Washington appears to have reached its limit with the buckwild investing and carefree nature of America’s finance and tech sectors and this weekend signalled that a bailout for Silicon Valley Bank, which is now in danger of being unable to ensure all uninsured deposits, is unlikely.
That’s bad news for the companies and individuals with uninsured stakes in the massive institution, which was known for catering to an exclusive clientele in the tech industry. As investors blame a handful of venture capitalists for triggering the bank run, most were hoping that Washington would provide at least some relief in the event that the bank’s assets cannot be bought by another, healthier firm.
Though there was support for such action in the centrist wings of the GOP and Democratic Party alike, the White House’s position was laid out this 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.
Other figures in Washington were similarly eager to separate 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 Union, while progressives including Alexandria Ocasio-Cortez reacted to the cries 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 for Americans with high student loan debt.
“How many of the Silicon Valley folks who lobbied Congress + Trump to cause this crisis are willing to admit they were wrong?” wrote Ms Ocasio-Cortez. “I haven’t seen a single one of these guys crying for a bailout take a single ounce of accountability for their actions. It’s honestly shameless.”
As much of Washington’s serious political thought was consumed by the debate over what to do in response to the second-largest bank 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 launching meaningless accusations at SVB executives accusing them of focusing on a “woke” ideology rather than managing their clients’ risks appropriately; the only evidence for this seemed to be LinkedIn postings about company diversity initiatives that are commonplace 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, and fresh off making widely-panned comments suggesting that the president’s dead son should have been indicted for campaign finance violations, was on Fox News this weekend making nonsense claims about SVB’s supposed wokeness.
He was far from alone, as Donald Trump Jr and a number of other Fox News talking heads like Bernie Marcus and Todd Starnes joined in the dogpiling.
“SVB is what happens when you push a leftist/woke ideology and have that take precedent over common sense business practices,” said Mr Trump Jr, who just recently was in Washington for the three-day CPAC conference where he spoke and hosted his podcast.
“This won’t be the last failure of this nature so long as people are rewarded for pushing this bs,” he added.
“I think that the Administration has pushed many of these banks into more concern about global warming than they do about shareholder return,” Mr Marcus said on the right-wing network.
