A State Is Trying to Set Its Own Foreign Policy (Again)

California is looking to divest from Iran with respect to its pension investments. Unfortunately, they are probably preempted from doing so by the "dormant foreign affairs" clause of the Constitution; Massachusetts and Illinois both learned the hard way that there are strict limits on the states' ability to meddle in foreign matters.

Perhaps Congress can authorize, to a very limited extent, the exercise of such soft power on the part of states? It would allow them to establish policies that are preferred by their citizens, while ensuring that national foreign policy is not compromised. This would require very narrow tailoring, however; for instance, a ban on investment in the state of capital from a target country cannot be permitted.