Israel sees itself as a victim in the court of public opinion. Israel has been accused of committing numerous war crimes against their perennial adversary, "The Palestinians". In response, numerous financial entities have joined a movement to divest, boycott and sanction Israel. Companies, institutional investors and other entities that have influence on Israeli economics have become a target of legislation designed to punish any attempt at politically motivated boycotts, divestment or sanctions against Israel. That movement is better known as the BDS movement, for Boycott, Divest and Sanction.
Yes, there is now a law just for that, quietly hidden in the Trade Promotion Authority bill signed into law by President Obama only a few short days ago. Congress never ceases to amaze me in how they show favoritism to this or that entity, however big or small.
While this custom made legislation seems notable, there is an overarching theme to consider, perhaps it's better to identify this line of thought as a subtext to the debate. There has been plenty of news regarding the move to divest, boycott or sanction coal and oil. There are also websites devoted to helping people divest their investment portfolio of anything that would support fossil fuels, such as this one.
What I find of interest is that when it comes to Israel, someone in Congress thinks that the government can intervene and discourage divestment of Israel. Yet, no one has offered legislation to do the same for Big Oil or any other company.
Boycotts, divestment and sanctions are perfectly legitimate free market responses, even if they are politically motivated. I know for myself, that if I don't like the way a company is behaving, I avoid buying their products. If I join a group of people to do the same thing, that is still a free market response to bad corporate behavior, and it has the benefit of being coordinated.
Divestment is also a free market response to bad corporate behavior. If I join a movement to divest my investment portfolio from any entity, whether that be company or country, it's my right to do so. It's a perfectly legitimate free market response to bad corporate behavior that I believe places me at a disadvantage.
As to sanctions, well, that's up to the government. It's a matter of diplomacy and sanctions should be investigated carefully and used with caution.
Boycotts and divestment movements have not always been able to show clear results, but the news about them sends a clear and politically motivated message to their targets. The people still have power if they organize and coordinate their campaigns, as long as they remember that no matter what Congress passes, the right to divest and boycott remain expressions protected by the 1st Amendment.
Divestment and boycotts are what we can expect in a free market when corporations or countries act badly. This is what rational people know, even if a foreign country believes they have Congress in their pocket.