The Country Where Economic Freedom Has Grown the Most Over the Last Two Decades

Vietnam is on the path to becoming one of the world’s most vibrant economies. No country of comparable size has gained as much economic freedom since 1995.

Vietnam continues to gain economic freedom, as confirmed by the latest edition of the Heritage Foundation’s Index of Economic Freedom ranking.

The Index ranks a total of 176 countries based on how economically free or unfree they are. The comprehensive rating is based on twelve categories of freedoms. The Index divides countries into five groups, the best of which is “free” (and includes Singapore, Switzerland, Ireland, and Taiwan); the worst is “repressed” (with countries like Venezuela, Cuba, and North Korea).

Vietnam’s economic freedom score is 61.8, making its economy the 72nd freest in the 2023 Index. Its score is 1.2 points better than last year. Vietnam ranks 14th out of 39 countries in the Asia–Pacific region, and its overall score is above the world and regional averages.

What is most important, however, is not just the most recent score, but the change in the ranking over time: no country of comparable size in the whole world has gained as much economic freedom as Vietnam since 1995. Back in 1995, when the Index was first compiled, Vietnam scored a meager 41.7 points. In the intervening years, Vietnam has gained 20 points. By comparison, China had 52 points in 1995 and has gone on to lose almost four points since then. With a score of 48.3 points, China is now only 154th out of 176, a full 82 places behind Vietnam.

The US only just scrapes into the second-best of the five categories (“mostly free”, rank 25). There are now 16 countries in Europe alone that are economically freer than the US. If the United States were to lose just one more point in next year’s ranking, it would find itself in the “moderately free” category. The US has progressively dropped down the rankings in recent years.

The Heritage Foundation writes about Vietnam: “Capitalizing on its gradual integration into the global trade and investment system, the economy is becoming more market-oriented. Reforms have included partial privatization of state-owned enterprises, liberalization of the trade regime, and increasing recognition of private property rights.”

Vietnam secures strong ratings in the areas of “Fiscal Health” and “Government Spending,” and moderate ratings for “Business Freedom” and “Monetary Freedom.” Vietnam rates poorly for “Government Integrity,” “Judicial Effectiveness,” “Property Rights” and “Investment Freedom.”

If Vietnam continues on the path it embarked on in 1986 with the Doi Moi reforms, it has a good chance of becoming one of the world’s economically strongest countries. Before the economic reforms began, every bad harvest led to hunger, and Vietnam relied on support from the UN’s World Food Program and financial assistance from the Soviet Union and other Eastern Bloc countries. As late as 1993, 79.7 percent of the Vietnamese population was living in poverty. By 2006, the rate had fallen to 50.6 percent. In 2020, it was only five percent.

Vietnam is now one of the world’s most dynamic countries, with a vibrant economy that creates great opportunities for hardworking people and entrepreneurs. From a country that, before the market reforms began, was unable to produce enough rice to feed its own population, it has become one of the world’s largest rice exporters—and a major electronics exporter.

If it is to become one of the economically strongest countries in the world, Vietnam needs to make sure that its people do not forget why it has been so successful: increasing recognition of private property rights, more economic freedom, and greater integration into the global trading system.

Many countries today are doing the exact opposite and restricting economic freedom; Vietnam should aspire to gain ever more economic freedom.


Dr Rainer Zitelmann

Dr. Rainer Zitelmann is a historian and sociologist. He is also a world-renowned author, successful businessman, and real estate investor.

Zitelmann has written more than 20 books. His books are successful all around the world, especially in China, India, and South Korea. His most recent books are The Rich in Public Opinion which was published in May 2020, and The Power of Capitalism which was published in 2019.

EDITORS NOTE: This FEE column is republished with permission. ©All rights reserved.

Biden’s First Veto Mandates Environment, Social and Governance (ESG) Investing Of Our Retirement Savings

Biden vetoed a bill that would have stopped your retirement savings being used to fund political woke activism. We are being forced to fund our own destruction.

By what right does the government command our retirement money to fund their lunacy?

Biden issues first veto of his presidency over influence from ‘MAGA Republicans’

By Anders Hagstrom | Fox News

President Joe Biden vetoed a bill for the first time in his presidency on Monday, arguing that the legislation was overly influenced by “MAGA Republicans.”

The Republican-led legislation prevented Biden’s administration from taking environmental, social and corporate governance (ESG) issues into account when making investment decisions. GOP lawmakers argue ESG is a measure of a corporation’s loyalty to “woke” cultural movements and should not be taken into account.

“I just vetoed my first bill. This bill would risk your retirement savings by making it illegal to consider risk factors MAGA House Republicans don’t like. Your plan manager should be able to protect your hard-earned savings — whether Rep. Marjorie Taylor Greene likes it or not,” Biden announced in a Monday tweet.

The bill specifically ended enforcement of a new Labor Department rule that urged private retirement plan fiduciaries to consider ESG in their investment decisions.

Read more.



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EDITORS NOTE: This Geller Report is republished with permission. ©All rights reserved.

How Government Lost 15 Million Acres of Public Land in the United States

Non-market allocations of resources are doomed to result in catastrophic waste and mismanagement, evidenced by a recent New York Times story exploring how ‘millions of acres of public lands aren’t really open to the public.’

Leave it to the United States Government to lose track of almost three states worth of public land. Only an institution with so little incentive and ability to allocate resources for the betterment of human wellbeing could instantiate such a catastrophic waste of potential.

The following is a story of an engineer named Eric Siegfried, a Montana man who caught public officials in almost unimaginable levels of incompetence and waste. It is also a cautionary tale about the way extreme misallocations of resources are the predictable outcome of America’s current form of land use governance, which systematically severs control over certain resources from anyone equipped to use them rationally and effectively.

Multiple articles in the New York Times have recently reported on the findings of a group of private hunters and wilderness enthusiasts who have brought attention to millions of acres that nobody previously knew existed. Times article published in February reported that, “Across America, 15 million acres of state and federal land is surrounded by private land, with no legal entry by road or trail. If this so-called landlocked land was one contiguous piece, it would form the largest national park in the country, nearly the size of Vermont, New Hampshire and Connecticut combined.” And, “Most of these inaccessible public lands are in the West, and, until recently, their existence was largely unknown.”

The land was only discovered, according to another recent Times article, because of a smartphone app called OnX. “OnX was born when Eric Siegfried, a mechanical engineer and part-time hunting guide in Montana, decided to make a Google Maps for the wilderness,” the Times reports.

Unlike Google maps, OnX is optimized for use in forests and other wild areas, displaying property lines, wind patterns, fire histories, and other data useful to outdoorsmen but not to ordinary civilians.

Times contributor Ben Ryder Howe writes, “Property data is often inaccurate and outdated, and early in the development of OnX Mr. Siegfried found himself asking, ‘Why is there no nationwide picture of land ownership, of public and private property boundaries, of who owns what?’” And so, according to Howe, “By collating state and county data and putting it on a microchip, Mr. Siegfried turned the project in the scrapbooking room into a company that just received more than $87 million from investors and that understands the American landscape arguably better than the government does.”

Howe points out that, “In answering the question of who owns what, OnX helped bring to light how much public land — often highly coveted — is not reachable by the public.”

Land is highly coveted because it is a form of capital which, if allocated properly, can vastly enrich its owners and other participants in the market.

There are countless ways that individuals, or society generally, could utilize 15 million acres of land. People could live on it, thus increasing housing affordability and expanding the range of available options of where to live. People could convert its raw materials into transportable resources such as lumber or oil, thus improving commodity abundance and lowering the threshold at which the poor could afford to have their needs met. People could employ unique characteristics of its ecosystems to conduct scientific research. Or the land could be preserved in its current state, if its environmental, recreational, and/or aesthetic properties are deemed more valuable. Manifold possible uses exist, many of which can probably only be imagined by the innovators of the future.

It is impossible to know a priori which combination of potential uses are the best allocation of such an enormous supply of capital. But one thing is clear: When so much wealth and potential are on the line, the difference between efficient and inefficient resource allocation is the difference between countless livelihoods saved or destroyed. When housing prices, or food prices, or gas prices, are increased or decreased by the availability or unavailability of a few million acres worth of resources, it can make or break the health and safety of anyone whose current standards of living are near the margin of viability. And even for those well enough above the margin to be unconcerned about basic necessities, changes in the cost of living can still make or break their access to important commodities and opportunities such as a higher education, the ability to start a small business, or any other ambition they might have that requires significant investment.

So how could such a massive amount of potential wealth have been unaccounted for and untapped for so long, and what should happen to it now that it has been discovered?

It is commonly understood, even by avowed socialists as well as arguably Karl Marx himself, that socialist economies are generally less conducive to economic growth than market economies, hence the latter often being dubbed “capitalist.” One primary reason for this is that markets result in a mechanism of resource allocation that maximizes efficiency like no socialist, communist, or fascist economy has ever been capable of. And that mechanism is known as the price system.

The price system is merely the logical consequence of resources being controlled by individuals rather than collectives, and exchanged voluntarily rather than by force. These are the characteristics of a market economy, and they result in consumers and producers having extremely precise knowledge, communicated via prices, of exactly how useful each resource is for a wide range of potential uses, given the nature and scarcity of the resource relative to alternatives. And this precise knowledge allows budgeting, financing, shopping for the best among many available products, and so on to be subject to highly accurate calculations.

This crucial difference between market and non-market economies was first clearly articulated by the economist Ludwig von Mises in his 1920 essay, “Economic Calculation in the Socialist Commonwealth.” In it, Mises offered the following example:

“Picture the building of a new railroad. Should it be built at all, and if so, which out of a number of conceivable roads should be built? In a competitive and monetary economy, this question would be answered by monetary calculation. The new road will render less expensive the transport of some goods, and it may be possible to calculate whether this reduction of expense transcends that involved in the building and upkeep of the next line. That can only be calculated in money. It is not possible to attain the desired end merely by counterbalancing the various physical expenses and physical savings. Where one cannot express hours of labor, iron, coal, all kinds of building material, machines and other things necessary for the construction and upkeep of the railroad in a common unit it is not possible to make calculations at all.”

This point was expanded on by Mises’s disciple, the Nobel Prize winning economist Friedrich Hayek, who gives another instructive example in his seminal 1945 essay “The Use of Knowledge in Society”:

“Assume that somewhere in the world a new opportunity for the use of some raw material, say, tin, has arisen, or that one of the sources of supply of tin has been eliminated. … All that the users of tin need to know is that some of the tin they used to consume is now more profitably employed elsewhere and that, in consequence, they must economize tin. There is no need for the great majority of them even to know where the more urgent need has arisen, or in favor of what other needs they ought to husband the supply. If only some of them know directly of the new demand, and switch resources over to it, and if the people who are aware of the new gap thus created in turn fill it from still other sources, the effect will rapidly spread throughout the whole economic system and influence not only all the uses of tin but also those of its substitutes and the substitutes of these substitutes, the supply of all the things made of tin, and their substitutes, and so on; and all this without the great majority of those instrumental in bringing about these substitutions knowing anything at all about the original cause of these changes.”

Now think of the price system, or lack of one, in the context of Siegfried’s discovery.

When land is privately owned, the price system facilitates numerical comparisons between different possible uses of each plot of land (or useful subdivision thereof), such as people living on it, or excavating it for minerals, or growing crops on it, or conserving its current state—or countless other possibilities.

There is no way of knowing with certainty which is the best use of each plot of land, given the virtually infinite variables such as what alternative resources could be used for each of the possible uses of the land, how scarce and applicable to alternate uses each of those resources are, and so on. And of course, even the price system can’t account for all the variables, given that every event in the world comes with externalities, millions of uncertainties and butterfly effects that constantly shape our perception of the future into reality. But the price system accounts for more of the variables, and does so with more accuracy, than any other system because prices reflect each individual’s specific preferences and needs down to the cent whereas all other systems reflect either randomness or the preferences of some authoritarian subset of the population that has managed to dictate resource allocations according to their preferences while excluding the preferences of others.

(It is worth noting that the assumptions people make about the relative significance of one set of externalities over another tend to be totally unjustified. For example, there is a common assumption that the negative environmental externalities of industrial development such as logging or oil drilling outweigh the positive economic externalities. But it can just as easily be the case that when commodity prices are reduced by such supply increases, the resulting poverty alleviation and wealth creation generates positive externalities, such as more education and technological and scientific research, that outweigh the negative externalities.)

Private land is more likely than land governed any other way to be used for its optimal purpose, because its owner is free to sell it to the highest bidder, and the bidder with the most valuable idea of how to use it will typically be willing to pay the most for it. By contrast, “public” land is doomed to be allocated comparatively suboptimally. Because no individual is free to sell it to the highest bidder, it is instead trapped in its current use by whatever regulatory mire is preventing individuals from optimizing it.

Only in such a mire could the 15 million acres discovered by Eric Siegfried have been so tragically wasted. Individual property owners would almost certainly be too aware of their major assets to lose track of 15 million acres of real estate, because they themselves would be the ones to reap the rewards or punishments of the quality of their capital allocation choices.

Those acres, being “public” and thus illegal for individuals to settle, develop, or cultivate, were of so little use to anyone that nobody even bothered to do the basic research or exploration required to learn of their existence before it was discovered by accident. And all while there are millions of people without basic necessities, such as a peaceful place to sleep or grow food.

This arbitrary and incompetent allocation of 15 million acres should come as no surprise given the economics of public versus private ownership that have been well understood in the context of socialism and capitalism for more than a century. To solve the problem of rampant resource misallocation, the resources should be privatized so that individuals can start freely investing and innovating to make the most out of that which may otherwise be worthless enough to have abandoned completely.


Saul Zimet

Saul Zimet is a Website and Data Coordinator for at the Cato Institute and a graduate student in economics at the John Jay College of Criminal Justice at the City University of New York.

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EDITORS NOTE: This FEE column is republished with permission. ©All rights reserved.

Janet Yellen Says More Bank Bailouts Could Be On The Horizon

Treasury Secretary Janet Yellen said in remarks Tuesday that regulators may insure all deposits at more banks following the Silicon Valley Bank (SVB) and Signature Bank depositor bailouts.

Yellen said the bailouts were essential to safeguard the U.S. banking system in prepared remarks at the American Bankers Association Tuesday, referencing the Treasury Department and Federal Reserve’s actions in guaranteeing the deposits of SVB’s customers.

“Similar actions could be warranted if smaller institutions suffer deposit runs that pose the risk of contagion,” she said.

Previously, Yellen had said similar actions would only take place for banks whose failure could pose a threat to the banking system.

“A bank only gets that treatment if a majority of the FDIC board, a super majority of the Fed board and I, in consultation with the president, determine that the failure to protect uninsured depositors would create systemic risk and significant economic and financial consequences,” Yellen said.

“Treasury is committed to ensuring the ongoing health and competitiveness of our vibrant community and regional banking institutions,” Yellen said, according to CNBC.

U.S. officials are examining possible methods to increase Federal Deposit Insurance Corp. (FDIC) coverage to more deposits as a way to stave off a possible financial crisis, according to Bloomberg.

Staff in the Treasury Department are evaluating if federal regulators possess sufficient emergency authority to temporarily insure all deposits over the $250,000 limit existing on most accounts, following the steps taken to cover SVB and Signature Bank depositors, according to Bloomberg.

As of now, authorities do not believe this move is essential, but they are working on a strategy in case circumstances devolve, according to Bloomberg.

“Since our administration and the regulators took decisive action last weekend, we have seen deposits stabilize at regional banks throughout the country and, in some cases, outflows have modestly reversed,” White House spokesman Michael Kikukawa said, not acknowledging if this step is being investigated, according to Bloomberg.





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How Hi-Tech Israeli Elite Protestors Moved Funds out of Israel — to SVB

EDITORS NOTE: This Daily Caller column is republished with permission. ©All rights reserved.

All content created by the Daily Caller News Foundation, an independent and nonpartisan newswire service, is available without charge to any legitimate news publisher that can provide a large audience. All republished articles must include our logo, our reporter’s byline and their DCNF affiliation. For any questions about our guidelines or partnering with us, please contact

How Hi-Tech Israeli Elite Protestors Moved Funds out of Israel — to SVB

Among the organizers of the ongoing street protests in Israel against the recently elected right-wing government, thinly veiled as protests aganst judicial reform, were two individuals who stoked up the theme encouraging high-tech investors to remove their money from Israel.

Organized under the banner of a Marxist-sounding title, the ‘High Tech Workers Resistance’ have been lobbying to move hi-tech initiators and their money out of Israel in the cause of fighting for Israeli democracy.

Can anything be more Jewishly woke than that?

According to the Tablet magazine, one of the protest leaders, Gadi Moses (no relation to the biblical hero), happens to be the Israeli director of the Silicon Valley Bank.

I think you can see where this is heading.

Moses was one of the noisiest in encouraging Israeli entrepreneurs to remove their money from Israel and deposit it in foreign banks such as his SVB vaults.

Bankrupting the Jewish state and encouraging Israel’s innovators to move their money out of the country was, for Moses, his way of safeguarding democracy in Israel.

A case of Moses leading the Jewish people out of their Land and into the wilderness.

He was eagerly followed by Tom Livne, the founder of an AI transcription app company, Verbit, who told the crowd to follow his example by exiting $100 million from Israel and investing it in SVB.

One of the influential groupies was Eynat Guez, the CEO and co-founder of Papaya Capital, valued at more than a billion dollars, who told a protest rally that she was adopting a strange form of patriotism by taking her money out of Israel. And after the SVB crash she tweeted her thanks to traditional Israeli banks, Discount, HaPoalim, and Leumi, for bailing out losers with bridging loans.

So Israeli banks are bailing out hi-tech elites as they bored a massive hole in the hull of the Israeli ship of state but then found themselves adrift in stormy waters when their SVB luxury liner turned out to be their Titanic.

In the meantime, Israel’s Bank Leumi, that began life as the Anglo-Palestine Bank, rescued several Israeli hi-tech companies and investors by using their expertise in moving an estimated $1Billion out of the sinking SVB.

It’s strange how these people claim patriotism as they commit the largest acts of treason Israel has ever witnessed.

There is a biblical reference that came to mind when I pondered the malicious acts of these traitors. It comes from Genesis 12;

“I will bless those that bless you, and I will curse those that curse you.”

Moses, Livne, and Guez are typical of those who deserve to be cursed for the enormous damage they have done to the reputation of Israel by attempting to bankrupt Israel rather than ordering their political idols to do the right thing and get back to the Knesset and make their case in the people’s chamber.

©Barry Shaw. All rights reserved

Biden Treasury Secretary’s Policy Destroys Small U.S. Banks While Bailing Out Chinese Depositors, Experts Say

Once the big four banks control all the money, they will control everything else, including what kind of business you can run, what you can and cannot say on social media, and what opinions you can hold.

This is the biggest power grab since the election rigging of 2020.

Janet Yellen’s Policy Would Destroy Small US Banks While Bailing Out Chinese Depositors, Experts Say

By: Jason Cohe, Daily Caller, n on March 17, 2023

  • Treasury Secretary Janet Yellen’s recent decision to backstop all uninsured deposits at two failed banks due to their “systemic risk” to the U.S. economy not only benefits the Chinese Communist Party, but also potentially endangers smaller financial institutions, experts told the Daily Caller News Foundation. 
  • Silicon Valley Bank and Signature Bank both collapsed last week, resulting in a full takeover of the financial institutions by the Federal Deposit Insurance Corporation. 
  • “It’s absolutely atrocious that we are yet again, using taxpayer money to bail out the CCP,” E.J. Antoni, research fellow for Regional Economics at The Heritage Foundation’s Center for Data Analysis, told the Daily Caller News Foundation. 

Treasury Secretary Janet Yellen’s recently announced policy to safeguard all uninsured deposits at failing banks deemed to be a “systemic risk” to the U.S. economy would destroy smaller financial institutions while simultaneously bailing out Chinese depositors, experts told the Daily Caller News Foundation.

Yellen, alongside the Federal Deposit Insurance Corporation and Federal Reserve, announced Sunday that all uninsured depositors who held accounts at the now-defunct Silicon Valley Bank (SVB) and Signature Bank would be fully covered, adding that “decisive actions” were needed to “protect the U.S. economy.” SVB was particularly popular among Chinese tech startups, as it provided easy access to U.S. investor funding, CNBC reported.

SVB’s stock collapsed last week amid numerous customer bank runs following the institution’s disclosure of a $1.8 billion net loss on asset sales on the back of high interest rates, forcing regulators to shut down the bank. Just two days later, Signature Bank, a premier lender in the crypto space, was closed by regulators due to “systemic risks,” CNBC reported.

A bailout of uninsured depositors at the collapsed banks benefits the Chinese Communist Party at taxpayers’ expense and could lead to stricter regulatory controls that smaller U.S. banks would be unable to withstand, experts told the DCNF.

“It’s absolutely atrocious that we are yet again, using taxpayer money to bail out the CCP,” E.J. Antoni, research fellow for Regional Economics at The Heritage Foundation’s Center for Data Analysis, told the DCNF. “And so now whenever the government has these knee-jerk reactions, we end up sending dollars where the American people would not like them to go.”

During COVID-19, when the government authorized sending Payment Protection Program loans and unemployment payments, it also distributed taxpayer dollars to individuals in China, Antoni told DCNF. “Anytime the government spends money, they’re by definition spending taxpayer dollars … So taxpayers are ultimately on the hook for all of this.”

In 2012, SVB launched a joint venture with Shanghai Pudong Development Bank (SPDB), resulting in the creation of SPD Silicon Valley Bank Co., CNBC reported. The venture was focused on providing services to tech startups.

Additionally, in the wake of the SVB collapse, lawmakers may seize on the chance to create a restrictive regulatory environment that “small community banks are just not going to be able to withstand,” according to Alfredo Ortiz, president and CEO of the Job Creators Network.

Unlike big banks, smaller financial institutions face greater scrutiny from regulators, Anne Balcer, Independent Community Bankers of America senior executive vice president and chief of Government Relations and Public Policy, told the DCNF.

“There’s almost a disproportionate or heightened scrutiny on the smaller institutions,” Balcer said. “Regulators keep a much tighter leash on the community banks, which is ironic,” because they are less risky than banks like SVB.

Read more.


EDITORS NOTE: This Geller Report is republished with permission. ©All rights reserved.

Silicon Valley Bank Parent Company Files For Bankruptcy

SVB Financial Group, the parent company for California tech lender Silicon Valley Bank (SVB), filed for Chapter 11 bankruptcy protection in New York Friday, the biggest filing of its kind since Washington Mutual Inc. in 2008.

SVB, which was SVB Financial Group’s main business, was taken over by federal regulators after it collapsed due to a bank run last week, with the Federal Reserve intervening to insure depositors. The bank announced it was filing for bankruptcy Friday in a bid to preserve the value of its assets.

“The Chapter 11 process will allow SVB Financial Group to preserve value as it evaluates strategic alternatives for its prized businesses and assets, especially SVB Capital and SVB Securities,” William Kosturos, Chief Restructuring Officer for SVB Financial Group, said in a statement. “SVB Capital and SVB Securities continue to operate and serve clients, led by their longstanding and independent leadership teams.”

SVB is under the jurisdiction of the Federal Deposit Insurance Corporation and not included in the Chapter 11 filing, according to The Washington Post. Bankruptcy offers a court-supervised reorganization to assist SVB Financial Group to find buyers for its assets besides SVB because it is under federal control, according to Reuters.





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EDITORS NOTE: This Daily Caller column is republished with permission. ©All rights reserved.

All content created by the Daily Caller News Foundation, an independent and nonpartisan newswire service, is available without charge to any legitimate news publisher that can provide a large audience. All republished articles must include our logo, our reporter’s byline and their DCNF affiliation. For any questions about our guidelines or partnering with us, please contact

Silicon Valley Bank: The Woke Democrat Cesspool Is Deep And Wide

We’re learning new details about just how big a Woke Democrat cesspool Silicon Valley Bank really was.

The Bank’s political action committee donated primarily to Democrats for 20 years.  One hundred percent of the PAC’s donations went to Democrats in 2020, as well as in 2021-2022.  Last year, the PAC donated to Senators Chuck Schumer and Mark Warner, as well as other Democrat lawmakers.  Chuck Schumer and Maxine Waters said they would return the donations to the PAC or give them to charity.

California’s Democrat Governor Gavin Newsom and his wife were closely tied to the Bank.  In 2021, the Bank gave the Newsom’s nonprofit – California Partners Project – $100,000 at the request, suggestion, or solicitation of Gavin Newsom.  The president of SVB’s investment banking arm was a founding board member of the Newsom nonprofit, so the ties go way back.  That president is still on the nonprofit’s board.  The $100,000 gift was to support the nonprofit’s campaign for California’s gender quota law for corporate boards, a Woke cause if ever there was one.  The Bank tweeted in support of the nonprofit’s effort and proclaimed the Bank and the nonprofit were aligned on getting more women in the boardroom.  The law was later struck down as discriminatory, completely unconstitutional.  No word on whether the Newsoms will return the gift.

The Bank supported another Woke cause, the trained Marxists of Black Lives Matter.  This wasn’t just a pittance – the Bank gave over $70 million dollars to promote the burning of American cities in the summer of 2020, the destruction of the nuclear family as openly declared on BLM’s website, and the promotion of world communism through the global network of offices BLM opened with the generous financial support of Silicon Valley Bank and corporate America.  Black Lives Matter called the report about the $70 million “white supremacy” and distanced itself from the Bank saying it’s just run by “white people”.  Oh, and it also said ending the “gruesome exploitation” of black people will stop further bank failures.  Sure, and I’m the tooth fairy.

The Bank also pledged $5 billion dollars to fund green energy companies.  The Bank’s depositors were bailed out.  Critics called this a “gift to wealthy Democrat donors in the tech sector.”  The critics said there is no way depositors would have been made whole if they had been MAGA Republicans.  The critics also note the Democrat depositors could have purchased additional deposit insurance beyond the FDIC’s $250,000 limit on their own, but chose not to.  Evidently, being in tight with ruling Democrats WAS the insurance plan.  It’s also been noted Chinese firms are among the depositors being bailed out, something Treasury Secretary Janet Yellen has confirmed.  One Chinese company had $175 million in uninsured cash deposits at the Bank, which was just fine with the Democrats who ran the place, which will now be underwritten by higher fees imposed on all American banks for the federal deposit insurance program going forward.

SVB’s board was populated with dyed-in-the-wool Democrats – Hillary, Biden, Obama donors and only one had investment banking experience.  All you needed for the job was to be a good Democrat and to check the right diversity boxes.  What could possibly go wrong?  One board member went to a Shinto shrine to pray after Trump was elected, to get over her grief and shock after Hillary’s defeat.  The Bank crowed it had women, one black, one LGBTQ, and two veterans on the board – check, check, check, and double check.

The Bank’s alignment with Democrats was grand strategy.  “Everyone knew it was the go-to bank for woke CEOs,” one source told the New York Post. “They knew they were aligned politically. The companies SVB loaned money to all had a woke agenda,” the source said.  I can’t wait for one of them to say the strategy is still a perfectly good idea, it just wasn’t implemented correctly at SVB.  ‘We are the ones we’ve been waiting for, so we’ll do it better the next time.’  Isn’t that what they always say about socialism which has failed everywhere it’s been tried?

But that’s the Democrats, for you – corrupt to the core and congenitally unable to align with reality.  Tell me again why they deserve to govern?

©Christopher Wright. All rights reserved.

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RELATED ARTICLE: Silicon Valley Bank Parent Company Files For Bankruptcy

Why SVB and Signature Bank Failed so Fast – and Why the U.S. Banking Crisis Isn’t Over Yet

With over $1 trillion of bank deposits currently uninsured, the banking crisis is far from over.

Silicon Valley Bank and Signature Bank failed with enormous speed – so quickly that they could be textbook cases of classic bank runs, in which too many depositors withdraw their funds from a bank at the same time. The failures at SVB and Signature were two of the three biggest in U.S. banking history, following the collapse of Washington Mutual in 2008.

How could this happen when the banking industry has been sitting on record levels of excess reserves – or the amount of cash held beyond what regulators require?

While the most common type of risk faced by a commercial bank is a jump in loan defaults – known as credit risk – that’s not what is happening here. As an economist who has expertise in banking, I believe it boils down to two other big risks every lender faces: interest rate risk and liquidity risk.

Interest rate risk

A bank faces interest rate risk when the rates increase rapidly within a shorter period.

That’s exactly what has happened in the U.S. since March 2022. The Federal Reserve has been aggressively raising rates – 4.5 percentage points so far – in a bid to tame soaring inflation. As a result, the yield on debt has jumped at a commensurate rate.

The yield on one-year U.S. government Treasury notes hit a 17-year high of 5.25% in March 2023, up from less than 0.5% at the beginning of 2022. Yields on 30-year Treasurys have climbed almost 2 percentage points.

As yields on a security go up, its price goes down. And so such a rapid rise in rates in so short a time caused the market value of previously issued debt – whether corporate bonds or government Treasury bills – to plunge, especially for longer-dated debt.

For example, a 2 percentage point gain in a 30-year bond’s yield can cause its market value to plunge by around 32%.

SVB, as Silicon Valley Bank is known, had a massive share of its assets – 55% – invested in fixed-income securities, such as U.S. government bonds.

Of course, interest rate risk leading to a drop in market value of a security is not a huge problem as long as the owner can hold onto it until maturity, at which point it can collect its original face value without realizing any loss. The unrealized loss stays hidden on the bank’s balance sheet and disappears over time.

But if the owner has to sell the security before its maturity at a time when the market value is lower than face value, the unrealized loss becomes an actual loss.

That’s exactly what SVB had to do earlier this year as its customers, dealing with their own cash shortfalls, began withdrawing their deposits – while even higher interest rates were expected.

This bring us to liquidity risk.

Liquidity risk

Liquidity risk is the risk that a bank won’t be able to meet its obligations when they come due without incurring losses.

For example, if you spend US$150,000 of your savings to buy a house and down the road you need some or all of that money to deal with another emergency, you’re experiencing a consequence of liquidity risk. A large chunk of your money is now tied up in the house, which is not easily exchangeable for cash.

Customers of SVB were withdrawing 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. The drain on equity capital led the lender to try to raise over $2 billion in new capital.

The call to raise equity sent shockwaves to SVB’s customers, who were losing confidence in the bank and rushed to withdraw cash. A bank run like this can cause even a healthy bank to go bankrupt in a matter days, especially now in the digital age.

In part this is because many of SVB’s customers had deposits well above the $250,000 insured by the Federal Deposit Insurance Corp. – and so they knew their money might not be safe if the bank were to fail. Roughly 88% of deposits at SVB were uninsured.

Signature faced a similar problem, as SVB’s collapse prompted many of its customers to withdraw their deposits out of a similar concern over liquidity risk. About 90% of its deposits were uninsured.

Systemic risk?

All banks face interest rate risk today on some of their holdings because of the Fed’s rate-hiking campaign.

This has resulted in $620 billion in unrealized losses on bank balance sheets as of December 2022.

But most banks are unlikely to have significant liquidity risk.

While SVB and Signature were complying with regulatory requirements, the composition of their assets was not in line with industry averages.

Signature had just over 5% of its assets in cash and SVB had 7%, compared with the industry average of 13%. In addition, SVB’s 55% of assets in fixed-income securities compares with the industry average of 24%.

The U.S. government’s decision to backstop all deposits of SVB and Signature regardless of their size should make it less likely that banks with less cash and more securities on their books will face a liquidity shortfall because of massive withdrawals driven by sudden panic.

However, with over $1 trillion of bank deposits currently uninsured, I believe that the banking crisis is far from over.

This article is republished from The Conversation under a Creative Commons license. Read the original article.


Vidhura Tennekoon

Vidhura S Tennekoon is an Assistant Professor of Economics at the Indiana University Purdue University Indianapolis. Vidhura earned his BSc degree in Engineering from the University of Peradeniya and an… More by Vidhura Tennekoon.

RELATED ARTICLE: Silicon Valley Bank collapse: go woke, crash the economy

EDITORS NOTE: This MercatorNet column is republished with permission. ©All rights reserved.

Why We Should Let Bad Banks Fail

Bad banks need consequences. Let them fail.

By now, you’ve likely heard about regulators closing down Silicon Valley Bank (SVB) and now Signature Bank as well.

While I’m not going to go into all the details, the basic story is described well in this article on Seeking Alpha. Essentially, SVB received a large influx of deposits as the Federal Reserve flooded the market with dollars during COVID.

From there, SVB went out and bought government bonds to store that money. But then, the Federal Reserve started enacting policies which moved interest rates up. The problem? As interest rates rose, the bonds SVB purchased in the past declined in value.

Bond prices and the interest rate have an inverse relationship. If interest rates increase, you can earn a higher return on financial assets purchased today. When that happens, bonds issued at a previously lower rate must sell at a discount to compete.

So when rates rose, SVB’s assets (composed largely of old lower-rate government bonds) plummeted in value.

The key question now is, what are we going to do about it?

I have a modest proposal—let them fail.

Allowing banks to fail may sound extreme, but it’s really the most reasonable solution. It’s true there will be some costs if the banks fail. Any time a business fails, other investors tied financially to the company lose.

But here’s the rub—people who invest in bad businesses should lose. SVB’s failure is a reflection of the fact that it was a wealth shredder. It took depositors’ perfectly good cash, and converted it into now severely devalued bonds.

Banks that destroy wealth shouldn’t be allowed to continue to do so indefinitely. And when depositors make a “run” on bad banks, they’re performing a public service.

At this point, a bank bailout not only would mean the taxpayers will be left holding the bag for bankers’ mistakes—it would mean screwing up incentives in the banking industry even more.

To see the incentive problem, consider an example. Imagine a world where, no matter the circumstances, the government will pay to fix cars after every accident. What do you think this would do to the number of car accidents per year? It would sky-rocket.

If you never need fear paying a price for crashing your car, why drive carefully? There is still some incentive to avoid serious accidents due to injury, but the point is this system lowers the cost of risky behavior, and therefore lowers an individual’s incentive to be careful. Economists call this a moral hazard problem.

And this is the primary issue with bank bailouts. If the government sets a precedent that all bank failures will be ameliorated by using taxpayer money, banks will engage in risky behavior which they otherwise would not. Why be cautious with depositors’ money if you get a bailout no matter what?

You cannot have a healthy free market when you privatize the profits and socialize the losses. The taxpayer’s wallet, if treated like common property, will be subject to the tragedy of the commons.

And I don’t just mean that I’m against a formal bailout to save investors. I’m opposed to taxpayer dollars being reallocated to save the bottom line of anyone involved. Some may worry about small depositors, but the FDIC already insures up to $250,000 (regardless of what I or anyone else thinks about that policy), meaning every depositor who has less than that in their account is getting their money back already.

And for the larger depositors? Business deals have risks. We cannot pay people to ignore that fact. If you want to house more than a quarter of a million dollars in any one institution you should be very careful in picking.

If some individual wants to come along and buy SVB or these other failing banks and try to resuscitate them, I invite them to try. Maybe there is a profit opportunity there. But if the choice is between a bailout and letting them fail, the answer is clear to me.

If they can have the profits, they should have the losses as well.


Peter Jacobsen

Peter Jacobsen teaches economics and holds the position of Gwartney Professor of Economics. He received his graduate education at George Mason University.

EDITORS NOTE: This FEE column is republished with permission. ©All rights reserved.

BIDEN BANK CRISIS: Dow Plunges 700 Points, ‘First Domino To Drop’

Stock indexes are on pace for one of their worst days this year.
Woke and broke. And still Biden and the Democrats are pushing, legislating and imposing these fatal polices.

This is the poison fruit of the diversity, equity and inclusion hiring practices that elevates whining whiners and demonizes talent, intelligence and skill.

Life was golden under Trump.

Dow Plunges 700 Points As BlackRock Chief Warns SVB Collapse Merely ‘First Domino To Drop’

By: Derek Saul

U.S. stocks plunged in Wednesday trading as concerns about the health of the global banking industry continued to weigh on the market, with one high-profile Wall Street bigwig cautioning the contagion of Silicon Valley Bank’s failure could spread further than previously anticipated.

Key Facts

The Dow Jones Industrial Average fell 717 points, or 2.2%, by 1 p.m. ET; the S&P 500 and tech-heavy Nasdaq similarly slid 2% and 1.4%, respectively.

The domestic losses come amid broad declines in stocks abroad, with the Zurich-based bank Credit Suisse’s 24% slide to a record low in share prices amid capital concerns headlining the losses.

Also stoking concerns about the fallout of Silicon Valley Bank, Signature Bank and Silvergate Capital’s recent closures was a bleak letter from Blackrock CEO Larry Fink warning the failures could simply be the first “domino[es] to drop” before a potential “cascade throughout the U.S. regional banking sector with more seizures and shutdowns coming.”

Regional bank stocks captained Wednesday’s sinking ship, with share prices of PacWest sinking 20% and First Republic dropping 23%.

Keep reading.


RELATED VIDEO: Economist warns U.S. is ‘on brink of a 2008 style financial crisis’


Tucker Carlson: SVB Bank Failure Could Be An Isolated Incident But Our Leaders Seem To Want To Accelerate It

WOKE AND BROKE: While Silicon Valley Bank Collapsed, Top Exec Pushed ‘Woke’ Programs

‘Rapid Deterioration’: Moody’s Rating Service Downgrades U.S. Banking System

Credit Suisse Stock Plunges To Record Low As Bank Concerns Grow (Forbes)

Another Bank Shutdown, Signature Bank Closed, Barney Frank of Infamous Barney Frank Legislation on Board

Economic Meltdown Looming

Investor Carl Icahn Issues Grim Warning on US Economy

BIDEN’S ECONOMY: Silicon Valley Bank COLLAPSES Following Run on Bank, 2nd Biggest Bank Failure In United States History

Former Treasury Official Says U.S. Banks On Verge Of ‘Nationalization’

A former Treasury Department official said Tuesday that American banks were on the verge of being nationalized following the Friday collapse of Silicon Valley Bank and the government’s response.

“What the authorities did over the weekend was absolutely profound. They guaranteed the deposits, all of them, at Silicon Valley Bank. What that really means — and they won’t say it, and I’ll come back to that — what that really means is that they have guaranteed the entire deposit base of the U.S. financial system. The entire deposit base,” Roger Altman, a former deputy Treasury secretary in the Clinton administration, told CNN host Kaitlan Collins. “Why? Because you can’t guarantee all the deposits in Silicon Valley Bank and then the next day say to the depositors, say, at First Republic, sorry, yours aren’t guaranteed. Of course they are.”


Federal regulators shut down Silicon Valley Bank Friday after its stock price collapsed and customers began a bank run following the financial institution’s disclosure of a $1.8 billion loss on asset sales due to high interest rates, CNBC reported. Depositors who had accounts at Silicon Valley Bank and Signature Bank, which was shut down by regulators Sunday, will be able to fully recover their funds, the FDIC announced Sunday in conjunction with the Treasury Department and the Federal Reserve.

“So this is a breathtaking step which effectively nationalizes or federalizes the deposit base of the U.S. financial system. You can call it a bailout, you can call it something else, but it’s really absolutely profound,” Altman continued. “Now, the authorities, including the White House, are not going to say that because what I just said of course implies that they have just nationalized the banking system. Technically speaking, they haven’t. But in a broad sense, they are verging on that.”

When Collins called Altman’s statements “remarkable,” Altman emphasized that he had not said the banks had been nationalized.

“I said they are verging on that because they have guaranteed the entire deposit base. Usually the term nationalization means that the government takes over the institution and runs it and the government owns it,” Altman explained. “That would be the type of nationalization we have seen in many other countries throughout the world. Obviously, that did not happen here. When you guarantee the entire deposit base, you have put the federal government and the taxpayer in a much different place in terms of protection than we were in a week ago.”




RELATED VIDEO: CNN: Biden just nationalized the banks in the U.S.


How failing banks paved Hitler’s path to power: Financial crisis and right-wing extremism in Germany, 1931-33

Biden Admin Shot Down Purchase Attempts For Failed Bank, Former Trump Official Says

‘Material Weaknesses’: Shares Of Credit Suisse Plunge To Near-Record Low

‘Major Problem’: Investing Guru Raises Serious Concerns Over Future Of American Economy

‘At Some Point Should We Not Do That?’: CNBC Host Questions Rep. Patrick McHenry If US Is Bailout Nation

‘It Didn’t Work’: Scarborough Says Biden Failed To Calm Bank Fears

‘No Sign Of Falling’: Obama Economist Sounds Alarm On Stubborn Inflation

Former Treasury Official Says US Banks On Verge Of ‘Nationalization’

EDITORS NOTE: This Daily Caller column is republished with permission. ©All rights reserved.

All content created by the Daily Caller News Foundation, an independent and nonpartisan newswire service, is available without charge to any legitimate news publisher that can provide a large audience. All republished articles must include our logo, our reporter’s byline and their DCNF affiliation. For any questions about our guidelines or partnering with us, please contact

‘Rapid Deterioration’: Moody’s Rating Service Downgrades U.S. Banking System

It’s coming down fast, folks. Literally and figuratively.

Biden voters have destroyed this country.

‘Rapid Deterioration’: Major Rating Service Downgrades U.S. Banking System

By: Spencer Brown | Townhall March 14, 2023 12:00 PM

Following the biggest bank failure since the financial crisis of 2008, Moody’s Investor Service has downgraded its rating of the “U.S. banking system” in the latest sign that President Biden’s Monday morning attempt to assuage concerns went over like a lead balloon.

Moody’s cuts outlook on entire U.S. banking system to negative, citing ‘rapidly deteriorating operating environment’ – CNBC

Moody’s — one of three major rating entities — downgraded its outlook for the U.S. banking system from “stable” to “negative” on Tuesday morning “to reflect the rapid deterioration in the operating environment following deposit runs at Silicon Valley Bank (SVB), Silvergate Bank, and Signature Bank (SNY) and the failures of SVB and SNY,” Moody’s explained.

In addition to downgrading the entire banking system, Moody’s also issued warnings for several individual banks “with substantial unrealized securities losses and with non-retail and uninsured US depositors” that “may still be more sensitive to depositor competition or ultimate flight” and end up “with adverse effects on funding, liquidity, earnings and capital.”

The unrealized losses, specifically, have become substantial:

View FDIC Unrealized Gains (Losses) on Investment Securities infographic.

The specific institutions being monitored by Moody’s for “potential downgrades” include INTRUST Financial, Western Alliance, Comerica, Zions Bancorp, and First Republic.

Markets, however, did not seem to move much on the news.

Moody’s just cut its outlook on U.S. banking system to negative due to ‘rapidly deteriorating operating environment’

Keep reading.


RELATED VIDEO: Biden: ‘Economy is strong as hell’ despite inflation | Morning in America


‘Material Weaknesses’: Shares Of Credit Suisse Plunge To Near-Record Low

BUSTED AND BANKRUPT: WOKE Signature Bank Called For Trump’s Resignation, Closed His Accounts

10 Things to Know about the Silicon Valley Bank Collapse

HARDER! FASTER! Facebook Fires 10,000 Employees as Woke Goes Broke

‘Major Problem’: Investing Guru Raises Serious Concerns Over Future Of American Economy

‘At Some Point Should We Not Do That?’: CNBC Host Questions Rep. Patrick McHenry If US Is Bailout Nation

‘It Didn’t Work’: Scarborough Says Biden Failed To Calm Bank Fears

Former Treasury Official Says US Banks On Verge Of ‘Nationalization’

EDITORS NOTE: This Geller Report is republished with permission. ©All rights reserved.

10 Things to Know about the Silicon Valley Bank Collapse

This weekend was the most tumultuous for the banking sector since 2008, as an apparently prosperous, mid-sized bank completely collapsed. When the dust settled, federal regulators had taken over management of two banks while several others teetered on the brink.

Needless to say, the incident has deeply shaken Americans’ confidence in the banking industry. To complicate matters, most Americans are busy shuttling their kids to school and earning an honest day’s living (as they should be) — too busy to keep up with the cacophony of opinions firing around industry jargon amid rapidly developing facts. So, for those too gainfully employed to dig through the noise themselves, here are 10 things to know about the mini-crisis in the banking sector that occurred over the weekend.

1. Silicon Valley Bank exploded since 2020 to become the nation’s 16th largest bank.

As the name suggests, Silicon Valley Bank (SVB) was based in Santa Clara, California — otherwise known as Silicon Valley. It operated 17 branches in California and Massachusetts. This location, plus the bank’s startup friendly policies, meant that SVB was the bank of choice for many tech companies, particularly tech startups funded by venture capital, operating in Silicon Valley.

Over the past three years, SVB had more than tripled in size. It began January 2020 with $55 billion in deposits and ended December 2022 with $186 billion. Last week, it had $175 billion. Two factors contributed to its explosive growth. First, COVID lockdowns created a spike in demand for digital technologies, which is exactly what tech startups intend to provide. Second, trillions of dollars in irresponsible federal COVID spending left investors flush with cash to pour into tech startups. Most of the tech startups deposited their extra cash in SVB.

2. SVB over-invested in long-term public debt.

However, the dirt-cheap interest rates at the time made it hard for SVB to make all that dough rise. You’re likely aware that banks don’t bury your deposits in the ground like the worthless servant (Matthew 25:25-27); they lend most of it out again at interest, which is how banks stay in business. But SVB couldn’t lend all those billions of dollars out with everyone already flush with cash, so they opted instead to purchase long-term, U.S. government bonds and notes. SVB purchased $80 billion in 10-year U.S. Treasury notes, along with other public debt.

U.S. treasury notes, bills, and bonds are the primary way that the U.S. Treasury finances government deficit spending. These different securities (which differ from each other primarily in duration) are essentially IOUs that yield interest over time and can be redeemed at face value at a fixed future date. For instance, a 10-year Treasury note yields interest every six months and may be redeemed 10 years after it was issued. Once issued, these notes often change hands and are considered safe, reliable assets in an investment portfolio — which means they yield a low but certain return on investment.

Longer-term Treasury notes yield a higher return than shorter-term notes, due to uncertainty about future interest rates. For instance, when SVB was purchasing Treasury notes in 2020, 10-year notes were paying 1.5% interest, while short term notes were paying 0.25% interest. SVB opted to invest heavily in 10-year notes, which paid a higher yield.

Then, in 2022, the Federal Reserve jacked up interest rates to try and combat inflation. The Fed raised the target range for federal funds interest eight times in 12 months, from 0.00%-0.25% to 4.25%-4.50%. Suddenly, SVB’s 10-year loans paying 1.5% interest weren’t so lucrative anymore.

Around the same time, venture capital funding for tech startups dried up, and those companies (many of which take years to become profitable, if they ever do) began to draw on the funds they had stored up in SVB. To cover these withdrawals, SVB had to sell its long-term Treasury notes. But because market interest rates have risen, and the Treasury notes’ interest rate remains fixed, SVB couldn’t find a buyer willing to pay full price for the notes, and it had to sell $21 billion in assets at a loss of $1.8 billion.

3. SVB experienced an old-fashioned bank run.

Once it announced the losses, some investors smelled trouble and began to pull out even more money. Customers eventually withdrew an eye-popping $42 billion, a quarter of all deposits. In a new twist on an old-fashioned bank run, Silicon Valley Bank simply ran out of money to give customers on Friday, and had to shut its doors. SVB was the largest bank failure since Washington Mutual in 2008.

Andy Kessler, analyst with The Wall Street Journal, blamed SVB managers for making three critical mistakes: reaching for yield just before interest rates were set to rise, misreading its customers’ cash needs, and not selling equity to cover losses. “You’re really only allowed one mistake; more proved fatal,” he said.

In response to the bank failures of the Great Recession, Congress in 2010 passed legislation authorizing the Federal Deposit Insurance Corporation (FDIC) to insure “$250,000 per depositor, per insured bank” in case of collapse. (Congress created the FDIC in 1933, in response to the Great Depression, as part of FDR’s New Deal.) The goal was to eliminate or mitigate bank runs by creating a safety net to protect consumers.

However, most of SVB’s depositors (“something like 85% to 90%,” wrote The WSJ’s Editorial Board) had deposits that exceeded that threshold. That’s because most of SVB’s clients were companies or wealthy Silicon Valley types, and not ordinary Americans. The streaming company Roku, for example, had $487 million (26% of its cash) deposited in SVB. Unusually for a post-Great Recession bank, the vast majority of money deposited in SVB was not insured by the FDIC.

4. SVB run takes out Signature Bank, hits other banks hard.

SVB’s abrupt fall hit other medium-sized banks like a shock wave. The hardest hit was New York City-based Signature Bank, another medium-sized bank with many corporate clients above the FDIC insurance threshold. At the end of 2022, Signature had 40 locations and $88 billion deposits. But customers withdrew $10 billion from Signature on Friday, forcing the bank into the third largest bank closure in U.S. history.

Another bank to take a hit was First Republic, a San Francisco-based bank around the same size as SVB, which also had a high proportion of uninsured stocks. Its stock fell hard (as of this writing, it is down more than 60% in value) after it announced that it had gained access to $70 million in loans from the Federal Reserve and JPMorgan Chase. While the announcement likely means the bank will not fail, it also leaves investors wondering whether it was about to fail.

Bank stocks suffered across the board. The KBW NASDAQ index of commercial banks was down 11%, as even the largest, most secure banks took a hit. Some regional bank stocks like PacWest Bancorp, Zions Bancorp, and Comerica were down more than 20%. Many of the stocks grew so volatile that exchanges temporarily froze trading on them. The stock plunge could affect banks’ ability to raise money by selling shares, if they need to do so as a last resort.

5. Feds bail out all depositors, even those above insurance limit.

Federal regulators scrambled over the weekend to respond to the Friday collapse of SVB and Signature Bank. California and New York bank regulators placed SVB and Signature Bank, respectively, into receivership with the FDIC. The FDIC fired the previous executive teams and will essentially run the insolvent banks until it can find private buyers.

On Sunday, the Treasury Department, the Federal Reserve, and the FDIC issued a joint statement on the bank failures, announcing that they were “taking decisive actions to protect the U.S. economy by strengthening public confidence in our banking system.”

“Depositors will have access to all of their money starting Monday, March 13,” they promised, but “Shareholders and certain unsecured debtholders will not be protected.”

“No losses will be borne by the taxpayer,” the joint statement continued. “Any losses to the Deposit Insurance Fund to support uninsured depositors will be recovered by a special assessment on banks, as required by law.”

6. Federal response creates incentives for bad behavior.

This last declaration from the federal agencies amounts to the government taking money from banks that did not collapse, in order to pay off the uninsured deposits from the banks that did collapse. National Review’s Philip Klein wrote,

“Defenders of this decision will try to make it seem as if it’s an extraordinary, one-off decision by regulators, but in practice, it has created a huge moral hazard by signaling that the $250,000 FDIC limit on deposit insurance does not exist in practice. The clear signal it sends is that when financial institutions make poor decisions, the government will swoop in to clean up the mess.”

“Moral hazard” is an economic concept that describes how people will engage in riskier behavior if they are protected from the consequences.

7. Federal government compounds bad policymaking with more bad policymaking.

While SVB executives bear some of the blame for the bank’s sudden collapse, poor federal policymaking played a role, too.

COVID-era lockdowns and excessive deficit spending — including direct payments to individuals kept from working by government policy — helped to create the cash glut that led SVB to grow too big, too fast, with nowhere to reinvest its deposits. These panic-driven polices, which didn’t even make sense at the time, occurred in both 2020 and 2021, under both a Republican and a Democratic president, and many of the spending packages received bipartisan support.

This cash glut also caused inflation, which the Federal Reserve has tried to fight by raising interest rates. Despite the bank collapses, on Monday stock traders said there was an 85% probability that the Fed will raise rates another 0.25% when it meets next week. Like a water skier lifted airborne by one wave and body-slammed by the next, SVB exploded with massive deposits, only to wipe out when massive withdrawals combined with massive interest rate hikes.

Now, federal agencies propose to clean up the damage by guaranteeing uninsured deposits, a signal that these deposits are virtually insured.

8. President Biden signals confidence in banking system.

President Biden briefly addressed the banking issue Monday morning, “Thanks to the quick action of my administration the past few days, America is going to have confidence that the banking system is safe. Your deposits will be there when you need them.”

9. U.S. federal government can do little to boost confidence in banks.

Throughout the 21st century, the U.S. federal government has essentially pledged itself as the backstop for any collapse of the financial sector.

That policy only works so long as the U.S. federal government remains solvent. In a report last month, the Congressional Budget Office projected that the U.S. government will spend more money in interest payments on an ever-growing national debt than on national defense by 2028; it also projected that Social Security will become insolvent in 2033. Meanwhile, a divided Congress is at loggerheads about raising the debt ceiling, which the government hit on January 19, with Democrats and Republicans at odds about whether spending cuts should go along with a debt ceiling increase.

So, it’s worth wondering how much pledges by the U.S. federal government can boost credibility in the banking system. In fact, the latest (2022) Gallup public opinion poll found that a higher percentage of Americans have a “Great deal” or “Quite a lot” of confidence in banks (27%) than in Congress (7%) or the Presidency (23%).

10. Worldly wealth is fleeting, but a Christian can trust in God.

Reading an in-depth explainer about the collapse or tottering of several bank institutions and an emergency response from the federal government has the potential to provoke fear or anxiety in anyone, particularly a person who is cautious by nature. But while there’s room for prudence, a biblical response will not get stuck in that rut.

“No one can serve two masters, for either he will hate the one and love the other, or he will be devoted to the one and despise the other. You cannot serve God and money,” Jesus told his followers (Matthew 6:24). Clearly Jesus means that we should serve God instead of money. But what reasons does he give?

Jesus had just said, “Do not lay up for yourselves treasures on earth, where moth and rust destroy and where thieves break in and steal, but lay up for yourselves treasures in heaven, where neither moth nor rust destroys and where thieves do not break in and steal. For where your treasure is, there your heart will be also” (Matthew 6:19-21). Earthly treasures have a tendency to up and leave.

Proverbs makes the same point, “Do not toil to acquire wealth; be discerning enough to desist. When your eyes light on it, it is gone, for suddenly it sprouts wings, flying like an eagle toward heaven” (Proverbs 23:4-5).

Building your life on worldly wealth is “like a foolish man who built his house on the sand” (Matthew 7:26). It might look just fine while all goes well, but when “the rain fell, and the floods came, and the winds blew and beat against that house,” Jesus said, “it fell, and great was the fall of it” (Matthew 7:27). By contrast, said Jesus, “Everyone then who hears these words of mine and does them will be like a wise man who built his house on the rock,” which “did not fall in the storm, “because it had been founded on the rock” (Matthew 7:24).

Are you trusting your future happiness to a bank’s survival, or to your heavenly Father?

Jesus gives another reason to serve God rather than money: the kindness of God will supply the needs of his children. Consider the birds and the lilies, he said. “If God so clothes the grass of the field, which today is alive and tomorrow is thrown into the oven, will he not much more clothe you?” (Matthew 6:30).

“Therefore,” Jesus applies the lesson, “do not be anxious, saying, ‘What shall we eat?’ or ‘What shall we drink?’ or ‘What shall we wear?’ … Your heavenly Father knows that you need them all. But seek first the kingdom of God and his righteousness, and all these things will be added to you.” (Matthew 6:31-33).


Joshua Arnold

Joshua Arnold is a staff writer at The Washington Stand.

RELATED ARTICLE: Woke Priorities Borrowed Trouble for Belly-Up Bank


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The Washington Stand is Family Research Council’s outlet for news and commentary from a biblical worldview. The Washington Stand is based in Washington, D.C. and is published by FRC, whose mission is to advance faith, family, and freedom in public policy and the culture from a biblical worldview. We invite you to stand with us by partnering with FRC.

Ohio Sues Norfolk Southern Over Toxic Train Derailment

Republican Ohio Attorney General Dave Yost sued Norfolk Southern on Tuesday over a train derailment that set off a massive chemical disaster that has residents concerned about the well-being of their community.

The 106-page lawsuit intends to hold Norfolk Southern accountable for covering all financial costs associated with the Feb. 3 derailment that resulted in hazardous chemicals polluting the air and water, according to the text. The lawsuit cites 58 counts against Norfolk Southern for violating several federal and state environmental laws including state hazardous waste, water pollution control, solid waste and air pollution control laws.

Yost accused Norfolk Southern of several Common Law violations including public nuisance for the chemicals released into the environment, negligence for the operational defects and trespassing for contaminating natural resources.

“Ohio shouldn’t have to bear the tremendous financial burden of Norfolk Southern’s glaring negligence,” Yost said in the press release. “The fallout from this highly preventable incident may continue for years to come, and there’s still so much we don’t know about the long-term effects on our air, water and soil.”

The state seeks civil penalties, compensatory and punitive damages and “for declaratory and injunctive relief, to remedy Defendants’ violations of law,” the lawsuit reads. It requests a minimum of $75,000 in federal damages, although Yost acknowledged in the press release that  “the damages will far exceed that minimum as the situation in East Palestine continues to unfold.”

“The derailment has caused substantial damage to the regional economy of the state of Ohio, its citizens and its businesses,” the lawsuit reads. “The citizens of the region have been displaced, their lives interrupted and their businesses shuttered.”

Norfolk Southern promised to “make it right for the people of East Palestine and the surrounding communities” in a statement sent to the Daily Caller News Foundation.

“We are making progress every day cleaning the site safely and thoroughly, providing financial assistance to residents and businesses that have been affected, and investing to help East Palestine and the communities around it thrive,” the statement read.

The efforts include creating a “long-term medical compensation fund” and “to provide tailored protection for home sellers if their property loses value due to the impact of the derailment,” according to the statement.

The lawsuit also requests Norfolk Southern conduct soil and groundwater monitoring at and near the derailment site and be prohibited from dumping toxic waste in Ohio waterways or at the site.

The Environmental Protection Agency (EPA) was on the scene hours after the derailment and has continued to monitor the air and water quality, according to its website. Residents and workers have reported sicknesses including migraines and nausea since the crash.




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