How many bank failures does it take for America to learn its lesson? (Opinion)
On “Thiessen: Big Government Sets Stage for Bank Collapse” (March 16): Marc Thiessen comes up with the well-worn tagline that the scariest sentence in the English language is “I’m from the government and I’m here to help.” Who would you call Mr. Thiessen if his house caught fire? Firefighters, of course. Oops, it’s the government. The Police Department is also a government agency. Did Mr. Thiessen support the call to defund the police? Obviously not! He is a conservative of law and order and has vehemently opposed the underfunding of the police.
So it seems like getting help from the government isn’t all that scary.
Mr. Thiessen objects to the Federal Reserve Bank’s monetary intervention during the 2008 financial crisis. He probably prefers the no-intervention policy of the Feds in 1929. Oops. That non-intervention led to the Great Depression. Mr. Thiessen also opposes the FDIC guaranteeing deposits in Silicon Valley Bank beyond the $250,000 limit. According to his own reasoning, he should oppose the guarantee of any deposits. Enable depositors to purchase their own deposit insurance. Oops. Mr. Thiessen probably has bank deposits of his own that he doesn’t want to lose.
Governing is difficult. It is made by flesh-and-blood human beings who make mistakes. We need an intelligent debate on the correct relationship between state and markets. But parroting old slogans, as Mr. Thiessen does, will get us nowhere.
Moshe Y. Vardi, Houston
Re “Krugman: Silicon Valley Bank is not Lehman” (March 16): Here we have two fundamentally different perspectives on the SVB’s failure. One by Paul Krugman, a Nobel Prize-winning economist. The other by Marc Thiessen, a politician who once wrote a book in defense of torture. Readers will judge for themselves which comment is the least painful to get past. Personally, I’d rather waterboarding than reading an entire book written by Thiessen. But I digress.
How many times in American history do we have to witness a financial crisis immediately preceded by financial deregulation to recognize that there might be a causal trend? After the Great Depression, the savings and loan crash in the 1990s, the Enron debacle, the 2008 crash, and this most recent bankruptcy, one would think that would be pretty obvious. While I’m by no means an economist, I suppose it’s fair to dispute the FDIC’s intervention to insure beyond the $250,000 limit. But to pretend that the lack of oversight, with the greed and speculation that followed, didn’t play a role? Pure disappointment, torn apart by Occam’s razor. Blaming “Big Gubment” is almost as stupid as blaming wokeness.
But that’s Thiessen’s tendency: He’s an apologist who, for some reason, squirms to excuse bad human behavior.
Robert Campbell, Katy
As for the bankruptcy of SVB, it is totally irresponsible for the FDIC to fully insure all depositors’ money. The purpose of the Federal Deposit Insurance Corporation was to protect the deposits of the common people, not to protect the assets of the wealthy. So now the government rewards bad banking management and imprudent deposit of money. Businesses have options for depositing money other than regular bank accounts. How could a supposedly “smart” company like Roku have about $487 million deposited in SVB? The fat cats are now benefiting from the gains and the government will step in and protect them from their losses. Just what we need from our government.
Robert Hemphill, Houston
As for “Fed criticized for lack of red flags ahead of bank collapse” (March 14): I noticed something in this AP article. SVB’s CEO lobbied Congress to ease oversight of his bank line and served on the board of the Federal Reserve Bank of San Francisco, the Federal Reserve branch responsible for overseeing SVB. Congressional lobbying is considered legal (although perhaps ethically murky), but sitting as a board member at the very institution that is supposed to regulate its activities regarding the common good just needs to be a clear conflict of interest. How enmeshed is the banking industry with its regulators in the whole artifice of the “independent” agency called the central bank? Shouldn’t it be illegal, even a crime, for such conflicts to knowingly exist? I’ve been saying to myself recently “at least there are some adults regulating the financial system” whenever politicians freak out, but if this kind of behavior is common then we’re in trouble! The independent Fed was created by law, and the law can be changed to prohibit and sanction this kind of unseemly conduct.
Walt Lind, Nassau Bay
