On the recordMarch 27, 2023
We seem to have escaped the critical stage of this bank meltdown. We have not escaped without cost. The FDIC announced today that they--and this is a vague estimate-- will have to spend $20 billion with regard to Silicon Valley Bank. That money will then be collected by fees that are on banks--basically, on depositors--in coming years. More importantly, our economy has faced a huge shock. Business loans that would have been made were not made in the last month and probably will not be made in months to come. The only silver lining there is the Fed was looking to slow down the economy, but this is one hell of a way to do it. We have a fundamentally undemocratic system for regulating banks. First, for the regional banks, the district Reserve banks, their Boards of Governors are not selected through a process of democracy. Elections are supposed to have consequences, but neither Congress nor the President has any role in selecting most of these directors. Instead, they are selected by the banks. In what way should we have governmental power vested that way? Then, we have the Financial Accounting Standards Board, which claims not to even be part of the government and, therefore, doesn't claim to be responsible to the voters of this country. Yet, it collects taxes and writes, in effect, accounting laws.…
