President’s cavalier spending creates banking crises and financial chaos
“Economists worldwide told President Joe Biden his unbridled spending would be disastrous for America,” writes columnist WIlliam Haupt III.
“Balancing the budget is like protecting your virtue; you have to learn to say no!” – Ronald Reagan
Liberal media is searching for explanations why the Silicon Valley Bank collapsed when the reasons are on President Joe Biden’s back.
In two years in office, our national debt has grown by $3.8 trillion. Since 1929, it took the U.S. 61 years to amass that much debt. While big spenders are Democrats, President Biden has the temerity to blame the GOP for the fiscal chaos that his cavalier spending created.
The collapse of major financial institutions is only beginning since President Biden’s reckless spending and historic inflation have caused financial havoc across America and the world. And he is castigating the economic policies of the last two decades for this financial mess.
Yet it was Joe Biden and Barack Obama who gave us Dodd-Frank and an alphabet of regulations to prevent a repeat of the crisis of 2008.
Contrary to President Biden’s rhetoric, he inherited an economic recovery in “overdrive” from Donald Trump. It was Mr. Biden’s policy bungling that drove America backward into a brick wall of malaise and stagflation. It was Mr. Biden’s unnecessary COVID checks that resulted in too many dollars chasing far too few retail products.
“I am not responsible for this economic crisis. It was left at my doorstep.”
– Joe Biden
When news reached Wall Street that Silicon Valley Bank went belly up, stock prices plummeted for more than 20 regional banks
When news reached Wall Street that Silicon Valley Bank went belly up, stock prices plummeted for more than 20 regional banks. America’s four largest banks — Wells Fargo, Bank of America, Citigroup and JP Morgan — took huge hits on the stock market.
Hedge fund guru Bill Ackman predicted doom and gloom for the economy if the Fed doesn’t bail out these regional banks and all of their investors.
President Biden said his advisers will conduct an investigation into these historic bank failures and hold those accountable for this unprecedented financial crisis. The first place he should look is in the mirror. His lunatic spending and demand for corporate diversity hiring is responsible for this fiscal mess.
In 2021, former Clinton and Obama economic consultant Larry Summers warned us that Biden’s $1.9 trillion spending spree, the American Rescue Plan, was a severe economic threat and called it the worst economic policy in 40 years. Economist Steven Rattner said it was U.S. financial suicide and a gift he’d regret.
“Charity is no part of the legislative duty of the government.”
– James Madison
President Biden’s economic advisers as well as foreign economists recognized his profligate spending of tax dollars would trigger runaway inflation and a huge increase in debt. They told him he’d destroy the economy and the Fed would be forced to raise interest rates sky-high to bail him out. President Biden ignored these experts and spent trillions of tax dollars on programs to fulfill numerous campaign promises.
His American Rescue plan fiasco was followed by an infrastructure and green energy spending bill he sold to Congress and the voters as an “Inflation Reduction Act?” Again, this was nothing more than political payback to the electric car companies and environmentalists in progressive California.
“By the year 2035, we plan to make all gas-powered cars obsolete in California.”
– Gov. Gavin Newsom
California’s Silicon Valley Bank was the first to fail from Biden’s slipshod spending and its resulting inflation. It’s hard to ignore that SVB is in the heart of liberal California, whose investors also bankrolled President Biden’s campaign. And they have been forced to withdraw millions from SVB to pay expenses and meet payroll since Biden-Flation has drastically increased wages and their cost of doing business.
When Biden overheated the economy with money and paid people not to work, this was a recipe for disaster. Liberal big tech companies flooded SVB with deposits, and in turn they invested them in low yield treasury bonds. What seemed like easy money at the time became “financial harakiri.”
While the Federal Reserve kicked back and watched inflation grow higher than Jack’s magic bean stock, the cost of everything grew with it. When inflation didn’t just go away as President Biden predicted, the Fed finally had to raise interest rates to tame raging inflation. Tech sector investments soon dried up and SVB’s holdings tanked. SVB’s embarrassed chief risk officer abruptly resigned in May 2022.
It took nine months for SVB to find a chief risk officer. By then, new deposits flattened out and more cash was going out than in. SVB’s president, a far left liberal advocate for diversity and reducing global warming, was more focused on achieving continuity with President Biden’s social mandates than his bank’s business. He didn’t realize the extent of their financial exigency until it was too late to try to fix it.
“When a man is out of sight, it is not too long before he is out of mind.”
– Victor Hugo
According to Bloomberg, SVB was the highest-paying publicly traded bank in 2020. In total, their employees averaged bonuses of $250,683 a year. Just hours before bank assets were seized by the Federal Banking Commission, employees received their yearly bonus checks. The size of each bonus could not be determined, but associates averaged $12,000 and managers about $140,000.
The Financial Stability Oversight Council was crafted after the 2008 financial crisis to monitor the financial status of American banks and sound the alarm if they anticipated threats to their solvency. The nation’s top financial wizards — Treasury Secretary Janet Yellen, Gary Gensler of the Securities and Exchange Commission and Federal Reserve Chair Jerome Powell — are the directors and officers.
At the council’s last meeting, there was no discussion of America’s economic issues caused by inflation. No board members identified “one” financial or banking risk that was a true threat to U.S. financial stability. Their biggest concern was the enormous expense of reversing global warming.
“Sometimes it requires government intervention to make everything work properly.“
– Treasury Secretary Janet Yellen
Plato told us, “The greatest tragedy is men who refuse to see the light.” Economists worldwide told President Joe Biden his unbridled spending would be disastrous for America. They said it would infect the social and economic health of other nations. America’s financial markets are in turmoil along with other global nations. Biden-flation is contagious and life has gotten more expensive around the world.
Big Tech does its best to limit what news you see, and none of them blew the whistle on SVB even though they saw signs that the bank was failing a year ago. Since they benefited most by President Biden’s spending, they took the money and ran with it. California Gov. Gavin Newsom praised Mr. Biden for giving billions in support of their electric car industry. Now taxpayers nationwide are paying dearly for it.
President Biden destroyed the American and global economies when they were rebounding nicely from the pandemic. The longer he is in office the more damage he’ll do until taxpayers shred his checkbook.
“The first lesson of economics is scarcity: There is never enough of anything to satisfy those who want it. The first lesson of politics is to disregard the first lesson of economics.”
– Thomas Sowell
William Haupt III
The author is a Center Square contributor
