Republicans blame ‘Woke’ for bank collapse

Influential Republicans and conservatives have decided on the reason for the collapse of Silicon Valley Bank.

it was not 2018 revoke of stricter regulations on regional banks, passed on a bipartisan basis and signed into law by former President Donald Trump. It wasn’t a bank run unleashed by nervous venture capitalists and startup founders. It wasn’t even interest rates raised by the Federal Reserve to curb inflation.

Instead, Tories have rallied to blame the bank’s collapse on the “awakening”, arguing without evidence that the existence of diversity, equity and inclusion programs led to mismanagement.

“This bank is so concerned with DEI and politics and all sorts of things, I think that really distracted them from focusing on their core mission,” Florida Republican Gov. Ron DeSantis said on Fox News on Sunday.

“SVB = Too Awake To Fail,” Sen. Josh Hawley (R-Mo.) wrote on Twitter.

Former President Donald TrumpDonald Trump Jr., House Oversight Committee Chairman James Comer, Trump adviser Stephen Miller, and the pro-big business Wall Street Journal op-ed page have made arguments similar to those from the Republicans, who fiercely fight any attempt to regulate Wall Street and the financial industry in general. , work to deflect blame from the much more obvious culprits.

Insist that the “awakening” is to blame for the bank’s failure, and the need for a subsequent bailout by federal authorities in order to prevent a broader run on regional banks — is an attempt by the Republican Party to shift the terms of discussion from banking industry regulation and power, where the pro-Wall Street views of most Republicans are out of step with public opinion, to grounds of culture war, where they feel they have an advantage.

The rhetoric, which echoes the party’s attempt to blame black and poor landlords after the 2008 financial crisis, also follows long-standing conservative efforts to demonize any attempt to diversify the workforce and a more recent obsession. with the supposed liberal inclination of big business in culture. affairs. (BuzzFeed, HuffPost’s parent company, relies on SVB.)

“Woke,” which began as the African-American vernacular to foster awareness of social injustice, has increasingly become the Republican Party’s all-purpose epithet to discredit any institution that breaks with the party’s political and normative goals. , applied to everything from the military to the media.

The GOP’s focus on “awakening” has irritated Democrats, who see the issue as irrelevant to what should be done with future banking regulation and how to resolve the crisis.

“In fact, it’s SUPER AWAKEN to have large volumes of uninsured deposits and fail to manage risk by relying too heavily on illiquid long-term bonds and inadequate hedge against rising interest rates,” said Sen. Chris Murphy (D -Conn.) wrote on Twitterwith no small amount of sarcasm.

Lucas Kunce, a progressive antitrust pundit and Marine Corps veteran who is running for the Democratic nomination to challenge Hawley in deeply Republican Missouri, blasted Hawley as a fake populist more interested in scoring points in the culture war than regulating an industry out of control.

“He’s going to do everything he can to feed the charade that he’s making,” Kunce said of Hawley’s attacks on the bank. “Nothing about the banks making Congress rewrite the rules. Nothing about reform or protecting Missourians. We need real banking reform.”

Hawley, for his part, vowed to introduce legislation barring banks from charging customers the fees necessary to pay the ransom and said he would ensure “responsible community banks” were exempt from the levies.

Evidence of the alleged “awakening” of Silicon Valley Bank is also scant. While the bank deployed the rhetoric about race and gender issues that are now commonplace in corporate America, there is little evidence that it was an outlier or that it impacted the bottom line.

In a Wall Street Journal opinion piece, columnist Andy Kessler noted The bank’s board of directors was made up of 45% women, with one black member and one member who is LGBTQ.

“I’m not saying 12 white men would have avoided this mess, but the company may have been distracted by diversity demands,” Kessler wrote.

A look at the bank’s board of directors shows a typical financial industry background rather than a collection of unqualified individuals. The only black director was Richard Daniels, a former top executive at Kaiser Permanente who previously worked at JPMorgan Chase and Capital One.

He same bank document that Kessler cited in board diversity also recommends that SVB shareholders vote against an independent racial justice audit, arguing that the company has already done more than enough on diversity, equity and inclusion, and asserting a number of repetitive clichés.

“We are on a journey and will continue to evolve,” the board wrote. “Over time, we hope to identify opportunities and new approaches to address systemic racism and social injustice as we continue to seek diverse perspectives, learn from our efforts, and improve our existing processes and programs. We are committed to continuous learning and improvement based on real data and feedback, and to sharing our progress with our shareholders and broader community.”

conservative influencers, along with the New York Post, owned by Rupert MurdochThey have also singled out Jay Ersapah, head of financial risk at Silicon Valley Bank UK. Erasph regularly discussed his background as a queer immigrant and promoted the company’s diversity initiatives. But Silicon Valley Bank UK was not responsible for the collapse of its California-based parent and did not suffer from the bank run. A major British bank, HSBC, bought the UK branch on Sunday.

Efforts to blame racial minorities for financial calamities are not new to the Republican Party. In 2008, when a wave of foreclosures froze the financial system, led to the collapse of Bear Stearns and resulted in massive government intervention to save major banks and automakers, Republicans blamed federal affordable housing goals.

He consensus view of that financial crisis pointed to the lack of regulation around derivatives trading as an underlying cause. However, many Republicans pushed for an alternative angle, blaming government efforts to increase home lending to blacks, the poor and the young for fueling a wave of foreclosures.

Senate Republican Leader Mitch McConnell, for example, singled out Fannie Mae and Freddie Mac, the government-backed mortgage lenders that have provided many loans to the poor, as the “main players in the financial meltdown” in a 2010 speech. And a Republican appointee to the Financial Crisis Inquiry Commission, a government body assembled to investigate the causes of the crisis, devoted a lengthy dissent to arguing that government housing policy was essential to the crisis.