CV NEWS FEED // Five days after the collapse of California’s Silicon Valley Bank (SVB) triggered fears of a global banking collapse, a new report shows business leaders expect inflation to rise in March.
Wednesday did not bring relief for Americans worried about financial strain. If anything, the release of the Federal Reserve Bank of Atlanta’s business inflation expectations compounded fears of more volatility in America’s banking system—and more pain for everyday Americans.
The numbers tell just part of the story.
February’s Consumer Price Index soared by 6% compared to last year, remaining excessively high, while real average hourly earnings fell for the 23rd straight month. To date, real wages have fallen every month since President Biden and Congressional Democrats passed the $1.9 trillion stimulus package in March 2021.
While the administration celebrated these numbers as a victory, experts suggest the recent string of bank collapses across the country are tied to excessive government spending.
In the last week alone, America has experienced the second– and third-largest bank failures in the nation’s history–events many attribute to the Biden administration’s spending.
In a recent interview, South Carolina Senator and potential 2024 GOP presidential hopeful Tim Scott explained the situation.
“The Biden administration’s policies of printing and spending trillions of dollars led to 40-year high inflation, which led the Fed to come in to slow that inflation by increasing interest rates,” said Scott, who is the ranking member of the Senate Banking Committee.
Experts say rising interest rates put pressure on the bank and led to a run after SVB suffered heavy losses from the liquidation of a $21 billion bond portfolio. But regulators—who should have seen the impending collapse before it occurred—failed to take action until it was too late.
While President Biden promised Americans that their bank accounts were safe and that the collapse would not lead to a contagion spreading to banks across the country, Americans are now learning more about SVB prior to its collapse last week.
Fox Business reported that SVB donated more than 73 million to Black Lives Matter and other political causes backed by Washington elites, while the New York Post detailed a long list of Democratic Party campaign donations from SVB’s board members.
Among those board members is Director Kate Mitchell, 64, who donated $50,000 to Hilary Clinton’s PAC in 2016.
Meanwhile, the Daily Wire compiled data showing President Joe Biden received some $66,700 from SVB affiliates in the 2020 election cycle, while the Democratic National Committee’s Services Corporation received $21,400.
The ties between failed banks and Democratic politicians have led to criticism of the Biden administration, which moved quickly to reimburse SVB depositors.
On Sunday, Secretary of the Treasury Janet Yellen, Federal Reserve Board Chair Jerome Powell, and FDIC Chairman Martin Gruenberg announced “decisive actions” to guarantee all deposits, including the uninsured funds.
But according to an unnamed tech insider who spoke to the New York Post, the bailout was an example of the Biden administration looking after its own:
“This is a bailout… and the account holders they bailed out are Democrats,” a tech insider told The Post, though he qualified the statement by noting the consensus view that the federal government did the right thing by pledging to make depositors whole.
“Silicon Valley Bank is the bank of the Democrats …. they’re looking after their own,” he added. “If it was the Bank of MAGA, what are the chances it would be bailed out? There’s not a chance in hell.”
Meanwhile, concern is growing among Republicans about the financial implications of the Biden administration’s decision to federally guarantee depositors at the elite bank.
Scott said the Senate Banking Committee will look to protecting American taxpayers from having to bear the costs of the bailout.
“The American taxpayer should not be on the hook for this failure. We’re going to do everything in our power to make sure that doesn’t happen.”