose the benefits that index funds provide.
"Essentially, they would require colleges and universities to invest in individual stocks or very narrow indexes, which would be more costly to the colleges making the investment," Stein added.
Though some have speculated that tuitions may increase if universities completely divest from Israel, Stein conceded that the chances of that are unlikely because of the nature of endowments, which would be impacted by the investment moves.
Student graduates hold white t-shirts saying, "divest," as they protest during the UC Berkeley graduation in Berkeley, Calif. on Saturday, May 11, 2024. (Yalonda M. James/San Francisco Chronicle via Getty Images / Getty Images)
"I don't think if BDS were to be imposed, that it would raise tuition," Stein explained. "Because I don't think endowments are used to cut tuition. They're used to hire more administrators. They're used to increase pay for academics… academic institutions use endowments to enrich themselves, selfishly."
Stein, who formerly worked for the Department of Treasury and the Senate Budget Committee, stressed that the idea of divesting against Israel is unrealistic.
"I believe that a lot of these groups are asking for divestment from Israel knowing how difficult it is and frankly, not caring," Stein said. "Because in the end, their movement is about getting attention for themselves so that they can be leaders of social activist groups in the future."
A an anti-Israel encampment at the University of Toronto in Toronto, Ontario, Canada on May 12, 2024. (Kyle Mazza/Anadolu via Getty Images / Getty Images)
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"It's not actually about divestment and even if divestment were logistically possible, and if the university were capable of giving in on that issue, they would find another excuse to blame Israel for something else and to attack Jews because apparently they are predisposed to do so," he added.
