Biden forced to save a banking system – and his donors – he put at risk

Opinion

editorial

By the post office

March 13, 2023 | 15:22

President Biden loves to take credit where it’s not due. His latest?

“Thanks to my administration’s swift action over the past few days, Americans can have confidence that the banking system is safe,” the newspaper snarled Monday morning of his administration’s extraordinary move on Sunday to make the depositors of Silicon Valley Bank, far above FDIC-insured amounts to prevent possible systemic failure.

Firstly, it has been less than two days — far too early to tell if the broader danger is over.

Worse, this “Joe to the rescue” schtick is completely sincere. Biden’s dismal economic leadership got us here.

He dumped trillions into an economy that was already running hot in 2021. As inflation headed for the stratosphere, the White House first dismissed it as “transient,” then frantically tried to shift the main blame to Russian President Vladimir Putin and greedy companies for the price increases punish ordinary Americans.

The resulting rate hikes as the Federal Reserve moved belatedly and aggressively to tame inflation cratered the value of SVB’s “safe” long-term investments; when payouts forced premature liquidations, the excessive bank (yes, SVB management also shares the blame) was finished.

Meanwhile, Biden’s Treasury secretary has been busy trying to negotiate a global deal on higher taxes worldwide, while his other financial supervisors have focused on pushing social justice priorities (including his energy price hike “climate change” agenda) on business.

A sign of how skewed priorities have grown: Team Biden is emboldened pension scheme managers to use woke metrics for investments instead of seeking the best return.

And SVB listened. The bank committed about $5 billion to support “sustainable financing and carbon-neutral operations” by 2022; one of its risk management honchos used her time to launch Pride Month celebrations as her employer rushed towards the cliff edge.

That — and the fact that many of its contributors are tech companies that overwhelmingly give to Dems — explains how quickly Biden moved to help them. It is the “small businesses” he promises to protect.

This bailout will eat up a massive chunk of the FDIC’s insurance fund; the cost of refilling it will decrease Other things banks. And guess who pays thereafter? Average consumers via increased service charges.

Biden (before leaving for a West Coast fundraiser) demanded that Americans look at these bank crashes in a “broader context.”

Please do: The correct “context” is that this is largely the result of Biden’s preferred economic policies.