The author lives in Santa Barbara
Wait! More bank closures and failures?
My wife Terre told me this morning (March 14) that the bank of Montecito was closing today because of the storm and possible floods heading our way. We both said: “Oh, no! Are they insolvent too?” But — whew — just an atmospheric river event, not insolvency!
However, the creepy news is that the Silicon Valley Bank and other banks just crashed because of a “liquidity crisis.” But wait! Didn’t we just have the big Crash of 2008? But wait! Didn’t we have a big crash in 1929, followed by the Great Depression?
But wait. Didn’t we solve the banking crisis situation with the Dodd-Frank bill passed after the 2008 crash? That law would have prevented this crash. However, mysteriously, that law was repealed.
Before I get to why, I also want to mention that the bank board and executives of Silicon Valley Bank also gave themselves a fecal-matter-load of bonuses when they knew the bank had crashed, but just before the adults in the government took over and guaranteed the depositors’ money. Just like what happened in 2008.
I am getting to the part about why all this happened, but first we have to discuss why some people say they “hate big government.” I am sure some of the depositors in those banks “hated big government,” but they will have no problem accepting the deposits that the government protected for them! Many politicians ran on the “hate big government” campaign slogan — to get elected to that government!
So, now to the question of why these crashes keep happening and will keep happening. The Dodd-Frank bill, made law in 2010, was repealed in 2018 because the Republican president and Congress decided to repeal it.
This is not an article to trash Republicans. It is meant, however, to question the people who own banks and the executives who run them — and, specifically, those who got the bonuses.
Those owners, executives and other rich people will always fund and vote for those who will protect their money. They fund elections of those who run on “hate big government” and “tax breaks for the rich” platforms. But they are those who, when elected, clearly love the part of “big government” that gives them their salary, status, and capacity to pass laws that serve the rich.
Does all this connect? If not, what is your explanation of the repeal and this crash?
This leads to a deeper level of question: Why does it seem that people with a lot of money are so interested in protecting it and getting more? The only thing I can figure is that — bluntly — they don’t have a life. They don’t see any purpose to life other than: “If I can only double my money, then I will be happy!”
Maybe more accurately for some, the attitude is: “Don’t touch my money, and then maybe I will think about a world that works for everyone. If not, maybe my kids will do it with the money and values I will have left them.”
If all of this sounds naïve to you, please tell me your thoughts. To what end or purpose do we accumulate? Why is “more” often the only answer to life? I wrote an article recently about the man who died with 2.3 billion screwdrivers. Why would somebody want to accumulate that many screwdrivers? Or more to the point, why do people who are going to die want to accumulate more and more money?
I can’t think of any reason other than this: We want to avoid death and the thought of death. The game we invented in order to avoid the reality of death is called: Accumulation. Games are made up, invented. They are based on a pretense, for example, that getting a ball through a hoop more times than the other team does, is very important. It is!
Or so it seems at the moment — not only to the team playing but to millions of “supporters”! Those who are good at hoops, by the way, make a lot of money as well!
The pretense that money is what is important in the big game of life-and-death is why big money flows to the election campaigns of politicians who protect the game. Some politicians also like to accumulate a lot of it themselves!
To summarize: We play the game of doubling “our” money as many times as we can, to avoid realizing that we are not going to be here forever. We pretend that life is about: “more.” Money is the scorecard.
That’s my simple explanation of why we will continue to have bank crashes. What’s yours? What’s in your personal, deep-pocket wallet?
Frank Sanitate taught high school English for five years over a half-century ago! He has published three books and had a successful seminar business for 40 years.
You can reach Mr. Sanitate through firstname.lastname@example.org.