Over the weekend, the United States suffered the second-largest bank failure in history. The consensus view is that Silicon Valley Bank made a huge mistake by borrowing short term and then parking money in long-term bonds. When interest rates rose, assets lost value, and SVB was put in a perilous position.
Joe Biden promises there will be a “full accounting” of the situation and that everyone will be held “accountable.” But that would mean the president taking responsibility for the reckless governance that helped create the environment that made this possible. The Fed wouldn’t have been compelled to aggressively raise interest rates if Biden had acted more like a responsible statesman rather than a cynical partisan.
It’s infuriating reading fluff pieces like Politico’s “How Biden saved Silicon Valley startups: Inside the 72 hours that transformed U.S. banking,” when it was the president and his party, against all common sense and evidence, that helped create the conditions that led to the crisis.
Let’s recall that virtually the entire left-wing political infrastructure — media, politicians, and expert class — was activated to dismiss the concerns of those who warned that inflation was a threat. The reason was obvious: Democrats wanted to cram through as many long-term spending proposals as possible while they held both houses. That had to be done in two years’ time. And it had to be done with the support of Joe Manchin, a senator who would occasionally feign concern about spending.
In 2021, Biden signed the $2 trillion so-called American Rescue Plan,
