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It is not only that our government is gargantuan, it is. The problem is the government is unbelievably humongous AND incredibly incompetent. It is that combination that rightfully angers the American people. Most Americans are generous people. We wouldn’t complain, as much, about paying taxes if we knew our tax dollars were being spent prudently. Unfortunately, government programs are replete with instances of neglect, lack of supervision, and outright fraud.

The banking crisis of 2008-09 saw hundreds of billions of taxpayer dollars paid to bail out banks that were deemed “too big to fail”. Americans were furious that they were forced to cover for the mistakes of greedy bank execs. Recognizing that anger, the President and the bloviating bozos in Congress put forth a list of reforms and regulations that, they promised, would ensure bank bailouts would never be needed again. Fast forward 15 years and, to quote the great philosopher and baseball player, Yogi Berra, “it’s Deja vu all over again”. Congress didn’t need to pass any new laws, or regulations. It needed only to require that CEOs of failing banks resign in order for their banks to receive taxpayer’s money. Prosecution of those who knowingly stuffed their pockets at the expense of depositors and shareholders would have gone a long way toward putting an end to future misbehavior.

Because serious actions weren’t taken then, we are again facing similar threats to the banking sector. The most recent incidence of government neglect and lack of supervision is the situation at Silicon Valley Bank (SVB). (There were a couple of others, but SVB is garnering the headlines). A couple of Fridays ago SVB announced it had a liquidity problem and was in financial distress. After further review, it is no wonder. The bank was funding short term liabilities with long term investments. There is nothing wrong with that strategy as long as bank risk managers put the proper investment hedges in place. Had regulators been doing their job this would have been remedied immediately, and without harm to the banking system, or depositors.. Sadly, the bank had not had a risk manager, a regulatory requirement for all banks, for nearly a year. Had regulators not been asleep at the switch, they would have locked the front door at SVB until a qualified risk manager was hired. The entire mess could have been avoided if feckless, high paid, government regulators had simply done the job they were hired to do. They were absolutely abysmal. We can be comforted in knowing that 1. SVB had an appropriately diverse Board of Directors. 2. They had donated tens of millions of dollars to BLM and other like-minded activists. 3. They loaned billions of dollars to start up “green” companies. These 3 items allowed SVB leadership to move to the front of the line in virtue signaling, giving them high ratings in Diversity, Equity, and Inclusion. While the leadership of SVB proved to be dumb as a box of rocks, I’d bet they got an A+ for their diligence pertaining to Environment, Equity, and Governance. Their priorities were tragically misplaced.

So what should happen right now? The CEO, the Board of Directors, and other top management executives at SVB should be fired, and prosecuted if they broke any laws. Those firings should be followed by the firing of every person who had supervisory responsibility over the bank. I mean all the way up the supervisory food chain. Had this happened in 2008-09 it is a sure bet we wouldn’t be reliving this nonsense today. SVB should have been sold to the highest bidder the first weekend it found itself in trouble. But the inept reviewers at the FDIC don’t like bank mergers, so they refused offers to purchase SVB. It is better, in their opinion, to force taxpayers to pony up and cover the losses of multimillionaires. The President was adamant this was not a bailout, and it wouldn’t cost taxpayers a penny. Here is my 2 word answer in numeric alphabetic code to both of Biden’s ludicrous comments: 2-21-12-12 19-8-9-20!

What shouldn’t happen. There is no need for additional fees, regulations, or regulators. They will prove useless if idiots are allowed to run our banks and blind sloths are left to regulate the idiots. What follows is a short story explaining the difference in how big government endeavors to solve problems and how problems would actually be solved. Let’s look at an imaginary problem on our interstate highways. Speed limit signs are placed about every 5 miles on the highways. Police officers are encouraged to patrol the highways . . . . if they get a chance. Now, let’s pretend that traffic deaths hit an all time high. (You and I knew this would happen). The government would convene an emergency meeting to discuss ways to solve the problem. After days of deliberation the committee decides to raise the pay of the police officers and increases the force by some random number. It contracts with the Barney Fife school of law enforcement for the new recruits. They are told to follow the same protocol as the existing officers. They also decide it would be helpful to increase the frequency of speed limit signs. The total cost of the new recommendations will be in the billions of dollars. Our President tells us a magical highway safety fairy has promised to pay the entire cost. It won’t cost taxpayers, he promises, a penny. Something like this will be the end result of the current bank failures.

Our Democrat President found himself in a very difficult situation. He had countless Democrat donors with hundreds of millions of uninsured dollars deposited in SVB. So he, and the FDIC, decided to wave the insured maximum of $250,000 per depositor. With a waive of his royal scepter, the King decreed the laws covering FDIC insurance null and void. One must think that means, going forward, all depositors will be covered by the government. But this is only important to the uber wealthy. Few of us have more than $250,000 in FDIC insured bank accounts. This may sound good. But it is the next step toward the nationalization of our currency and banking system, That is government control of our money. By controlling our money, the government can effectively control every aspect of our lives. We need to watch this very carefully. Thank you for taking the time to read my latest blog. I hope you found it interesting and/or informative. Bob