Biden suffers political blow as banks fail and Trump attacks ‘anti-America policies'
In the wake of the collapse of Silicon Valley Bank (SVB) and amid fears of contagion to other financial institutions, former President Donald Trump has taken direct aim at the “anti-American policies” of President Joe Biden, which he believes have led to the current crisis, as the Daily Mail reports.
SVB's crash came on Friday following a 60% freefall in the price of its shares, which in turn triggered a run on the bank by customers desperate to access their deposits.
WH scrambles to manage SVB fallout
Considering that the disaster at SVB represents the largest failure of a financial institution going back to 2008, it is not surprising that the Biden administration made feverish attempts over the weekend to get the situation under control and – hopefully – prevent fears from spreading to other major banks.
As Fox Business noted, Treasury Secretary Janet Yellen insisted Sunday that the federal government had no intention of bailing out SVB but was contemplating ways to address the “needs” of customers whose deposits exceeded the $250,000 limit insured by the Federal Deposit Insurance Corporation (FDIC).
Speaking on CBS' Face the Nation, Yellen indicated that 2008-style government bailouts were not on the table, saying, “We're not going to do that again,” but noting that solutions for depositors were under discussion.
Yellen continued, “I've been working all weekend with our banking regulators to design appropriate polices to address this situation. I can't really provide further details at this time, but I really want to emphasize that the American banking system is really safe and well capitalized. It's resilient.”
Biden weighs in
Speaking at the White House Monday morning, Biden attempted to reassure Americans that the administration's actions in response to SVB's collapse were not, in fact, a bailout and that covering deposits in excess of $250,000 would come at no cost to them, according to The Hill.
“No losses will be – and this is an important point – no losses will be borne by the taxpayers,” Biden said. “Let me repeat that, no losses will be borne by the taxpayers. Instead, the money will come from the fees that banks pay into the Deposit Insurance Fund.”
Skeptics, however, such as Steven Hayward at Powerline, contend that the administration is simply playing at semantics and that assessments made against banks to cover SVB depositor losses will ultimately be passed on to their customers, i.e., taxpayers, just the same. He also questioned on what legal basis the Treasury Department, the Federal Reserve, or the FDIC could simply decide to disregard the $250,000 deposit insurance limit, asking, “I guess that statutory ceiling was merely optional?”
Biden further suggested that those who were in charge of SVB at the time of its collapse should face significant consequences, saying, “If the bank is taken over by the FDIC, the people running the bank should not work there anymore,” Biden said.
Trump camp blames “anti-America” policies
Though some on the left have attempted to attribute SVB's collapse on Trump-era rollbacks of post-2008 financial regulations, the former president was having none of it, firing back at his successor via a surrogate over the weekend, as the Mail noted.
Trump campaign spokesman Steven Cheung argued that the responsibility for the banking panic lies with “out-of-control Democrats and the Biden administration.”
Cheung further declared that the White House and Biden's party have “pathetically continued to blame President Trump for their failures with desperate lies, such as the CCP balloons, the train derailment in East Palestine and now the collapse of SVB.”
“This is nothing more than a sad attempt to gaslight the public to evade responsibility. The fact is that Biden has presided over a catastrophic economy that has devastated everyday Americans and has caused misery across the country due to his anti-America policies.”
GOP hopefuls enter fray
As the Mail noted, Trump's current opponents for the Republican nomination – Nikki Halley and Vivek Ramaswamy – offered their two cents on the SVB collapse, with both standing against the idea of a government bailout.
Haley took to social media Saturday to opine, “Taxpayers should absolutely not bail out Silicon Valley Bank. Private investors can purchase the bank and its assets. It is not the responsibility of the American taxpayer to step in. The era of big government and corporate bailouts must end.”
For his part, Ramaswamy suggested that SBV should be left to “fully fail” and posited that the best way to prevent additional bank runs in the near future is for the FDIC insurance limit to be raised.
In the meantime, New York state regulators shut down Signature Bank on Sunday, as CNBC noted, and Sunday night, a joint statement from the Treasury Department, the Federal Reserve, and the FDIC pledged to implement yet another “systemic risk exception” that would ensure that its depositors receive full access to their funds regardless of the pre-existing FDIC limit, supposedly doing so at no cost to American taxpayers.