Economist Dean Baker did not mince words as he explained the reason for the collapse of SilicoValleBank. Trump’s lax regulations were the culprits.
Economist Dean Baker
Economist Dean Baker first made it clear that the current banking crisis is substantially different than the 2008 destruction of the world’s economy by the fraudulent titans of finance.
“It’s a radically different situation, and I think it’s really important for people to understand that in 2008, the banks really were in trouble,” Dean Baker said. “They had invested a huge amount of money in mortgages, mortgage-backed securities that had really lost a very large portion of their value. And that was because the housing bubble collapsed. So in a lot of cases, you had house prices falling 50, 60, 70%. The mortgages on those houses or mortgage-backed securities were almost worthless. So you really did have banks that were insolvent. In this case, you had banks, well, Silicon Valley Bank, in particular, that exercise just horrible judgment.”
While I agree that the complete mechanics may be somewhat different, the subsequent demise of other banks makes it clear that these bankers continue to put their hands, like children, in the cookie jar.
Dr. Baker made it clear that the loosening of the regulatory controls is directly responsible for the current state of the banking system. And Donald Trump is the president that caused it.
“If they had not weakened the regulation in 2018, the Silicon Valley Bank would have been subject to regular stress tests,” Baker said. “This is directly due to the Republican weakening of the regulation that Donald Trump pushed in 2018. And that’s why we’re here.”
It could not be clearer than that.
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