Wednesday, March 15, 2023

The Tweet That Captures the Backlash That Could Come From Bailing Out Silicon Valley Bank

The Tweet That Captures the Backlash That Could Come From Bailing Out Silicon Valley Bank

AP Photo/Jeff Chiu

Silicon Valley Bank collapsed over the weekend, unable to meet its obligations after a run occurred on the bank. SVB had accrued significant losses, thanks to the fluctuations in the tech market, in which it heavily invested. It’s an institution that lends heavily to tech startups, and when Wall Street took a hammer to that industry, the bank was left mightily exposed. The bank announced that they needed to raise massive capital to cover the losses, which sparked panic. That led to its closure, with the Federal Deposit Insurance Corporation taking control. Will there be a bailout? Yes and no. It’s nothing like the Trouble Asset Relief Program under Bush that gave these fat cat bankers almost a trillion dollars to stabilize their institutions amid the housing market collapse. But the Biden administration guarantees deposit security, including uninsured amounts, more than the FDIC’s $250,000 limit. As NBC News reported, this will be taken out of the corporation’s Deposit Insurance Fund, though Biden’s current line is that it will not cost taxpayers a dime. That’s fantasy land. 

Federalist Editor Sean Davis summarized these developments with a simple tweet showcasing this administration’s loathing of middle America. 

“I’m sympathetic to arguments to protect deposits at banks, but the federal government giving a bailout to Silicon Valley while giving a finger to East Palestine is the stuff that revolutions used to be made of,” he wrote.

It took the Biden administration almost a month to get Transportation Secretary Pete Buttigieg to East Palestine, Ohio—the site of the ongoing toxic train derailment that could make for an environmental calamity. It took two weeks for Biden to sign off on releasing federal resources to help the embattled residents. One reason for the torpid response was simple: these people didn’t vote for him, so Biden wanted them to suffer. 

Now, a bank that was Silicon Valley’s go-to venture capital cow has been slaughtered, and he comes sprinting to make sure rich, wealthy, left-wing whites don’t lose one of their homes. Both crises deserved equal attention and rapid responses, but only one got that treatment, and the people of East Palestine will also be billed for it, along with the rest of us. 

“It reminds me of that time when the government and bankers ruined the economy, and people who couldn’t make their mortgage payments lost their homes, while the banksters who nearly destroyed the entire global financial system got bonuses and $700 billion in bailouts,” Davis added.

And people wonder how populism can return with a vengeance and put someone like Donald Trump in the White House. Well, here you go again.

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