Now that the bailout of the Silicon Valley Bank depositors at 100 percent rather than the nominal $250,000 limit has been announced, it is difficult to discern whether the primary motivation is avoidance of future bank runs by small businesses and the like, or an old-fashioned effort to reward the wealthy friends of the Democratic Party in Silicon Valley. (It will be interesting to see the effect of the bailout in terms of 2024 campaign contributions.) It may be the case that the former is the central goal of Fed Chairman Jerome Powell, while the latter is of greater interest to such academic politicians as Treasury Secretary Janet Yellen.
Read Full Article »
