Who Do You Serve, Who Do You Protect?
Brad Miller, a former congressman from N.C. (2003-2013) who served on the House Financial Services Committee, believes that unsecured SVB and Signature bank customers bailed out by government action will not be chastened by their own failure to self-insure assets exceeding $250k. Instead, “their sense of entitlement will be breathtaking.”
It’s already breathtaking. Americans don’t need to have served on Financial Services to know it.
The bailout decision Sunday will cost President Biden support, a friend retired from the FDIC tells me. And the Fed? They’ve been mismanaging the economy for quite a while.
Biden pledges to hold the bankers responsible for their risk-taking. Management will be fired. Bank investors will lose their money, Biden said this morning. “That’s how capitalism works.”
But the all-knowing, all-seeing Market should also hold the those who mismanaged (largely) venture capital assets by leaving them unsecured with these niche banks should also face consequences. They will not under this government bailout.
“Who Do You Serve, Who Do You Protect?” is a regular chant at protests against police violence. How many Americans already know the answer to that rhetorical question, whether it is law enforcement or financial regulators?
It’s bad enough that politicians on the right are systematically undermining confidence in elections and paving the way for authoritarianism or worse. Federal officials reacting like Pavlov’s dog to squeals from financial elites is adding more straws to a tired camels back.