Washington appears to have reached its limit with the wild investment and carefree nature of the US financial and technology sectors, signaling over the weekend that a bailout for Silicon Valley Bank, which is now in danger of being unable to secure all uninsured deposits, is unlikely.
That’s bad news for companies and individuals with uninsured stakes in the massive institution, which was known for catering to an exclusive clientele in the tech industry. With investors blaming a handful of venture capitalists for sparking the bank run, most hoped Washington would provide at least some relief in case the bank’s assets cannot be bought by another, healthier firm.
Although there was support for such action in the middle wings of both the GOP and the Democratic Party, the White House position was laid out over the weekend by Janet Yellen, chair of the Federal Reserve.
“We’re not going to do that again,” she said flatly, referring to the bank bailouts of the 2000s.
Others in Washington were similarly eager to distance themselves from the politically toxic idea of yet another intervention by the federal government to shore up America’s banking systems; Rep. Nancy Mace, a Republican, announced her own opposition to a bailout on CNN’s State of the Unionwhile progressives including Alexandria Ocasio-Cortez responded to calls for handouts with scathing responses, pointing out that SVB itself had pushed for less government oversight of its actions, while many other supporters of the bailout had opposed federal aid to Americans with high student loan debt.
“How many of the Silicon Valley people who lobbied Congress + Trump to cause this crisis are willing to admit they were wrong?” wrote Mrs. Ocasio-Cortez. “I haven’t seen a single one of these guys crying for a bailout take an ounce of responsibility for their actions. It’s frankly shameless.”
As much of Washington’s serious political thought was consumed by the debate over what to do in response to the second-largest banking collapse in US history, America’s culture warriors sought simplistic and convenient explanations for the bank’s failure and for a target to blame.
By Sunday, they seemed to have found it, and had begun to launch nonsensical accusations against SVB bosses, accusing them of focusing on a “woke” ideology rather than managing their clients’ risks appropriately; the only evidence of this seemed to be LinkedIn postings about corporate diversity initiatives, which are common in the American workplace.
James Comer, chairman of the House Oversight Committee, has emerged as one of the lawmakers most eager to latch on to these issues raised by his party’s far right wing, fresh from making wide-ranging comments, suggesting that the president’s dead son should have been indicted for campaign finance violations was on Fox News over the weekend making nonsense claims about SVB’s alleged vigilance.
He was far from alone when Donald Trump Jr. and a number of other Fox News talking heads like Bernie Marcus and Todd Starnes joined the dog.
“SVB is what happens when you push a leftist/woke ideology and have it take precedent over common sense business practices,” said Trump Jr., who was recently in Washington for the three-day CPAC conference, where he spoke and hosted his podcast. .
“This won’t be the last failure of this kind as long as people are rewarded for pushing this bs,” he added.
“I think the administration has pushed a lot of these banks to care more about global warming than they do about shareholder returns,” Mr. Marcus said on the right-wing network.