Biden's Banking Busts
Trading was suspended Friday in the stocks of several small banks whose share prices plunged on fears they were in the same situation. On Sunday, New York bank regulators shut Signature Bank.
President Joe Biden created the perfect storm for what may become a string of banking busts. In 2021, he lied about inflation, saying it was temporary and "no serious economist" considered it a threat. Yellen and Federal Reserve Chairman Jerome Powell, whose first term was about to expire, went along with Biden and did nothing to bring down prices. It was the single biggest monetary policy mistake in half a century.
Then in March 2022, newly reappointed Powell launched aggressive rate hiking to cure what the Wall Street Journal called "a mess largely of the Fed's own making." As rates rose fast, startup companies could no longer afford to borrow, and instead started withdrawing their bank deposits. Without regulatory intervention, the downfall of SVB was almost a foregone conclusion.
On March 7, Powell predicted that the Fed will likely "increase the pace of rate hikes" to continue bringing down inflation. A task made more difficult by our spendaholic president's budget proposal, which is an inflation accelerator.
As rates rise, more banks could be in trouble. Continued government incompetence is not an option.
Mr. President, get rid of your woke minions and appoint competent people. Our money and jobs are at stake.
On Sunday night, Biden said he's "firmly committed to holding those responsible for this mess fully accountable." Look in the mirror, Mr. President.
Instead, he's looking at the list of Democratic campaign donors and scurrying to bail them out. Ninety-eight percent of all political contributions from people who worked at internet companies went to Democrats in 2020. Silicon Valley residents coughed up nearly $200 million for Democrats. No surprise that the Treasury and the Fed are offering bailouts, whether they use that word or not.
Biden's reckless spending and incompetent monetary policy are causing this string of banking busts. And John Q. Public will end up paying one way or another.
Betsy McCaughey is a former lieutenant governor of New York and chairman of the Committee to Reduce Infection Deaths. Follow her on Twitter @Betsy_McCaughey. To find out more about Betsy McCaughey and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate website at www.creators.com.
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