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There is something extremely twisted about making boycotts illegal. At any rate what's stopping the institutions from making other arguments about boycotts that only incidentally target Israel? For example, they have every argument to not associate with institutions that may be held liable for gross human rights abuses.
In that case, they would have a hard time justifying the boycott of Israeli universities where many of those practice forms of affirmative action to (successfully) encourage inclusivity and proportionate representation of Arab students.

They would also have to boycott institutions in dozens of other countries less they be seen as antisemitic.

A throwaway account made an hour ago to post Hasbara. At this point you make the point for me.
Yep, that your side must resort to shutting down counterpoints by attacking the format rather than the content, and you have a special word for any views that go against your beliefs, which once invoked automatically and magically refutes the argument.
What argument? You know we can see in real time what Israeli government officials say and there’s daily real time streaming of settler terrorists stealing land every day.
The argument was about universities, who are not settlers and not the government (it’s the equivalent of saying we should boycott American universities because of Trump).

You would like to come up with some criteria that would “incidentally target” only Israeli institutions so that it doesn’t look like you’re simply punishing them for being Israeli.

I invite you to come up with such criteria and then see how many countries we can no longer collaborate with academically. We’d probably have to shut down our own universities as well.

Oh, please do link me to where I can watch today’s live stream of settlers stealing land today.
BTSelem's social media does fine, bot.
If you take the king's shilling, you do the king's bidding. The law doesn't make boycotts illegal. It just says that you can't receive federal money if you're going to spend it on operations that engage in this kind of boycott.
So much for freedom of speech, etc. Are they going to ban donating to particular parties, requiring such donations, etc.
This is something that has been going on for years and ends up filtering down well beyond the initial entities that were restricted. For example, my company is a vendor to several universities and we have to certify for some of them that we are not boycotting Israel in order to renew annual contracts.
so why is the american government allowed to choose who to fund based on political speech?

is the first amendment written badly such that its only about negative things?

What the American government funds with tax dollars should be chosen by the American people, via Congress. Choosing not to fund speech isn’t the same as prohibiting it.

That said, “chosen by the American people” needs to be broad enough that we’re not singling out individual universities and individual countries based on the power of their political lobbies.