Tag Archives: ethics

Right, But for a Different Reason

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The Wall Street Journal‘s editors’ headline and subheadline is on a reasonable track:

Punishing Banks for Regulatory Failure
Regulators want to saddle midsize banks with new capital rules.

The editors the proceed to disparage the regulators’ move, and they’re correct about that. They’re mistaken in their lede, though, and that leads them to the erroneous aspect of their disparagement:

Silicon Valley Bank failed owing to rising interest rates and lapses by regulators, not a shortage of capital.

It’s true that a shortage of capital did not cause SVB’s failure, except as the proximate outcome of the real cause of the failure, an outcome that made the failure inevitable.

SVB did run short of capital value, and that meant it couldn’t survive the rapid outflow of cash through depositor withdrawals. But rising interest rates were only the means of that capital shortfall and bank failure, not the cause. Nor were lapses by regulators—and there were some serious ones, including their lack of oversight diligence, which should have led to better enforcement of existing rules—involved in the bank’s failure.

The bank’s managers failed in their own fiscal duties, overbalancing as they did the nature of their capital holdings in the face of those rising interest rates: those managers chose not to balance the interest rate risk related to their deposits and the rates they were paying against the interest rate risk related to their capital holdings and the way rising rates were devaluing their holdings.

Those managers could see as well as any of us, and as well as their depositors, what rising rates were doing to their bank’s capital, and those managers could see as well as any of us, and as well as their depositors, the increasing risk to the bank of the decreasing interest rate spread between what the bank paid depositors and what it earned on its loans, loans the bank was increasingly unable to make in the face of those rising interest rates. And that exacerbated the impact of the bank’s decreasing capital holdings, which those managers could see as well as any of us, and as well as their depositors.

Nor did lack of overt regulator intervention have much of anything to do with SVB’s failure. Bank managers, any enterprise managers, are paid to act on their own initiative, not to wait until they’re told what to do and then, subsequently, told to go ahead and do it.

SVB’s managers were no exception to that.

This was an SVB management failure, and Regulators have no place for writing new capital rules. It’s sufficient for the market place to apply the appropriate sanctions, even if that deprives government bureaucrats of an opportunity to feel good about themselves by Doing Something.

The Fix is In

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Recall that Delaware Federal Prosecutor David Weiss is the prosecutor who agreed to a wrist-slap plea deal regarding Hunter Biden’s tax failures and his illegal possession of a firearm. That deal was so soft, and so shady—Weiss even tried to slide an indemnity against any further prosecution on any matter into the rehab program Weiss had agreed—that the judge presiding on the case tossed it the day it was formally presented to her.

Now, Attorney General Merrick Garland, President Joe Biden’s (D) wingman in DoJ has appointed a special counsel to oversee the continuing/renewed investigations into Hunter Biden’s shady foreign dealings (many of which border on, if not actually are, FARA violations), money laundering, and influence peddling, all of which have implications regarding Joe Biden’s involvement.

That special counsel is…David Weiss. That David Weiss.

This is move does two things: it sets the stage for whitewashing the Biden family, and it actively interferes with the House investigations into Hunter Biden’s dealings and those dealings’ implications regarding Joe Biden. Now the principles and other witnesses have cover to refuse to testify before the House’s investigating committees: “it interferes with an ongoing investigation.”

Sure.

And one more thing. The appointment of Weiss as special counsel is a sham. Special counsels, by statute, must come from outside government, not just outside DoJ. Weiss is not and he will not be outside of anything as a result of this move of Garland/Biden.

One more one more thing: all a special council can do, all the teeth that one has, is write up a report on his findings. He cannot require, or even recommend, prosecution or exoneration. Nor is there a deadline even for that senior thesis to be delivered.

Who Restricts What in K-12 Education?

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Cogently put by Keri Ingraham, Discovery Institute’s American Center for Transforming Education Director in her Tuesday Wall Street Journal op-ed:

[M]ost “public” schools aren’t public at all.
In most communities, children are restricted to a single assigned school based on their home address and arbitrary boundary lines. Private schools often have academic, behavioral or other admissions standards, but they don’t keep children out simply based on where they live.

There’s this bit, too:

The cost of tuition is the primary barrier to parents who want to enroll their children. Nine states—Arizona, Arkansas, Florida, Indiana, Iowa, Ohio, Oklahoma, Utah, and West Virginia—have enacted universal or near-universal school choice into law, thus the financial barrier for families to enroll their children in private schooling—whether traditional, online, hybrid or micro schools—is crumbling.

But the Left and their teacher unions coterie object to lowering those cost barriers, which would free children from the chain link fencing around cheap, but badly ineffective, public schools. It’s those schools with their heretofore captive populations, after all, where the unions hold sway and collect their vig.

The Left and those unions bleat about how a child’s education ought not be based on the child’s family’s ZIP code.

Yet here they are.

Wrong Way to Punish the FBI?

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The Wall Street Journal‘s editors are concerned that doing away with FISA’s Section 702 would be the wrong way to punish the FBI.

I agree. But the editors are missing the point. They too narrowly justify 702 with this:

Congress created Section 702 after 9/11 to address intelligence-gathering gaps. It lets the government collect information without a warrant on non-US citizens living abroad.

That’s a worthy purpose; although the realization has demonstrated the difficulty of using the capability to good effect, and without abusing it. Or the impossibility of that with the current regime. The FBI has demonstrated that, as an institution, it cannot be trusted with 702 output, and the FISA Court has empirically demonstrated that cannot be trusted, either—not after squawking about FBI lies in the latter’s filings and then proceeding to accept unquestioningly further FBI blandishments and warrant applications.

Answering those deficiencies, though, is a separate matter from applying the appropriate responses to the FBI’s misbehaviors and the FISA Court’s yapping about those misbehaviors.

The FBI is irretrievably broken—its lies to a court are only part of the institution’s failures; its stonewalling of Congress under the risible rationalization that its internal procedure policies are superior to Congress’ constitutionally mandated oversight obligations are another—and it needs to be erased from our government altogether. That, not dealing with 702, is the correct response to the FBI’s institutional dishonesty.

The correct FISA-related action is to make the FISA Court a public proceeding court or itself eliminated as well. That’s not punishing anybody; that’s simply getting rid of the stain of a secretive Star Chamber and forcing “court” activities out into the sunlight, or bringing the warrant application/granting process back into a proper Article III court. Those courts, after all, are fully checked out on the process of keeping warrants sealed until execution.

Be More Obsequious

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Congresswoman Nancy Pelosi (D, CA) is tired of the Republican Party.

I wish the Republican Party would be—somebody would take it back, that we’d have a real Republican Party.

The Progressive-Democratic Party position, as demonstrated by Pelosi, is that the Republican Party should go back to being satisfied with being the loyal opposition and stop being so uppity.