Opinion: Bailout of the Tech Bros and redistributing wealth to the wealthy

In her weekly column, Nancy Churchill says you are the piggy bank for government and business elites

Nancy Churchill
Dangerous Rhetoric

On March 13, The Biden administration essentially nationalized the U.S. banking system by rescuing major Democratic technology sector donors and Chinese companies from the consequences of parking billions of dollars (that’s billions with a ‘B’) at an extraordinarily poorly managed bank.

The Biden administration didn’t ask for permission from the voters, and it didn’t ask congress to pass a bill. It simply took advantage of a crisis and promised all depositors (no matter how large) in any bank (no matter what size) would be made whole by the U.S. government in the case of a bank failure.

It’s unclear if the executive branch has the authority to expand the FDIC insurance program beyond the $250,000 threshold, but whatever. Rules don’t apply to our ruling class. Since the mainstream news media is bleating the government line that “this is NOT a bailout,” you can be sure the opposite is true. The administration’s guarantee to depositors IS a taxpayer funded bailout of the biggest, richest “Tech Bro” venture capitalists and some big Chinese companies.

These big, big, big depositors are universally woke, generous donors to our political elites — and when it looked like they were going to go broke in a hurry, they went whining to the administration for a handout. And they got one.

Welcome to the serf class, citizen. You are the piggy bank for government and business elites. This move to nationalize the banking system will turn out to be the most massive transfer of wealth in our history. And the transfer will go from your pockets to the pockets of the wealthy and connected — like Robin Hood in reverse.

Do I exaggerate? I wish.

The administration is spending money we don’t have by creating magic funny money. Our government deficits are massive and getting bigger by the second. This creates inflation, which is the devaluation of your money. By making your money worth less, the government creates a hidden tax.

In addition, Democrats around the country, including our own Governor Jay Inslee, are implementing facets of the World Economic Forum Climate Agenda by limiting energy production, forcing the electrification of new construction, imposing carbon fuel standards and creating electric vehicle mandates. This all creates a cascade of consequences that drives the cost of all goods even higher.

But wait, there’s more! After the free-spending political class did everything possible to CREATE inflation, the Federal Reserve raised interest rates in order to CURB inflation. Sensible people could have told the politicians that the proper course of action would be to reduce spending to curb inflation.

However, that’s not what the Fed chose to do. By raising interest rates higher and higher, the Fed tried to ‘dry up’ the money supply. Bond prices move inversely to yield (interest rate). So, as the interest rates soared, bond prices collapsed. Longer-term Treasuries lost 18 percent in 2022, the worst year ever.

Silicon Valley Bank had heavily invested in treasury notes, which were rapidly losing value. More than 90 percent of SVB’s deposits exceeded the $250,000 insurance cap because most of the bank’s customers were tech startups that had deposits in the tens of millions of dollars. As the technology companies needed to withdraw more of their deposits (because of inflation), the bank was forced to sell more and more of its treasury bonds at a loss. Rumors spread of its weak financial position, and there was an old-fashioned run on the bank.

An opinion piece published in the Washington Times on March 15 correctly notes that “Arbitrarily paying wealthy depositors five or 10 times that amount (the FDIC Insurance limit of $250,000) is as reckless as expecting the $128 billion FDIC fund will somehow cover $240 billion in uninsured deposits. It will bankrupt the FDIC until the FDIC balloons insurance rates for remaining banks, with the costs subsequently passed onto retail banking customers.

“Ultimately the Biden bank bailout is a redistribution of wealth to the wealthy.”

All politics is Local. If you think the U.S. Banking system is an absolute disaster, you have an opportunity to directly impact the conversation by sending your thoughts to our state legislators regarding SJM 8001, concerning a national infrastructure bank. This bill would ask Congress and the President to create a new national bank just to fund infrastructure projects.

Since the U.S. Treasury and Federal Reserve are obviously incompetent, we need to recommend our legislators kill this bad idea in committee. You can comment on the bill or send an email to the members of the House Committee on Consumer Protection & Business. While writing a short letter doesn’t feel like an action that would have much of an impact, don’t let that stop you. Those who want to destroy our country excel at activating their base and showing up. They also are experts in discouraging you from taking action. Don’t let them win. Get in the game. Write or call your state legislators and tell them you oppose SJM 8001.

Nancy Churchill is the state committeewoman for the Ferry County Republican Party. She may be reached at DangerousRhetoric@pm.me. The opinions expressed in Dangerous Rhetoric are her own.