State Medicaid programs were created for the explicit purpose of providing health insurance coverage for State citizens on the lower rungs of that State’s economic ladder. The Federal government transfers Federal funds—the tax remittances of all of us citizens regardless of the State of which we might also be citizens—to support those Medicaid programs.
In California’s case, Federal transfers in support of Medi-Cal, that State’s Medicaid program, comprise more than 69% of the program. That amounts to 71.4 billion of our tax dollars.
Now the Progressive-Democrat governor of California, Gavin Newsom, wants Medi-Cal to pay the rent for the State’s homeless.
The Wall Street Journal editors wrote Thursday about Treasury Secretary Janet Yellen’s…flip-flopping…on making whole, or not, nominally uninsured depositors in the wake of SVB’s failure and the government takeover of Signature Bank. Their subheadline accurately summarized the matter.
Are all deposits insured or not? Only [Yellen] seems to know.
The editors’ lede was this:
Treasury Secretary Janet Yellen on Thursday walked back her comments from the day before that walked back her remarks the day before about providing a de facto guarantee on all US bank deposits.
The editors then asked the question: Who’s on first?
That’s the headline on The Wall Street Journal‘s Sunday Letters section. There’s also this from a letter by Desmond Lachman of the American Enterprise Institute:
The real lesson from SVB’s failure is that things break when the Fed is forced to raise interest rates at an unusually rapid rate to regain inflation control.
And this, from another Letter-writer in that section:
…the Fed sowed the seeds of the current crisis as SVB stretched for yield in a zero-interest-rate environment and then failed to manage its duration risk. The Fed’s efforts to micromanage the economy creates unforeseen problems that continue to erupt.
It seems the Federal Reserve knew of the risks stemming from SVB management moves as long ago as 2019 [emphasis added].
In January 2019, the Fed issued a warning to SVB over its risk-management systems, according to a presentation circulated last year to employees of SVB’s venture-capital arm….
The Fed issued what it calls a Matter Requiring Attention, a type of citation that is less severe than an enforcement action. Regulators are supposed to make sure the problem is addressed, but it couldn’t be learned if the Fed held SVB to that standard in 2019.
Following the 2019 warning, the Fed informed SVB in 2020 that its system to control risk didn’t meet the expectations for a large financial institution, or a bank holding company with more than $100 billion in assets, the presentation to employees at SVB’s venture-capital arm said.
That’s what Silicon Valley Bank had for the last 8 months of 2022. Much is being made of SVB’s choosing to employ a Diversity, Equity, Inclusion person in an executive position during that time frame, but a more important function is being missed in this kerfuffle. That is the answer to this question:
It is not clear who handled [SVB CRO until April ’22, Laura] Izurieta’s duties in the last eight months of 2022.
Hypocritically, it’s by the Progressive-Democratic Party, which runs Michigan’s government. That’s the party that claims to champion the rights of America’s workers.
[State] Senate Democrats voted along party lines in support of repealing the decade-old “right-to-work” law in a state long considered a pillar of organized labor.
The State’s House already had passed a substantially similar bill, now the two go to conference to reconcile the differences, then the result will be voted up in both houses and sent to Governor Gretchen Whitmer (D) to be signed into law.
Matthew Wielicki, University of Alabama Assistant Professor of Geological Science, is on the right track, but he’s in a vanishing minority.
We’re literally moving away from the foundations of academia. If professors have any hesitancy in their speech, if students are hesitant to ask questions, if there is a decrease in dialogue because of a fear of retribution—that’s the fundamental principles that universities were founded on.
Unfortunately, he says, professors have precisely that hesitancy to speak freely. And this regarding a December 2022 poll by the Foundation for Individual Rights and Expression that found that
That’s what President Joe Biden (D) claims after the Silicon Valley Bank collapse.
Americans can rest assured that our banking system is safe. Your deposits are safe. Let me also assure you that we will not stop at this. We will do whatever is needed.
But that’s true only if regulators do their job and enforce the rules in place—as they chose not to do in the runup to SVB’s failure—and if risks are well-known and left to the responsibility of the risk-takers in a free market rather than laid off to us taxpayers to make those taking the risks whole.
Robert Frommer had a Wall Street Journalarticle centered on a case in which the FBI confiscated the life savings of his client as they raided a bank’s safe deposit box vault and snatched up the contents of deposit boxes rented by hundreds of customers, including his client’s. The FBI never charged his client with any wrong-doing, and in denying her request to get her stuff back, the FBI simply said “No,” with no explanation.
What drew my attention even more strongly, though, was Frommer’s penultimate sentence:
Courts must demand justice by preventing agencies from forfeiting property without informing owners of what they did wrong.