According to some sources, the term ‘ don’t take any wooden nickels ’ dates back to the 1900s when metal coinage became a standardized American currency. Now that evidence is surfacing of bank executives selling off stock and being paid bonuses before the collapse of Silicon Valley Bank (SVB), conservatives are working hard to circulate wooden nickel answers. With the recent failures of two American banks, SVB and Signature Bank, again, one is reminded of the adage. According to an article in SFGate published March 13 , SVB customers withdrew , ‘ their deposits beyond what it could pay using its cash reserves, and so to help meet its obligations, the bank decided to sell $21 billion of its securities portfolio at a loss of 1.8 billion dollars. The drain on equity capital led the lender to try to raise over $2 billion in new capital.’
Another factor was Peter Thiel’s Founders Fund’s sudden stoppage and complete withdrawal of assets. The SVB CEO [ Greg Becker ] timely stock sale adds to the speculation that something was afoot. Becker made upwards of 3 million dollars selling 12,500 shares for $287 each on February 27 . The average depositor fell victim to panic and boom a bank run. Fortunately, while Becker fell softly to Earth after deploying his golden parachute, President Biden vowed to protect the depositors from a crash landing.
Cue the ridiculous conservative outrage machine. Looking to load their weapons with another culture war bullet, Wall Street Journal opinion columnist Andy Kessler went for the full metal jacket. Blacks, women, and the LGBTQ+ community were the target, and he added veterans for a little flavor to his toxic stew. Kessler wrote that the bank’s board was 45 percent women and had one Black member, one “LGBTQ+” member, and two veterans . Kessler concluded , “I’m not saying 12 white men would have avoided this mess, but the company may have been distracted by diversity demands.” Of course, his written audition for the woke army was a distraction from the Trump administration’s relaxed banking regulations, contributing to the collapse. Mr. Trump’s attempt to separate big bank regulations from community banks had some merit. But like most things Trump, he did not understand his edict’s lack of a stress test for small banks. Therefore a bank with over 210 billion dollars in assets fell between the cracks. The Democrats who voted for Trump’s proposal also bear some responsibility. Much like Mr. Trump’s deregulation of trains was a formula for disaster, Senator Elizabeth Warren foreshadowed bank deregulation disaster. Sen. Warren warned both her Democratic colleagues as well as Republicans about the danger of loosening the reins on banking.
“Without any compelling public policy rationale — other than the deceptive guise of aiding regional and community banks — this bill now seeks to undo key bulwarks of public protection designed to avert future crises,” wrote Phil Angelides , the chair of the Financial Crisis Inquiry Commission, which produced an authoritative report on the causes of the 2008 financial crisis. Democrats are demonstrating banking is a policy debate, while Republicans are scattering the landscape with more trash about who to hate.
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