The complexities around, and solutions to, the current banking crisis lie well beyond my core competency, so I'll leave those matters to others. What I will say is that it's indisputable that much of the upheaval can be traced back to the Biden administration's disastrous inflationary policies, which have forced the Fed to hike up interest rates as a form an anti-inflation 'chemotherapy' for the overheated US economy -- actions that have, in turn, directly and heavily contributed to unpleasant externalities like the collapse of Silicon Valley and Signature banks. Biden and his team were directly warned about the highly risky spending they were jamming through in partisan, Democrat-passed behemoths, including by respected Democratic economists. They didn't listen, then pretended the warnings never happened once the resulting "transitory" inflation was undeniably non-transitory after all.
As we learned earlier this week, the inflation problem remains extremely painful and stubbornly persistent. Experts have suggested that the Fed stopping or slowing rate increases could reduce pressure in the banking sector at the moment, but still-high inflation remains untamed. It's a 'pick your poison' scenario, with inflation at the root of all the economic evil. Here's an Obama administration economist illustrating how core inflation has actually now been trending in the wrong direction for several months:
Here is what Core CPI looks like, it has increased for three straight months. pic.twitter.com/IqLwaBQIym
— Jason Furman (@jasonfurman) March 14, 2023
This is undeniably linked not only to Americans' pain, but to the recent bank collapses:
. @jbarro mentioned it earlier but "Biden spent too much, there was inflation, and now high interest rates are creating unexpected problems" seems like a pretty straightforward critique that we were not hearing a lot over the weekend https://t.co/xRk9WHwW0r
— Benjy Sarlin (@BenjySarlin) March 14, 2023
This effective criticism also "has the benefit of being true," notes National Review's Charles Cooke. The Biden administration's clumsy, partisan, blame-storming response, advanced by the president himself on Monday morning (when he made the apparently rare sacrifice of being up by the crack of nine), was that SVB's failure was aided by Trump-era deregulation. That claim put quite a few Democrats who supported those changes in a difficult position. If they want to reflexively blame the last crew, as they falsely tried to do on the East Palestine derailment, they're also exposing members of their own party:
Blame Game: Biden blames Trump for Silicon Valley Bank failure@guypbenson reacts on #SpecialReport #FoxNews #SVB #SVBCollapse #Trump #Biden pic.twitter.com/YbArydrZmY
— The Guy Benson Show (@GuyBensonShow) March 15, 2023
Tom Carper says he doesn’t regret voting for 2018 bank deregulation bill. He called for hearings into SVB collapse.
— Igor Bobic (@igorbobic) March 14, 2023
“Standing here right this moment, no. We should find out what went wrong, why did it go wrong, how do we fix it, how do we make sure it doesn’t happen again.”
“The reason why I voted for that bill is that my community banks really needed it,” Kaine said
— Igor Bobic (@igorbobic) March 14, 2023
They're at least owning their decisions and denying the narrative. That's less embarrassing than this shamelessness, from an MSNBC host:
https://t.co/bwuwE6tkB0 pic.twitter.com/HNpGRfIHP5
— Bonchie (@bonchieredstate) March 12, 2023
The deleted tweet this screenshot was addressing was from Ruhle a few days ago, blaming Republican deregulation for what happened. Deregulation she publicly supported at the time, calling it a great idea. Fun times. I'll leave you with my favorite quote of this whole ordeal, by far, from former Congressman Barney Frank. This guy and his nutty policies relating to mortgage loans were a big reason why the 2008 collapse happened. Then he rushed in with a big government "solution" ('Dodd-Frank') to the problem he helped create. And this is his brand new response to being challenged over what critics say is a violation of the spirit of his own bank regulations. Just spectacular:
"Former US congressman Barney Frank, an architect of landmark legislation designed to make the banking system safer, has defended his decision to take a job on the board of failed Signature Bank, saying 'I need to make some money.'" https://t.co/KTRBQISr1W
— Lachlan Markay (@lachlan) March 15, 2023
In an interview with the Financial Times, Frank said he was disappointed that Signature had been closed down and “chagrined because obviously people will say, ‘Oh, hey mister, you told everybody else how to run a bank and the bank you were helping run failed’.” But the Democrat said he had no regrets about joining Signature’s board. “I worked as a member of Congress for a certain objective. And then having retired, not having a pension by my choice, not wanting to be a lobbyist for reasons personal, I need to make some money...I do it in part by writing. But I also do it by joining boards. Logically, I’m asked to join boards on subjects with which I was identified.” He said he also joined Signature to advance funding for affordable housing.
His "affordable housing" ideas, of course, were a major feeder of the 2008 financial catastrophe, which he neatly blamed on Bush and the Republicans, naturally. But hey, the guy needs the cash. Absolutely perfect, Barney. No notes. I guess when you are caught with a brothel being run out of your home, and you lie about it, then you stick around in Congress anyway -- for decades -- having a healthy sense of shame isn't really your thing.
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