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Except depositors above $250k did not have depositors insurance. How is the government stepping in to provide insurance for people who didn’t have insurance not
by rhaway84773 4y ago
Except depositors above $250k did not have depositors insurance. How is the government stepping in to provide insurance for people who didn’t have insurance not socialism?
Or put it another way, there was absolutely no capitalistic private market solution to this. VCs weren’t on Twitter demanding Chase to come in and save the SVB depositors. They were asking the government. If this was a simple non socialist, capitalist intervention, how was it that only the government was willing to do it?
- DubiousPusher 4y agoThe funny part is that there are free market solutions. Many in fact. These people were simply neglecting to avail themselves of those solutions and now want bailed out.
- erulabs 4y agoYou're missing the important fact that SVB did not have zero assets. The difference between the value of assets on their books and the amount they owed depositors is, AFAIK, not a public number outside of speculation. It might be as small as a 5% split, which they've said will not fall on the taxpayers. The government acting as a backstop and regulator to the banking system is one of the fundamental features of the United States, and was one of the most important decisions the framers made. I'm not trying to defend the fed here, but these words have meaning. Socialism is not just the government taking any action whatsoever. Also, I'm not sure who was begging for the government to save SVB, and I'm loath to defend a straw-crowd, but that doesn't seem a fair characterization of what happened.