Closing summary
The United States came close to a financial crisis caused by the collapse of Silicon Valley Bank, Treasury secretary Janet Yellen told senators today during testimony where she outlined the government’s response to the institution’s sudden insolvency. Elsewhere in the Senate, lawmakers began the process of repealing the legal authorizations for America’s wars with Iraq, including the invasion that toppled Saddam Hussein 20 years ago. Joe Biden says he supports the repeal effort, as do some Republicans, but it’s still unclear if the measure has enough support to make it through the House.
Here’s what else happened today so far:
First Republic Bank is the latest US financial institution in trouble, prompting a rescue effort by the federal government and other banks.
House Republicans are creating a committee to investigate the committee that investigated the January 6 insurrection.
Marianne Williamson, who is again running for president as a Democrat, is all about love and compassion publicly, but is “terrifying” behind the scenes, her former staffers say.
Donald Trump and Ron DeSantis’s looming showdown might not be so great for Republicans, some lawmakers fear.
Sorry, conservatives: “woke” policies are not to blame for the recent bank failures, a fact check says.
At the start of the week, some Republicans reacted to the failure of Silicon Valley Bank (SVB) by claiming it was a consequence of “woke” policies gone wrong, and pointing to the bank’s public sustainability goals and support for progressive causes as fueling its insolvency.
There’s no evidence the bank’s efforts had anything to do with its failure, the Associated Press reports. In a fact check, the AP says that SVB’s failure to invest properly as interest rates rose, along with increasing cash demands from the tech and venture capital firms that made up its deposit base, caused its collapse last week.
As for conservatives’ claims of death by wokeness, the AP says they don’t hold water:
The institution’s fall had all the hallmarks of a “classic run on the bank,” Peter Cohan, a professor of management practice at Babson College in Wellesley, Massachusetts, said in an email. “A focus on DEI had nothing to do with the collapse of SVB.”
Rodney Ramcharan, a finance professor at the University of Southern California’s Marshall School of Business, agreed, dismissing criticism that the bank reportedly donated millions to BLM and similar groups over the years as “trivial and irrelevant,” given the bank had more than $200 billion in assets before it failed.
It’s not even clear the bank donated more than $70 million to those causes, as social media users and conservative news outlets claim. Many cite a database maintained by the Claremont Institute, a California-based conservative think tank, that purports to track donations to the “BLM movement and related causes.”
The institute database links to several SVB company reports and press releases to support its tally, but an Associated Press review shows none of the documents actually mention Black Lives Matter or BLM. In fact, the majority of the documents deal with the bank’s environmental and sustainability efforts.
Spokespersons for the institute and BLM didn’t respond to emails seeking comment Thursday.
