5 ms·

No, but the median salary for a software engineer is still 120k, a little under double the median salary across all industries. It's hard to dredge up deep, de

No, but the median salary for a software engineer is still 120k, a little under double the median salary across all industries. It's hard to dredge up deep, deep wells of sympathy for folks who were already playing the salary game at double the value of half the players. One can't escape the sense that if they've done the kind of budgeting that a regular American does, they will be fine.

wpietri 4y ago
Especially for the startup end of things, where we are aiming to disrupt other businesses. Should we have a strong safety net, so that people who lose their jobs due to market disruptions or executive mismanagement do not suffer? Absolutely. And if it's currently inadequate, by all means let's improve it. But I think it's wrong to try to protect jobs through government subsidies to industries where execs made bad choices. Which is exactly what a lot of people are apparently asking for when they're asking for depositors to get retroactive free deposit insurance here.
- shadowgovt 4y ago
  It is possible that it'll make some kind of realpolitik sense to stabilize the startup scene, but I sort of doubt it. During the housing crisis, the federal government bought up sufficient stock to stabilize American auto manufacturing not because they particularly cared about the jobs that would be lost or the ecosystem of supporting industries that would be damaged as a result of loss of major manufacturing, but because auto manufacturing is one of America's national security concerns... The factories and skill sets that create trucks can create APCs, jeeps, and tanks if a hot war breaks out. I'm not exactly sure off the top of my head what the similar defense necessity story is for Silicon Valley.
  - wpietri 4y ago
    Agreed. Especially for the bits of it that are at risk here, which are mainly small, unprofitable players.
  - epvgwwqe 4y ago
    Are you for real? There is an AI arms race with China, for one. There is critical innovation across all segments happening in Silicon Valley, including defense.
    - shadowgovt 4y ago
      That would be a good argument for bailing out a Raytheon or a Microsoft, companies that have a record of success in delivering on complicated software technologies, but not the average Silicon Valley startup.
      - epvgwwqe 4y ago
        You can't throw the baby out with the bathwater. If the entire ecosystem is hurt it will affect the next Raytheon/Microsoft as well.
- x0x0 4y ago
  Framed another way, we're asking for the government to take some ownership of their stewardship of banks. The Treasury, the Fed, the CA gov, and the ratings agencies all gave svb passing grades. svb appears not to have done crypto speculation. The svb ceo asked congress to weaken Dodd-Frank. If that's a bad idea, then congress should say no; that's their job. Apparently banking over trivial amounts of money ($250k isn't even one month's cash use -- ie payroll and health insurance -- for a 15-ish person sfbay company) requiring significant work to make that cash unlikely to just disappear is no way to run a country.
  - wpietri 4y ago
    The cash was always unlikely to disappear. It's just that even unlikely things happen sometimes. If doing decent treasury management is too darned hard for rich people to do, I don't think that's a problem for the government to manage. Beyond the obvious expedient of using two or three banks, which would have solved most problems for most companies here, there are a number of obvious market-driven solutions. E.g., https://www.difxs.com/ https://www.difxs.com/ or https://www.g2.com/categories/treasury-management https://www.g2.com/categories/treasury-management
    - x0x0 4y ago
      > too darned hard for rich people to do Yeah, this is some ideologically driven smearing of people who are literally like I want to stick my seed round in a checking account and not have that disappear. For what it's worth, I'm not rich; I'm like a hundred-thousandaire. (And not affected, though friends are.) Disappointing to see someone like you gloating that a bank screwed a bunch of small business customers. From reading your writing, I doubt you'd cosign "basic economic services like a checking account are use at your own risk" in almost any other area.
      - wpietri 4y ago
        Ah yes, my crazy ideology of "people should generally experience the consequences of their actions, especially when they're doing very well". I get that you want to be able to be handed millions of dollars and have somebody else take care of that for you. Who doesn't want that? I just don't understand why you think it's the job of poorer people to subsidize you if you take a risk with those millions and it doesn't pan out. > "basic economic services like a checking account are use at your own risk" I in fact don't cosign that; I've been very clear that I support mandatory FDIC insurance with its current very generous limit. I also support the FDIC's resolution process where they immediately pay out the $250k and then work hard to quickly pay a large portion of the remainder. That's a giant level of risk reduction. But if somebody is rich enough that they have millions in cash and haven't bothered to take basic precautions like "use two banks", I don't think that's a problem such that (much poorer) taxpayers should be obliged to make it all better. If it happened to a friend I would feel bad for them personally, of course. But not so much that I would be calling for a government bailout. Capitalism works because risks yield both gains and losses. People who don't like that should manage their risks.
- closeparen 4y ago
  We can absolutely be a society in which checking accounts are a pit of snakes which must be navigated by executive savvy and wit. It’s just going to be a much poorer one. The point is not to “protect jobs in Silicon Valley” per se, it is to maintain banking infrastructure as the sort of thing that just works (or gets urgently fixed) so that the entire economy can continue to rely on it, vs. entering a lower-trust regime where a checking account may as well be a stock portfolio.
  - wpietri 4y ago
    The FDIC already exists to make sure checking accounts aren't a pit of snakes for 99% of the population. The entire economy can continue to rely on it just as it always has. Does this mean that rich people have to be more careful managing gobs of cash? Yes, but that has always been the case. Treasury management is a thing that exists both as a thing people do professionally and as a service you can buy. I understand that some people are young enough that they have either not heard about bank failures or did not feel like it applied to them due to being in a period that was very good for banks. But they are and they do: https://www.fdic.gov/bank/historical/bank/ https://www.fdic.gov/bank/historical/bank/
    - closeparen 4y ago
      You mean, personal savers and very small businesses can continue to rely on the banking system. That’s not 99% of the economy. Young people hear plenty about bank failures - specifically as a success story for big government, a problem we solved, such that depositors are secure these days. I recognize that startups are in a bit of a weird place where they might have a lot of money to manage before they are sophisticated enough to have a big finance team. If only there were some sort of entity specialized in dealing with their unique needs… oh wait.
      - wpietri 4y ago
        Yes, that's why I said "99% of the population", not "99% of the economy". But the economy's also going to be fine here. Most businesses with a lot of money understand that bank failure risk is just one of the many financial risks to manage. To the extent a startup wants to have millions of dollars but not hire somebody competent to manage that money, them's the breaks. The same thing would be true for startups that don't take security seriously, for example. I feel bad for the founders here, but no worse than I would for one who experienced hackers getting in and stealing the data. Even if they had hired "sort of entity specialized in dealing with their" security needs. Picking a bad vendor happens, and if you bet your company on a vendor choice in a vital area, well, sometimes those bets don't come out like you hoped.
- dralley 4y ago
  > Especially for the startup end of things, where we are aiming to disrupt other businesses. By lighting large piles of nearly-free Saudi money on fire to undercut sustainable businesses on price.
azinman2 4y ago
You know that not only startups use SVB right? Farmers and wineries do as well. And either way this is the economic engine of America - in its accounts lays the next trillions of dollars of GDP. It is unbelievably stupid to not find a way to make them whole for a black swan event.
- pirate787 4y ago
  This isn't a black swan event, it was run of the mill mismanagement.
  - diab0lic 4y ago
    From the perspective of the bank this isn’t a black swan event, from the perspective of a smaller farmer or winery it is certainly a black swan event.
    - logifail 4y ago
      > from the perspective of a smaller farmer or winery it is certainly a black swan event Q: How much cash do small farmers / wineries have on deposit at their bank?
      - alonmower 4y ago
        Let's say a small farm or winery employees 20 employees and pays them an average of $50k a year. Holding three months of payroll alone will be over the FDIC limit, let alone other money they'll need to buffer all of their other expenses.
        logifail 4y ago
        > Let's say a small farm or winery employees 20 employees and pays them an average of $50k a year "Show your working" ... https://www.bls.gov/oes/current/oes452099.htm https://www.bls.gov/oes/current/oes452099.htm > Holding three months of payroll [..] Three months of payroll ... in cash? I have two good friends who own and run wineries in France. Both of them are relatively successful, but neither of them have anywhere near 20 employees, for the simple reason that they can't afford to. The majority of the work is done by family members.
tolmasky 4y ago
Besides the trivially obvious recognition that people other than engineers work at companies (cooks, janitors, HR, etc.), realize also that, for example, Etsy’s sellers may be affected since the account used to pay them was at SVB. Of course, I’m sure someone here will explain that obviously some lady selling bowls in Michigan should have done due diligence on her platform’s bank of choice to make sure that they didn’t have any maturity risk. Anything short of that really just fundamentally represents business incompetence and deserves to be wiped out since Peter Thiel decided to cause a run at the bank two layers removed from her. But that will teach the correct lessons and punish the right people! Clearly Thiel should be rewarded for prudently advising everyone to remove all funds, while janitors and craftspeople on Etsy alike will finally learn the importance of marking to market treasuries.
- shadowgovt 4y ago
  Actually, for almost all of these companies, cooks, janitors, etc are contracted employees and work for the contracting company, not the startup. The startup retains a contract for services. This allows them to keep those employees at arm's length and not have to pay the kind of salary and benefits that their "real" employees enjoy. It has also great bonuses in that if the "real" employees want to abuse the snot out of those contractors (including really vile stuff, obvious violations of the equal employment act), the tech company and the contracting company are heavily incentivized to "solve" the problem by removing the contracted employee from the position. Employees in that position, should they want to take action, have to go through multiple layers of red tape and ambiguous responsibility and risk upsetting the apple cart for all of their peers, because the tech company is always at Liberty to cancel the entire contract to avoid a "problem" contractor. The whole system is a little bit rotten. And yeah, it sure does suck for folks who are going to get bit as clients of Etsy because Etsy didn't hedge bets. Maybe Etsy learned a lesson.
  - tolmasky 4y ago
    It really sucks for Etsy’s sellers so maybe… Etsy learned a lesson? Here’s the confused lesson by association argument again. The majority of your argument is around learning lessons, but you momentarily acknowledge that perhaps there are in fact people hurt here who it would be hard to accuse of deserving it due to a lack of due diligence, but you then immediately resolve the cognitive dissonance by reassuring yourself that perhaps that will make the lesson Etsy learns that much stronger. The majority of your argument revolves around the idea that only rich people in this “rotten system” will be affected, or that this is an important lesson. When it’s pointed out that there are many types of employees who aren’t rich, you say they don’t count because they’re contractors, ignoring that even if true, which I’m not necessarily granting, it still doesn’t matter since that contracting job will still probably disappear and there is a high likelihood that they can’t just be immediately positioned somewhere new. The rich developer may have an easier time landing a new position than the cook getting a new shift from the contracting company somewhere new. But I suppose that’s irrelevant, because the point about cooks being contractors actually had nothing to do with the topic at hand of whether they deserve to be colateral damage. Rather, it was meant to derail the conversation into a long digression about how these contracting agreements further prove how “rotten” these startups are… and thus deserve to learn a lesson about treasury performance.
datavirtue 4y ago
Regular Americans spend every dime that comes in.
mullingitover 4y ago
> One can't escape the sense that if they've done the kind of budgeting that a regular American does, they will be fine. I can't escape the sense that if they've done the kind of budgeting that a "regular American" does, they're in deep trouble[1]. [1] https://www.fool.com/the-ascent/research/average-savings-account-balance/ https://www.fool.com/the-ascent/research/average-savings-acc...
- shadowgovt 4y ago
  Budgeting, not saving. It is entirely possible that the median salary in the United States is not enough to save on. But when you have nearly double that salary, what's the excuse for failing to save?
  - mullingitover 4y ago
    I’d go with tens of thousands in student loans, combined with most jobs being concentrated in high cost of living areas.
zamnos 4y ago
> It's hard to dredge up deep, deep wells of sympathy This, by the way, is why ordinary Americans are suffering while the billionaires are winning and laughing at us. They have us fighting with each other for scraps. $120k/yr after taxes doesn't go very far at all for a family of four. Kids eat a lot of food! Sure, it goes roughly twice as far as $60k/yr does, and, saved wisely and not spent on yachts, cocaine, and girls, provides a bit more of a financial cushion in case of a calamity like the one we're in, but SVB's CEO made $4.8 million last year, which, budgeted by a regular American, is enough for several lifetimes. A software dev making $120k/yr, he is not. Have however much sympathy you can muster for software developers who, yes, have more than you do, but don't lose sight of the bigger picture.
- shadowgovt 4y ago
  We could break the system if we wanted to. Were software engineers to unionize alongside the contracted employees, it would provide a front that would make it basically impossible to operate startups without dealing more fairly. You can't run a business that has a building without someone collecting the trash, sweeping the floors, and keeping the whole thing from falling down. Worst-case scenario, fouhders decide to try and operate with-from-home employee teams to decrease contractors needed, and then the engineers win anyway. ... It won't happen because we don't want it to. But it could.

wpietri 4y ago

Especially for the startup end of things, where we are aiming to disrupt other businesses. Should we have a strong safety net, so that people who lose their jobs due to market disruptions or executive mismanagement do not suffer? Absolutely. And if it's currently inadequate, by all means let's improve it. But I think it's wrong to try to protect jobs through government subsidies to industries where execs made bad choices. Which is exactly what a lot of people are apparently asking for when they're asking for depositors to get retroactive free deposit insurance here.

shadowgovt 4y ago
It is possible that it'll make some kind of realpolitik sense to stabilize the startup scene, but I sort of doubt it. During the housing crisis, the federal government bought up sufficient stock to stabilize American auto manufacturing not because they particularly cared about the jobs that would be lost or the ecosystem of supporting industries that would be damaged as a result of loss of major manufacturing, but because auto manufacturing is one of America's national security concerns... The factories and skill sets that create trucks can create APCs, jeeps, and tanks if a hot war breaks out. I'm not exactly sure off the top of my head what the similar defense necessity story is for Silicon Valley.
- wpietri 4y ago
  Agreed. Especially for the bits of it that are at risk here, which are mainly small, unprofitable players.
- epvgwwqe 4y ago
  Are you for real? There is an AI arms race with China, for one. There is critical innovation across all segments happening in Silicon Valley, including defense.
  - shadowgovt 4y ago
    That would be a good argument for bailing out a Raytheon or a Microsoft, companies that have a record of success in delivering on complicated software technologies, but not the average Silicon Valley startup.
    - epvgwwqe 4y ago
      You can't throw the baby out with the bathwater. If the entire ecosystem is hurt it will affect the next Raytheon/Microsoft as well.
x0x0 4y ago
Framed another way, we're asking for the government to take some ownership of their stewardship of banks. The Treasury, the Fed, the CA gov, and the ratings agencies all gave svb passing grades. svb appears not to have done crypto speculation. The svb ceo asked congress to weaken Dodd-Frank. If that's a bad idea, then congress should say no; that's their job. Apparently banking over trivial amounts of money ($250k isn't even one month's cash use -- ie payroll and health insurance -- for a 15-ish person sfbay company) requiring significant work to make that cash unlikely to just disappear is no way to run a country.
- wpietri 4y ago
  The cash was always unlikely to disappear. It's just that even unlikely things happen sometimes. If doing decent treasury management is too darned hard for rich people to do, I don't think that's a problem for the government to manage. Beyond the obvious expedient of using two or three banks, which would have solved most problems for most companies here, there are a number of obvious market-driven solutions. E.g., https://www.difxs.com/ https://www.difxs.com/ or https://www.g2.com/categories/treasury-management https://www.g2.com/categories/treasury-management
  - x0x0 4y ago
    > too darned hard for rich people to do Yeah, this is some ideologically driven smearing of people who are literally like I want to stick my seed round in a checking account and not have that disappear. For what it's worth, I'm not rich; I'm like a hundred-thousandaire. (And not affected, though friends are.) Disappointing to see someone like you gloating that a bank screwed a bunch of small business customers. From reading your writing, I doubt you'd cosign "basic economic services like a checking account are use at your own risk" in almost any other area.
    - wpietri 4y ago
      Ah yes, my crazy ideology of "people should generally experience the consequences of their actions, especially when they're doing very well". I get that you want to be able to be handed millions of dollars and have somebody else take care of that for you. Who doesn't want that? I just don't understand why you think it's the job of poorer people to subsidize you if you take a risk with those millions and it doesn't pan out. > "basic economic services like a checking account are use at your own risk" I in fact don't cosign that; I've been very clear that I support mandatory FDIC insurance with its current very generous limit. I also support the FDIC's resolution process where they immediately pay out the $250k and then work hard to quickly pay a large portion of the remainder. That's a giant level of risk reduction. But if somebody is rich enough that they have millions in cash and haven't bothered to take basic precautions like "use two banks", I don't think that's a problem such that (much poorer) taxpayers should be obliged to make it all better. If it happened to a friend I would feel bad for them personally, of course. But not so much that I would be calling for a government bailout. Capitalism works because risks yield both gains and losses. People who don't like that should manage their risks.
closeparen 4y ago
We can absolutely be a society in which checking accounts are a pit of snakes which must be navigated by executive savvy and wit. It’s just going to be a much poorer one. The point is not to “protect jobs in Silicon Valley” per se, it is to maintain banking infrastructure as the sort of thing that just works (or gets urgently fixed) so that the entire economy can continue to rely on it, vs. entering a lower-trust regime where a checking account may as well be a stock portfolio.
- wpietri 4y ago
  The FDIC already exists to make sure checking accounts aren't a pit of snakes for 99% of the population. The entire economy can continue to rely on it just as it always has. Does this mean that rich people have to be more careful managing gobs of cash? Yes, but that has always been the case. Treasury management is a thing that exists both as a thing people do professionally and as a service you can buy. I understand that some people are young enough that they have either not heard about bank failures or did not feel like it applied to them due to being in a period that was very good for banks. But they are and they do: https://www.fdic.gov/bank/historical/bank/ https://www.fdic.gov/bank/historical/bank/
  - closeparen 4y ago
    You mean, personal savers and very small businesses can continue to rely on the banking system. That’s not 99% of the economy. Young people hear plenty about bank failures - specifically as a success story for big government, a problem we solved, such that depositors are secure these days. I recognize that startups are in a bit of a weird place where they might have a lot of money to manage before they are sophisticated enough to have a big finance team. If only there were some sort of entity specialized in dealing with their unique needs… oh wait.
    - wpietri 4y ago
      Yes, that's why I said "99% of the population", not "99% of the economy". But the economy's also going to be fine here. Most businesses with a lot of money understand that bank failure risk is just one of the many financial risks to manage. To the extent a startup wants to have millions of dollars but not hire somebody competent to manage that money, them's the breaks. The same thing would be true for startups that don't take security seriously, for example. I feel bad for the founders here, but no worse than I would for one who experienced hackers getting in and stealing the data. Even if they had hired "sort of entity specialized in dealing with their" security needs. Picking a bad vendor happens, and if you bet your company on a vendor choice in a vital area, well, sometimes those bets don't come out like you hoped.
dralley 4y ago
> Especially for the startup end of things, where we are aiming to disrupt other businesses. By lighting large piles of nearly-free Saudi money on fire to undercut sustainable businesses on price.

azinman2 4y ago

You know that not only startups use SVB right? Farmers and wineries do as well. And either way this is the economic engine of America - in its accounts lays the next trillions of dollars of GDP. It is unbelievably stupid to not find a way to make them whole for a black swan event.

pirate787 4y ago
This isn't a black swan event, it was run of the mill mismanagement.
- diab0lic 4y ago
  From the perspective of the bank this isn’t a black swan event, from the perspective of a smaller farmer or winery it is certainly a black swan event.
  - logifail 4y ago
    > from the perspective of a smaller farmer or winery it is certainly a black swan event Q: How much cash do small farmers / wineries have on deposit at their bank?
    - alonmower 4y ago
      Let's say a small farm or winery employees 20 employees and pays them an average of $50k a year. Holding three months of payroll alone will be over the FDIC limit, let alone other money they'll need to buffer all of their other expenses.
      - logifail 4y ago
        > Let's say a small farm or winery employees 20 employees and pays them an average of $50k a year "Show your working" ... https://www.bls.gov/oes/current/oes452099.htm https://www.bls.gov/oes/current/oes452099.htm > Holding three months of payroll [..] Three months of payroll ... in cash? I have two good friends who own and run wineries in France. Both of them are relatively successful, but neither of them have anywhere near 20 employees, for the simple reason that they can't afford to. The majority of the work is done by family members.

tolmasky 4y ago

Besides the trivially obvious recognition that people other than engineers work at companies (cooks, janitors, HR, etc.), realize also that, for example, Etsy’s sellers may be affected since the account used to pay them was at SVB. Of course, I’m sure someone here will explain that obviously some lady selling bowls in Michigan should have done due diligence on her platform’s bank of choice to make sure that they didn’t have any maturity risk. Anything short of that really just fundamentally represents business incompetence and deserves to be wiped out since Peter Thiel decided to cause a run at the bank two layers removed from her. But that will teach the correct lessons and punish the right people! Clearly Thiel should be rewarded for prudently advising everyone to remove all funds, while janitors and craftspeople on Etsy alike will finally learn the importance of marking to market treasuries.

shadowgovt 4y ago
Actually, for almost all of these companies, cooks, janitors, etc are contracted employees and work for the contracting company, not the startup. The startup retains a contract for services. This allows them to keep those employees at arm's length and not have to pay the kind of salary and benefits that their "real" employees enjoy. It has also great bonuses in that if the "real" employees want to abuse the snot out of those contractors (including really vile stuff, obvious violations of the equal employment act), the tech company and the contracting company are heavily incentivized to "solve" the problem by removing the contracted employee from the position. Employees in that position, should they want to take action, have to go through multiple layers of red tape and ambiguous responsibility and risk upsetting the apple cart for all of their peers, because the tech company is always at Liberty to cancel the entire contract to avoid a "problem" contractor. The whole system is a little bit rotten. And yeah, it sure does suck for folks who are going to get bit as clients of Etsy because Etsy didn't hedge bets. Maybe Etsy learned a lesson.
- tolmasky 4y ago
  It really sucks for Etsy’s sellers so maybe… Etsy learned a lesson? Here’s the confused lesson by association argument again. The majority of your argument is around learning lessons, but you momentarily acknowledge that perhaps there are in fact people hurt here who it would be hard to accuse of deserving it due to a lack of due diligence, but you then immediately resolve the cognitive dissonance by reassuring yourself that perhaps that will make the lesson Etsy learns that much stronger. The majority of your argument revolves around the idea that only rich people in this “rotten system” will be affected, or that this is an important lesson. When it’s pointed out that there are many types of employees who aren’t rich, you say they don’t count because they’re contractors, ignoring that even if true, which I’m not necessarily granting, it still doesn’t matter since that contracting job will still probably disappear and there is a high likelihood that they can’t just be immediately positioned somewhere new. The rich developer may have an easier time landing a new position than the cook getting a new shift from the contracting company somewhere new. But I suppose that’s irrelevant, because the point about cooks being contractors actually had nothing to do with the topic at hand of whether they deserve to be colateral damage. Rather, it was meant to derail the conversation into a long digression about how these contracting agreements further prove how “rotten” these startups are… and thus deserve to learn a lesson about treasury performance.

datavirtue 4y ago

Regular Americans spend every dime that comes in.

mullingitover 4y ago

> One can't escape the sense that if they've done the kind of budgeting that a regular American does, they will be fine. I can't escape the sense that if they've done the kind of budgeting that a "regular American" does, they're in deep trouble[1]. [1] https://www.fool.com/the-ascent/research/average-savings-account-balance/ https://www.fool.com/the-ascent/research/average-savings-acc...

shadowgovt 4y ago
Budgeting, not saving. It is entirely possible that the median salary in the United States is not enough to save on. But when you have nearly double that salary, what's the excuse for failing to save?
- mullingitover 4y ago
  I’d go with tens of thousands in student loans, combined with most jobs being concentrated in high cost of living areas.

zamnos 4y ago

> It's hard to dredge up deep, deep wells of sympathy This, by the way, is why ordinary Americans are suffering while the billionaires are winning and laughing at us. They have us fighting with each other for scraps. $120k/yr after taxes doesn't go very far at all for a family of four. Kids eat a lot of food! Sure, it goes roughly twice as far as $60k/yr does, and, saved wisely and not spent on yachts, cocaine, and girls, provides a bit more of a financial cushion in case of a calamity like the one we're in, but SVB's CEO made $4.8 million last year, which, budgeted by a regular American, is enough for several lifetimes. A software dev making $120k/yr, he is not. Have however much sympathy you can muster for software developers who, yes, have more than you do, but don't lose sight of the bigger picture.

shadowgovt 4y ago
We could break the system if we wanted to. Were software engineers to unionize alongside the contracted employees, it would provide a front that would make it basically impossible to operate startups without dealing more fairly. You can't run a business that has a building without someone collecting the trash, sweeping the floors, and keeping the whole thing from falling down. Worst-case scenario, fouhders decide to try and operate with-from-home employee teams to decrease contractors needed, and then the engineers win anyway. ... It won't happen because we don't want it to. But it could.