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MARCH 14, 2023
Meyerson on TAP
The Reputational Casualties of SVB's Collapse
Silicon Valley libertarianism, every congressional Republican, 50
congressional Democrats-and why are some still sitting on the banking
committees?
The implosion of Silicon Valley Bank has brought with it-or, at least,
should bring with it-the implosion of the reputations of certain key
groups and individuals in America's political and economic
infrastructure. The list begins with SVB's own leaders, of course,
most particularly CEO Greg Becker, who repeatedly urged Congress in 2018
to eliminate the Dodd-Frank regulation requiring midsize banks like his
to maintain a prudent amount of ready money lest nefarious forces cause
a run on the bank. But Becker is just one of a number of public figures
whose credibility just now is at Tucker Carlson levels.
Silicon Valley was already going through a hard time before SVB went
under, as the nation's consumption of digital products declined with
the waning of the pandemic. (Just today, Meta [aka Facebook] announced
it would lay off another 10,000 employees.) But Silicon Valley's
defining ideology-a libertarianism that extolled private markets and
condemned government efforts to regulate them-has been shown to be as
hollow as Marjorie Taylor Greene's head. I won't enumerate all the
pleas to the feds to step up and rescue their deposits from the very
same Valley libertarians who'd been disparaging any governmental role
in the economy as recently as the middle of last week. Michael Hiltzik
in the Los Angeles Times
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and Adam Lashinsky in The Washington Post
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have both done excellent jobs laying out this epic of hypocrisy.
Libertarianism will surely survive this setback; it's as American as
mass shootings. But the one wing of libertarianism with cultural cachet
was Silicon Valley's super-cool version. (Compare and contrast Steve
Jobs and Ron Paul.) Now that version has been shown to be as phony as a
three-dollar bill (for which, doubtless, there is a crypto equivalent).
Reputational damage also attaches to the members of Congress who voted
in 2018 to roll back the keep-cash-handy provisions of Dodd-Frank on
midsize ($50 billion to $250 billion in assets) banks. That list
includes every Republican save one, as well as 33 House Democrats and 17
Democratic senators. None of the Democrats whose districts were even
remotely close to Silicon Valley voted for the measure, nor did
California's senators (Feinstein and Harris). The yes votes came
instead from a mix of the pro-corporate Democrats usually hailed by
centrist publications for their bipartisanship (Virginia's Mark
Warner, West Virginia's Joe Manchin, New Jersey's Josh Gottheimer),
from the senators and representatives of states dominated by banks
(Delaware's Tom Carper, Chris Coons, and Lisa Blunt Rochester), and
from a small number of inner-city representatives doing the bidding of
their cities' midsize banks. A number of those Democrats in both
houses served on the congressional committees that oversaw banking and
thus received ample campaign funding from the banks; those who served on
the Senate's committee, Warner in particular, played a decisive role
in passing that legislation. (Warner won the chutzpah prize of the month
last weekend when he defended the 2018 deregulation on a Sunday talk
show.) Why their fellow Democrats would want to keep these deregulators
on those committees now, given their appalling lack of judgment, is a
good question. There should be some price attached to having lit the
deregulatory fuse in 2018; commendably, Arizona Rep. Ruben Gallego,
currently seeking Kyrsten Sinema's Senate seat, has taken her to task
for voting for the measure back when she was in the House.
And then there's the reputation of the mega-banker who didn't step
up: Jamie Dimon. His bank, JPMorgan Chase, is much the nation's
largest, and best equipped to take over the remaining assets and debts
left by SVP. Old J.P. Morgan himself, it's worth recalling, ended the
financial panic of 1907, in which banks were toppling like tenpins, by
pledging his bank's reserves to stabilize the system, and
strong-arming the heads of other big banks to do the same. Dimon is the
one banker, and Chase the best-suited bank, capable of doing the
21st-century version of that today. It's time for President Joe to
give CEO Jamie a friendly call.
~ HAROLD MEYERSON
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The Economy Could Not Exist Without Government
<[link removed]>
The Silicon Valley Bank collapse exposes a reality that rich people
would prefer to ignore. BY RYAN COOPER
There Are Worse Things Than Mild Inflation
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A shaky banking system, for one. A failure to comprehend how the climate
crisis raises prices, for another. Will the Fed continue to compound the
damage? BY ROBERT KUTTNER
The Filthy Emissions of Railroad Locomotives-and the Rail Unions
Sounding the Alarm
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Diesel engines have gotten a sweetheart deal from environmental
regulators. It's time that changed. BY SARAH LAZARE
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