White House press secretary Karine Jean-Pierre is struggling to accept descriptions of the Biden administration’s bailout of Silicon Valley Bank depositors as “savage.”
The failed bank, the second largest in U.S. history, has exposed scores of business depositors to risk. These companies include: Circle ($3.3 billion), Roku ($487 million), BlockFi ($227 million), Roblox ($150 million), Ginkgo Bio ($74 million), iRhythm ($55 million $), Rocket Lab ($38 million), SangamoTherapeutics ($34 million), LendingClub ($21 million), and Payoneer ($20 million).
According to the Federal Deposit Insurance Corporation, bank accounts are insured up to $250,000. However, since then, the US government has stepped in to bail out billions in bank deposits.
KJP was aboard Air Force One en route to San Diego on Monday when he was confronted with the infamous “B word.” Listen:
REPORTER: “Republicans say this is a bailout.”
KJP: “This is not a rescue. It’s not 2008 at all.” pic.twitter.com/MR2wPz7UEF
— Townhall.com (@townhallcom) March 13, 2023
“Republicans say this is a bailout,” said one reporter.
“This is not a bailout, he objected. “This is not 2008 at all.”
“The funds come from bank fees and not from taxpayers, so this is very different from what we saw in 2008,” he added.
KJP repeated this objection throughout his on-air press group, as if to make his narrative come true.
But the inspector general of the The Troubled Asset Relief Program, the original “wildlife” program administered under the Obama administration, begs to differ with Biden’s press secretary.
“If your definition is government intervention to prevent private losses, this is certainly a bailout,” Barofsky said.
Richard Squire, a professor at Fordham University Law School and an expert on bank bailouts, expanded on the similarities and differences with the 2008 banking crisis.
“What they mean when they say this is not a bailout, is that it’s not a management bailout,” Squire said. “VCs and startups are being bailed out. There’s no doubt about that.”
Squire added that when senior White House officials avoid the B-word, they are “trying not to get tarred by the 2008 financial crisis.”
“If we use a different term, we’re serving the interests of those who want to hide what’s really going on here,” Squire said.
On Tuesday, media streaming service Roku was “relieved” to learn that the federal government was coming to its rescue.
“Roku has also stated in a regulatory filing that the deposits in SVB were largely unsecured and it was not sure how much it could recover, but added that it believed it had enough cash for the next twelve months,” he said. report Zacks. . “Its remaining balance of $1.4 billion is distributed among other large financial institutions.”
“The FDIC acts as receiver, which typically means it will liquidate the bank’s assets to pay its customers, including depositors and creditors,” the report notes. “It will pay uninsured depositors an advanced dividend within this week and they will get a liquidation certificate for the rest of their uninsured funds.”
Silicon Valley Bank on Friday became the second largest bank in US history to fail. The Federal Deposit Insurance Corporation closed its doors and is overseeing the liquidation of its funds.
According to the Claremont Institute, records show that Silicon Valley Bank had pledged approximately $74 million to Black Lives Matter and associated groups.
The bank bailout poses a “moral hazard,” critics say, because of its incentive for risk-taking as well as donations to activist causes that the federal government deems politically beneficial.
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The Silicon Valley Bank That Got a ‘Savage’ From Biden Was a Massive Contributor to Black Lives Matter
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