the Times labels this article as "News Analysis" Don’t Call It a Bailout: Washington Is Haunted by the 2008 Financial Crisis The colossal bailouts after the 2008 collapse arguably saved the global economy, but they also provoked a ferocious popular backlash. https://www.nytimes.com/2023/03/14/us/politics/bailout-biden-financial-crisis.html excerpt: WASHINGTON — On that summer day in 2010 when he signed new legislation regulating the banks after the worst financial crash in generations, President Barack Obama declared, “There will be no more tax-funded bailouts. Period.” Standing over his right shoulder just inches away and clapping was his vice president, Joseph R. Biden Jr. Nearly 13 years later, Mr. Biden, now himself a president facing a banking crisis, appeared before television cameras on Monday to make clear that he remembered that moment even as he guaranteed depositors at failing institutions. “This is an important point: No losses will be borne by the taxpayers,” he vowed. “Let me repeat that: No losses will be borne by the taxpayers.” He could not even bring himself to utter the word “bailout.” Washington remains haunted by the specter of government intervention after the banking sector collapse that triggered the Great Recession, leaving leaders of both parties determined to avoid any repeat of that painful period. The colossal bailouts initiated under President George W. Bush and continued under Mr. Obama arguably saved the global economy but also provoked such a ferocious popular backlash that they transformed American politics to this day. The notion that “fat-cat bankers,” as Mr. Obama once called them, should be rescued by the government even as everyday Americans lost their jobs, their homes and their life savings so rankled the public that it gave birth to the Tea Party and Occupy Wall Street movements and undermined the establishment across the political spectrum. In some ways, that popular revolt empowered populists like Donald J. Trump and Bernie Sanders, ultimately helping Mr. Trump to win the presidency. “Today’s populism is firmly rooted in 2008,” said Brendan Buck, a top adviser to two Republican House speakers, John A. Boehner and Paul D. Ryan, who were both eventually targeted by Tea Party rebels within their own party. “The bailouts not only fostered distrust of corporations, but cemented the notion that elites always do well while regular people pay the price. Bailouts were also followed by a large expansion of government, and while it all may have prevented much worse calamity, the recovery was slow.” Mr. Biden, of course, knows all that intimately. He saw it up close, watching the public uprising from his office in the West Wing while counseling Mr. Obama on how to respond. Even the separate economic stimulus package that Mr. Obama assigned Mr. Biden to manage came to be tainted because many Americans confused it with the bank bailouts. And so now, as he endeavors to head off a crisis of confidence after the failure of three financial institutions in recent days, Mr. Biden wants to avoid not just a run on the banks but a run on his credibility. “The term and the idea of bailouts are still highly toxic,” said Robert Gibbs, Mr. Obama’s first White House press secretary. He said Mr. Biden rightly focused on accountability for those responsible and sparing taxpayers the cost. “Those are two important lessons learned from 15 years ago. Emphasizing that the ones being helped are instead innocent bystanders who just had money in the bank is why a backlash on this action is less likely.” But Republicans were quick to pin both the crisis and potential resolution on Mr. Biden, accusing him of fostering economic troubles by stoking inflation with big spending and labeling government efforts to head off escalation of the crisis the Biden bailout. “Politically, if you ask me what’s the impact of bailing out rich techies in California — which is exactly how this will be played — then the answer is Donald Trump’s likelihood of re-election just went up three to four points,” said Mick Mulvaney, who came to Congress as a Tea Party champion and later served as Mr. Trump’s acting White House chief of staff. more at the link
GOP is haunted by the rollback of Dodd Frank, passed during the Obama adminstration, which requires banks to perform a financial stress test on a regular basis lobbysts---including those representing SVB---convinced Trump to exempt non tier-one banks from Dodd Frank; Trump did in 2018
The Dodd-Frank Banking Rule Rollback ( in 2018) Explained The Dodd-Frank Wall Street Reform and Consumer Protection Act was passed by the Obama administration in 2010 as a response to the 2008 financial crisis. The Dodd-Frank Act's numerous provisions were intended to decrease risks in the US financial system through the establishment of several new government agencies such as the Consumer Financial Protection Bureau. A key component of the Dodd-Frank Act, the Volcker Rule, regulates the way banks are able to invest by limiting speculative trading and eliminating proprietary trading. the partial rollback of Dodd-Frank rules was signed into law by President Trump. This rollback follows years of Republican complaints regarding the financial burden placed on smaller financial institutions, specifically those with assets worth less than $250 million. The tollback bill represents a significant dilution of the Obama-era rules, leaving fewer than 15 big banks in the United States subject to stricter federal oversight. Specifically, the bill raises the threshold under the Dodd-Frank Act for when new capital standards apply to financial institutions from a threshold of $50 billion in assets to $250 billion. Small and medium-sized banks will no longer be required to undergo "stress tests," a measurement that determines their ability to survive a severe economic decline. Because SVB is not subject to the Dodd-Frank; they're not subject to the bank stress tests. which would have alerted banking authorities of SVB's high concentration of its loan porfolio on one customer base, almost exclusively tech startups
Hey look! Let's take two things that are not in anyway related and claim they are. We can also go after lesbians because we have some odd obsession over sexuality! Let's do it! Can we maybe throw in a transexual joke or maybe just take a swipe at some other marginalized group.
LOL..... the worst financial crisis in modern history had a bunch of white men in charge........ The sad part is a lot of you are stupid enough to believe this.
Anyone can look up the leadership team at SVB. Look how "woke" it is! Executive Team and Board of Directors | SVB | Silicon Valley Bank
Kim Olson is Chief Risk Officer for SVB. She is responsible for developing and overseeing SVB’s strategy and framework for global risk management and compliance, including regulatory transformation and relations with financial regulators. Before joining SVB in late 2022, Kim served as Chief Risk Officer for SMBC in the Americas, and an Executive Officer of SMBC and Sumitomo Mitsui Financial Group. This lady made a bad career move a few months ago.
How does a bank failure get convoluted with identity politics? I understand those using it as an opportunity to troll, I just don't understand those who are taking it serious.
it's ok to call a spade a spade in this case. the cost is being passed onto joe consumer one way or another it seems.
Because we have designed a system that funnels everything through a partisan lens. This is life in the manufactured duopoly.
The policies of both parties have some relevance in what happened - but really it isn't something that should be overtly political at this point.
