Fox News host Kayleigh McEnany argued on Tuesday’s “Outnumbered” program that the White House is trying to position President Joe Biden as saving the day by bailing out Silicon Valley Bank, but his policies helped contribute to the bank’s failure in the first place.
“The monetary policy and the decisions of the federal government cannot be insulated,” McEnany said.
She noted that Biden tried to blame a 2018 law, passed with bipartisan support during the Trump administration, as the reason SVB failed.
But The Wall Street Journal editorial board and others have agreed the regulation changes made to the Dodd-Frank Act regarding mid-sized banks were not the cause of SVB’s failure, poor management in the Biden economy were.
McEnany suggested the White House press office appeared to be planting stories in left-leaning news outlets like Axios and Politico to paint the picture of the president saving the banking system.
Axios ran a story titled, “Inside Biden’s SVB move to stop future bank runs” Tuesday, she pointed out, while Politico published one headlined, “How Biden Saved Silicon Valley Start-ups: Inside the 72 hours that transformed U.S. banking.”
“These headlines don’t come about by chance,” the former Trump White House press secretary said, explaining the Biden administration doesn’t “want to look like they are giving taxpayer dollars to these rich Silicon Valley execs.”
The federal government announced it would be covering the total amount of deposits made in SVB, rather than just the $250,000 limit guaranteed by the Federal Deposit Insurance Corp.
— Kayleigh McEnany (@kayleighmcenany) March 14, 2023
McEnany went on to contend the failure of SVB, along with the Signature Bank, were just the latest examples of crises created by Biden’s policies.
“We’ve got to ask the question, ‘How did we get here?’ We go from crisis to crisis. Afghanistan, Ukraine, inflation, baby formula, bank runs. This wasn’t happening during the four years of President [Donald] Trump. It’s happening now,” she observed.
“And they want the narrative to be ‘Biden saved the day,’ but the real narrative is Biden caused this. And but for the president of the United States, we would not be here,” McEnany said.
The Wall Street Journal refuted Biden’s claim that “no losses will be borne by the taxpayers” in the bank bailouts.
“The White House says special assessments will be levied on banks to recoup these losses. That means bank customers with less than $250,000 in deposits will indirectly pay for this through higher bank fees. In other words, this is an income transfer from average Americans to deep-pocketed investors,” the Journal noted.
The board argued that the Biden White House’s “first instinct, even in a financial panic, is to spin reality and hunt for political scapegoats.”
Former Trump White House top economic adviser Larry Kudlow pointed to the inflation the nation has experienced under Biden’s high government deficit spending policies as helping bring about SVB’s demise.
Kudlow explained on Fox News Wednesday that SVB had an upside-down balance sheet filled with low-interest, long-term treasury bonds that continued to lose value as the Federal Reserve raised interest rates to combat inflation over the past 12 to 15 months.
“The inflation rate itself is four-decade high,” he said. “You know these interest rates are going up, but you’re loaded up with long-term bonds, which are interest rate sensitive and the price of those bonds is collapsing.”
(1/4) SVB DID NOT HAVE A CHIEF RISK OFFICER & BOARD HAD MINIMAL IB EXPERIENCE, WHERE WAS THE SUPERVISION FROM THE SAN FRANCISCO FEDERAL RESERVE BANK?@larry_kudlow: “There was no supervision & examination from the San Francisco federal reserve bank…”@BillHemmer @DanaPerino pic.twitter.com/ogyp5UJ2wK
— America’s Newsroom (@AmericaNewsroom) March 15, 2023
“The best thing that could be done right now…is to sell the bank,” Kudlow advised. “And let the private sector come in with people who know how to run a bank, and there are buyers. There are plenty of buyers out there. This would reduce the government’s intervention. It would probably calm markets, calm contagion fears.”
“Let the private market free enterprise market work for heaven’s sake,” he added. “Put some people in there that know how to run a bank.”