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Silicon Valley Bank unmasks the hypocrisy of libertarian tech bros
- deleted 4y ago[deleted]
- colesantiago 4y agoAs usual it is the VCs that is the cause of all of this and this entire bank run Bringing the startups they invest in begging to their knees, putting all their eggs into one bank. It almost works like a ponzi scheme. socialism for them, capitalism for everyone else.
- simonh 4y agoI agree with the criticism in general, but in this case the restructuring of these banks will be entirely paid for from their assets, and by a levy on other banks. No public funds will be used.
- MrMan 4y agothat money will be stolen from all the other banks customers. this is not a case of "hypocrisy" its theft.
- ceejayoz 4y agoThe other banks are most certainly going to pass the FDIC increased premiums along to all of us, though.
- simonh 4y agoDriving up their fees will make them less competitive, so they will lose business, or have to compete more aggressively for it. Or the increased costs of banking services will reduce consumption. So yes you're right to a point, but none of this is in any way good or neutral for other banks. Their share prices have taken an absolute beating.
- gruez 4y ago> As usual it is the VCs that is the cause of all of this and this entire bank run >Bringing the startups they invest in begging to their knees, putting all their eggs into one bank. It almost works like a ponzi scheme. Why blame the VCs and not the bank itself for its poor investment choices (ie. buying a bunch of long dated bonds/MBS)?
- tmaly 4y agoIt felt like they only gave one guy as an example and tried to spin a tweet from someone to YC. It seems mostly a fluff piece with little meat to it.
- bsenftner 4y agoLibertarian: an individual lacking in understanding of secondary effects, in effect, actual reality.
- parker_mountain 4y agohttps://www.newyorker.com/humor/daily-shouts/l-p-d-libertarian-police-department https://www.newyorker.com/humor/daily-shouts/l-p-d-libertari...
- chrischattin 4y agoIs there a political philosophy less understood, or more mischaracterized, than Libertarianism?
- Veen 4y agoMaybe, but the people of influence who profess to be libertarians are not exactly committed adherents of a carefully thought-out libertarian philosophy (except maybe Thiel, although his libertarianism has a religious caste). In general, the SV libertarian is an egotist who talks up a poorly understood distortion of libertarian thought because it's a fig leaf for their rapacious amorality, and they cast off its tenets whenever it suits them.
- Machado117 4y agoCommunism, probably.
- stephencanon 4y agoBy its own adherents? Probably not.
- gitfan86 4y agoIn general most people fit the widest definition of Libertarianism which is: "People should be free to do whatever they want except for these specific conditions which I consider important and do not negatively impact me very much but may negatively impact others a lot"
- 4y ago
- TheAlchemist 4y agoYou know what I hate the most in all of it ? There was no panic to begin with - in the worst case scenario, the cut for depositors was definitely less than 10%, most probably 0. The Jason Calacanis, David Sacks & co, decided that even that small % of losses were enough to start a bank run in order to get government involved - and make sure they are made whole. Stress on 'THEY'. Just look at their recent tweets - did Mark Cuban said today that unlimited FDIC is a very bad thing - should 'Never' be a thing ? Amazing stuff. (edit: Here is the link => https://twitter.com/mcuban/status/1635282882259476486?s=20 https://twitter.com/mcuban/status/1635282882259476486?s=20 ) Make no mistake - the 3 banks in trouble (there will be more. Once the fire is lit, it's hard to stop it) were extremely specific and were crypto / VCs banks. It's not random banks that failed. They failed specifically because of business they were servicing.
- huffmsa 4y agoGotta keep those 2020-2022 vintages on a slow decline so they can raise the next fund.
- nailer 4y agoThe bank had long term bets if government bonds that after the rate change massively weakened their value, threatening the bank’s capitalisation levels. This has nothing to do with their clients.
- TheAlchemist 4y agoThis has everything to do with their clients. Do you know any other bank recently which faced 42B $ of withdrawals ? Thing is, this bank was servicing people basically juicing the system of free money. This cut both ways.
- qwytw 4y agoWhat's the direct relationship between these two. Are you saying if all of those deposits were kept in JPM the same would have happened? Why?
- usrbinbash 4y agoNo! Yes! Oh. But rest assured, it's not just the libertarians and not just in the US. Europe is currently facing shortages of skilled labour in many sectors of industry and business, what with the baby boomers entering retirement age in droves. Market forces of supply and demans would dictate that since the resource (skilled labour) demand increases, and the supply decreases, the price (wages) has to go ... upwards. Basic economic theory of free markets. So, does that happen? With few exceptions, nope. Wages continue to stagnate. Instead, lobbyists clamour for slashing social security to make part time jobs and retirement less desirable.
- Tade0 4y agoIs this the reason behind France trying to increase retirement age despite having a balanced budget in this regard and protests?
- DeathArrow 4y agoBasically yes.
- Sharlin 4y agoYes, absolutely.
- yardie 4y agoYou can imagine you’ve worked your whole life chasing the brass ring. And then the government goes, “lol, just kidding!”, and moves the goal posts 50 meters. And this affects millions of people who are very pissed off and vocal about it.
- Tade0 4y agoIf the reason stated above is true, it's quite the dick move to do so. My parents worked a few years into retirement, but that was only because my country's pension budget is far from balanced, so they needed the extra income.
- favaq 4y agoEverybody is a hypocrite, it will be news when someone isn't one.
- dsfyu404ed 4y agoWhen people put their money where their mouth is HN shits on them for "voting against their interest".
- blahblah1234567 4y ago[flagged]
- the_gipsy 4y agoOh don't be such a snowflake.
- blahblah1234567 4y ago"Insulting you helps us recover from your toxicity." ...It's like... What? Are you joking? This is precisely what I mean. A lack of consistency-- it really betrays the concomitant lack of rational thought. "I side with Chairman Mao and Wallstreet ESG-metric-driven Bankers! Now Get to work driving our economy, so we can simultaneously complain about you while also taxing you to redistribute your income!" It would be all so tiresome if it wasn't so tragically entertaining.
- tingol 4y ago[flagged]
- TechBro8615 4y agoYou're right that any reference to "tech bro" is revelatory of the author's motives, but the people downvoting you are also right that it's not something over which to get your knickers twisted.
- the_gipsy 4y ago> tragically entertaining a bit dramatic, aren't we today? don't be such a crybaby.
- Jensson 4y agoShaming men when they complain is toxic masculinity. Men have feelings too and that is ok.
- TechBro8615 4y agoI find this to be highly offensive! (I actually don't. In my case it's self-deprecating humor. If you're in a privileged position then you should be able to make jokes about yourself and take some hits from people who don't like the status quo that helped you get there; otherwise you have no right to criticize other people for their own set of privileged circumstances.)
- sokoloff 4y ago> HSBC bought the company’s British arm, which was still largely solvent, for £1. I suspect “insolvent” is probably an adequate synonym anytime you have to use a qualifier word on “solvent”.
- tomesco 4y agoTrue. Expected to remain solvent would be more clear.
- DeathArrow 4y agohttps://archive.is/rqRII https://archive.is/rqRII
- pshirshov 4y agoIn general I agree, but weren't libertarians pushing for physical golden money?
- frankreyes 4y agoThere's no general agreement among libertarians on what's the best money. I'm against a gold standard because it's dumb. Gold standard worked in a time of industrial revolution, which cancels out the negative side of gold standard. Costs and prices went order of magnitude down and then there was more gold for everyone. Literally the steam engine and electricity and light bulb and radio were brought at the time of gold standard.
- pshirshov 4y agoOkay then, how would you build a trustable banking industry without some certain central authority?
- frankreyes 4y agoWe can't do that. We can't eat, drink or use money as shelter. It's with food, liquids or bricks that we can do that. There was an argument to be made during the start 1900 about "availability" (liquidity) of money. That's all gone in the past. Money is just an account system, and it's all just numbers in a computer database. We can't eat numbers. Technology made money extremely available. That also made it extremely fragile. The best system we have so far is to have a "free market" of currencies, banks, and customers. The three of them together via trial and error decide what's best. And during that process, mistakes will be made.
- KHRZ 4y agoThen again, what they invested their money in was government bonds, which lost value due to the government increasing the interest massively after selling those bonds at a low fixed interest. If a business did that, they would win the scumbag of the year prize.
- martythemaniak 4y agohttps://study.com/academy/lesson/duration-risk-definition-examples.html https://study.com/academy/lesson/duration-risk-definition-ex... This is a separate concept from Credit Risk, which is how risky the borrower is. The bank did not manage its risks, but it was salvageable, they just needed to raise money, but then the VCs organized the bank run.
- neilwilson 4y agoThe bank run should have been neutralised by the Fed lender of last resort function. The problem was that the bank didn't have the collateral or the income to pay the Fed's rate. The assets the bank had were poor quality and didn't generate enough income. If the Fed won't lend, why would anybody invest in the bank. Far better to turn up at the auction and pick up the assets for cents on the dollar.
- makomk 4y agoYes, and government banking regulations seem to have been almost entirely focused on credit risk rather than duration risk because they were focused on the last crisis - banks were effectively actively penalised for keeping their money in higher credit risk but lower duration risk investments like corporate bonds instead of minimal credit risk but high duration risk ones like long-term treasury bonds and government-backed MBSes. There's been an entire wave of articles in the left-leaning parts of the press blaming this all on libertarians and corporations convincing the government to lift regulations created in the wake of the 2008 crisis and causing a repeat of it by doing so that just completely ignore this distinction.
- TechBro8615 4y agoIn the interest of fairness, David Sacks makes some compelling counterpoints here: https://twitter.com/DavidSacks/status/1635747517752283137 https://twitter.com/DavidSacks/status/1635747517752283137
- synu 4y agoWoke did it, in collision with Biden! Who could have ever seen that coming from Sacks.
- beefield 4y agoFunny. First "its collapse was first and foremost a result of its own poor risk management and communications" and then a looong rant how it actually was fault of Biden, Democrats and loose monetary policy. So far I have not seen any evidence that the real reason was anything but "poor risk management and communications" A couple of percentage points change in interest rates is not a thing that should bring your bank down. If it does, you have failed, no excuses.
- pdpi 4y ago> A couple of percentage points change in interest rates is not a thing that should bring your bank down. If it does, you have failed, no excuses. In context, it's even more egregious — Rates after that "couple of percentage points change" are still historically quite low, it's just that we've had a completely aberrant run of near-zero rates for the last decade or so. It was a matter of time until this correction happened, so preparedness was about "when", not "if", it happened.
- sonotathrowaway 4y agoThe democrats and minorities forced them to hire conservative lobbyists to weaken regulation, then forced them to refuse to hedge their interest rate risk.
- Semaphor 4y agoThe main counterpoint (to this article, he seems to mainly talk about others) seems to be "it was no bailout", and "insuring 100% of deposits is small government and totally logical for me as a stance". The former I can see, the latter I’ll have to put clearly in the article’s column.
- DrBazza 4y agoThe article is an attack on Peter Thiel, not SVB. Also seems thin on facts, and just "SVB is getting bailed out, and hence some rich guy stays rich". Given that both the Fed and the Bank of England have decades-old laws protecting the financial system long before (tech) billionaires, this article seems even more ridiculous. Context: https://en.wikipedia.org/wiki/New_Statesman https://en.wikipedia.org/wiki/New_Statesman > Today, the magazine is a print–digital hybrid. According to its present self-description, it has a liberal and progressive political position.[3] Jason Cowley, the magazine's editor, has described the New Statesman as a publication "of the left, for the left"[4] but also as "a political and literary magazine" with "sceptical" politics.
- waihtis 4y ago[flagged]
- mateus1 4y agoSo “tech bro” is a slur now? This seems a bit exaggerated
- mc32 4y agoIt’s become an acceptable way of saying “tech thug”. You don’t like someone in tech, you call them a tech bro. Bro by itself is neutral. You don’t like Bill Gates due to his unethical behavior? You call him a tech bro.
- PM_me_your_math 4y agoBut Gates doesn't look like a bro. He's more like a Tech Grandpa
- mc32 4y agoOk, in that light, we might call him a tech geezer.
- 4y ago
- DeathArrow 4y agoThe article is kind of low quality. First they name Peter Thiel as the poster child for libertarianism. Second they accuse libertarians being against state intervention. Third they say libertarians are asking for state help, so they think they've found a kind of paradox. But Peter Thiel withdraw his money from SVB in time and he didn't ask for the government's help. So the article authors are kind of contradicting themselves. Also, blaming libertarians for being against massive state intervention in economy is akin to blaming a fish because he swims in water. It's all what that fish is about and knows to do.
- jjgreen 4y agoWhat happened to third?
- zaroth 4y agoThey told you, it’s a low quality article!
- hospitalJail 4y agoWhat makes Peter Thiel a libertarian? I thought he went full Trumpism, which is basically the opposite of libertarian.
- deleted 4y ago[deleted]
- HDThoreaun 4y ago[flagged]
- fancyfredbot 4y agoThere's clearly a lot of pent up anger directed at VCs and big tech. The collapse of SVB may not actually be their fault, but it still seems to have brought all of this frustration out into the open. I'm not really sure why there is so much anger - yes they were hypocritical here but I'm not sure people would be so keen to point that out if they didn't already have an axe to grind!
- FollowingTheDao 4y ago"I'm not really sure why there is so much anger" Maybe because you are one of the beneficiaries?
- fancyfredbot 4y agoTo be clear I wasn't trying to say people shouldn't be angry with VCs. I'm expressing some doubt that the reason for the anger is SVB's collapse or their hypocrisy around it. Whether you like VC or not, they aren't responsible for the SVB's investment choices or its undercapitalization and so the outflow of anger following SVB collapse feels misplaced. (Edited for clarity)
- FollowingTheDao 4y agoYes, the hypocrisy is part of it, so I have no doubt hypocrisy was the trigger for the expression of the anger. People are angry everyday because we are being kicked out of housing and looking at rising process of everything else and we get zero bailouts.
- fancyfredbot 4y agoI think that being angry with bailouts for people who don't need them is a lot more understandable than anger at hypocrisy. I don't think any taxpayer money will go to rich VCs though, and I hope the losses on SVB's assets will be absorbed entirely by equity/bond holders.
- alphanullmeric 4y agoIt doesn’t, libertarians will still tell you the same thing. Don’t take from me iff you don’t give to me. On the contrary, it seems like the authors of this article would like people forced to pay for insurance to not be compensated by them.
- dsfyu404ed 4y agoAsking for deregulation when it suits you and government intervention when it suits you is like the right leaning version of the over-policed upper middle class suburb that's dotted with "defund the police" yard signs. The people trying to play both sides as it suits them are just selfish and unprincipled and in both cases the movement they profess to support would be better off without them. At some point a line has to be drawn. If you advocate for X or Y you cannot in good faith claim to be a member of political movement Z.
- scarface74 4y agoOr the “Back the Blue, we are a nation of laws”. But “defund the FBI and the IRS”
- alphanullmeric 4y agoYou’ve already forced me to pay for insurance. Is it me that’s the hypocrite for wanting to be compensated?
- ceejayoz 4y agoYou’re asking for the insurance coverage to exceed what you paid for. If you insure a Bugatti Veyron with a policy that maxes out at $50k, that’s not the insurer’s fault.
- alphanullmeric 4y agoI’m not asking for that. Some people are and I don’t support it.
- 4y ago
- zpeti 4y ago[flagged]
- FollowingTheDao 4y agoIt is sad that populism is now just knee jerk associated with "right wing". What do you think Occupy Wall Street was? Populism refers to a range of political stances that emphasize the idea of "the people" and often juxtapose this group against "the elite". You all do not see the people who are suffering. First it was us poor nobodies (like me), but now it is creeping up into the middle class.
- dang 4y agoRage and indignation routinely get lots of upvotes. That's a weakness of the upvoting system—maybe the biggest one.
- BlueTemplar 4y agoWait, when did "tech bro" went from an oxymoron joke about smart morons, and turned into a turn of phrase people accept without blinking ? (When scammers overran cryptocurrencies I guess ??)
- TechBro8615 4y agoThank you for remembering the etymology... the earliest instance I recall is some YouTube video circa 2010 making fun of mediocre programmers ("brogrammers") at Facebook who got the job based on fraternity connections instead of skill. There were sunglasses involved in the skit. It was at most something you would call yourself ironically (in fact, at least according to my recollection, even "bro" itself was originally a perjorative used to refer to a caricature of fraternity brothers interacting with each other - "ok, bro" etc. - but which they themselves later embraced and adopted).
- BlueTemplar 4y agoIIRC that itself came from gang members trying to have stronger ties (since not actual brothers) ?
- blahblah1234567 4y agoWhat is "tech bro"? Is that like... denigrating a person based on their gender... ?
- meghan_rain 4y agoYes, ridiculous that this is allowed here, and I say this as a girl. @dang?
- blahblah1234567 4y agoThe irony is that the same author, Emma Haslett, recently wrote an article about women facing increasing child-care costs. https://www.newstatesman.com/business/2023/03/childcare-costs-fail-mothers-economy-women?utm_medium=Social&utm_source=Twitter#Echobox=1678288885-2 https://www.newstatesman.com/business/2023/03/childcare-cost... In her lefthand (main thread article): Denigrates men interested in technology jobs which pay well and are intellectually arduous to even learn let alone practice. In her righthand (article I link to above): Complains that women need more money for childcare. Gee, it's almost as though left-leaning journalists are trying to drive men and women apart. "Men, as a woman, I tell you: You're terrible! Now go fund women's lifestyles, we need your money!"
- joseph_grobbles 4y ago[dead]
- smcl 4y ago[flagged]
- GlacierFox 4y agoRidiculous that the phrase 'tech bro' is allowed here? Why wouldn't it be allowed here? It's ridiculous the things people try and censor...
- blahblah1234567 4y ago
- DeusExMachina 4y agoThe argument in the article is weak. First they build their case against libertarians going at length against Peter Thiel, Elon Musk, and Larry Page. Then, they point at the hypocrisy citing Garry Tan, David Sacks, and Bill Ackman. These are different people. Where is the hypocrisy of Thiel, Musk, or Page? It makes me think there is none since they can't provide examples and they have to switch. But I guess building an article on the second set of people, which is far less known than the first, would have not attracted enough clicks.
- michael_vo 4y agoPrinciple: there should never be a single point of failure in a well designed system. This is really just a lesson that we will keep re-learning and exposing as ecosystems get massive and companies make decisions at scale.
- _trackno5 4y agoI don't know how we can remove that point of failure though. Although we don't think about it, banks fail and are designed to do so. We just try to reduce the chances of that happening.
- frankreyes 4y agoHypocrisy? They are the ones who saw it coming, ran away, and survived the debacle. But hey, let's just find a scapegoat. Just like the 2008 crisis let's just blame it on Michael Burry and those who looked under the layers of bureaucracy
- my_city 4y agoThis is not tech bros. Capitalism itself is the problem. Capitalism always socializes loses and privatizes profits. Do you think that democrat bankers like Jamie Dimon don't run for government assistance at every chance they get? This is not a problem of a few "libertarian tech bros". The capitalists run the show, they run the government.
- 988747 4y ago[dead]
- mejutoco 4y agoCapitalism can work, it just has never been implemented properly in reality. Only half kidding.
- frankreyes 4y agoCapitalism would get your bank and their depositors bankrupt, end of story. It was the USSR that were using heavy machine industry to finance and subsidize unproductive companies, leading to monopolies and corruption.
- my_city 4y ago"Capitalism would get your bank and their depositors bankrupt, end of story." Except that's not capitalism. America is real, actually existing capitalism, and only poor people get bankrupt, not banks or bankers. Capitalism is not about fairness or justice or whatever ideal. Is about maximizing profits and exploiting wage labor. "Socializing" loses maximizes profits, so that happens. Poor people getting bankrupt maximizes profits, so that also happens. "It was the USSR that were using heavy machine industry to finance and subsidize unproductive companies, leading to monopolies and corruption." I'm not sure what the argument is here. Nationalizing industries is not socialist per se. But you said it yourself "subsidize unproductive companies". So the objective was not to maximize profits, but to protect national interests and the development of socialism. Also, the USSR has a long and complicated history, from Lenin's War communism to NEP, to rapid industrialization, to perestroika, to liberalization. So we can't make sweeping generalizations. But is unfair to talk about "monopolies and corruption" if you look at "western democracies" today. Monopolies. You realize that today only 5 or 6 companies (Unilever, Nestlè, Pepsico, etc.) control the vast, vast majority of food in the world? And "corruption". Corruption is legalized in the USA and banks and tech companies freely decide what the government should or should not do, get tax cuts, grants, subsidies, low-interest loans and so on. That's corruption through and through.
- hparadiz 4y agoThe premise of this article is dumb. All tech bros are libertarian? Oy vey. I have no horse in this race. I work for a retail/porn company in LA.
- roenxi 4y agoI appreciate that this might be a little tone deaf, but what the article is accusing Thiel of isn't hypocrisy. It is a completely consistent libertarian position to observe that government intervention gives people an unfair advantage and then attempt to take advantage of that advantage if people make it clear they aren't going to change the situation. I'm of a very libertarian bent and think the money printing is stupid, but I'm careful to position my assets to take advantage of the money printing. That is not necessarily honourable, but it is consistent.
- neilwilson 4y agoDepositors are not investors in a bank. They just want a checking account and to make payments. Why should they have to waste time spreading $250K chunks around multiple banks? It's inefficient. Equity and bond investors are the only ones who should lose their shirts when a bank fails. If we're the have a distributed payment system, then full deposit insurance and a flexible lender of last resort is the only sensible approach. The alternative is everybody has their payment accounts at the central bank, which will then mean, by accounting identity, that the central bank will end up as the only depositor in every bank. Which given that the central bank is the regulator who should be checking asset quality is perhaps the way to go. That way when a bank fails, the entity responsible for ensuring they don't stands the loss. We need heterogenous banks who will lend on different criteria. Otherwise we'll end up in the situation where only the propertied will get bank liquidity. However heterogeneity means that some banks, like SVB, will inevitably fail when they get it wrong.
- FiberBundle 4y agoWhy do you need to hold that much cash in deposits though? There are alternatives that provide essentially the same kind of liquidity such as money market funds, which are used by other businesses. The rules were pretty clear: deposits are insured only up to $250k, anything above that isn't risk-free. If you don't want to have the slight overhead of finding alternatives for anything that supersedes that amount, you should have had to accept the risk that you might lose anything above those $250k.
- intev 4y agoAre you serious? How do you think companies that earn over 1M per month operate? Do you think they all receive the cash on the same day and make the payouts on that day itself? > you should have had to accept the risk that you might lose anything above those $250k. This laughably impractical. If you run any medium/large SaaS company you have payments continuously rolling in and you have to build up a balance to pay the salaries. The bank account is in a constant state of flux and a lot of times its at multiples of the insurance limit because a certain payment hasn't gone through yet, and a large advance just came in. Are you expecting every company to risk manage these large amounts in real time? Is that where companies should be spending their resources on? What's the point of having financial institutions and regulations when you're expected to micro manage basic aspects of the financial rails the whole economy runs on.
- LatteLazy 4y agoI don't understand why bailing out DEPOSITORS is a big deal: * when I put money in a bank, I am just depositing it, I am not "investing". If I wanted to invest (take risk for a chance of profit) I would buy bonds or shares etc. I expect the money to be safe and accessible. * the "product" being sold by SVB is a bank account. It's low interest (if any at all) and comes with a bunch of charges (so most people will not even break even). If they were offering a 10% interest current account, that might be different. But until then no one has been compensated for the risk of losing their "capital". If I leave clothes with a dry cleaner or tools at a storage unit, those are mine. I am not "investing" my clothes in the dry cleaner. The same should apply for standard, low interest, current accounts for individuals and businesses. Maybe in the 1950s, people only used accounts for saving, and they were expecting a return and it was the main way for people to invest. At the same time people/businesses did most of their business in cash (literal folding notes etc). But the opposite is true now. People and Businesses need a risk free account to make a receive payments. They're not looking to be "on risk".
- yathaid 4y agoI am by no means an expert. The bailing out was needed due to risky behavior. The risky behavior was enabled by de-regulation starting from Clinton. (Most de-regulation related systemic flaws today can be traced back to his admin) "Tech bros" support this de-regulation. Any regulation is govt. overreach. "We know how to handle our shit" attitude all over the place. Yet when the downside of the risk comes, it is govt. money that bails them out. Regarding your last line. How much of your stuff (something that is fungible, like money) needs to be actually be in the unit while the storage company can loan out the rest is the question. There can be more of the stuff in circulation than there are resources. As long as not everyone is asking for their stuff back, the storage company can keep juggling balls in the air.
- gruez 4y ago>The risky behavior was enabled by de-regulation starting from Clinton. (Most de-regulation related systemic flaws today can be traced back to his admin) >"Tech bros" support this de-regulation. Any regulation is govt. overreach. "We know how to handle our shit" attitude all over the place. Surely this doesn't apply to all SVB depositors? Or do you think the entire SVB deposit base was card carrying "tech bro" members? Or suppose 80% are, what of the remaining 20%? Should they get ruined because they dared to associate with "tech bros" and/or didn't do financial risk modeling properly? Or maybe the government should make the bailout conditional on whether you were a "tech bro" or advocated for deregulation?
- imgabe 4y agoThe crisis was created by the Federal Reserve in the first place printing trillions of dollars and then jacking up interest rate. That wouldn't happen in a libertarian system.[1] It's not hypocritical to call on the people in charge to clean up the mess they created. [1] Not to say that a purely libertarian system would be perfect and without other problems.
- jmyeet 4y agoLibertarians are, and always have been, ridiculous. It's nothing more than Reagan-era deregulation. And just like trickle-down economics there is a mountain of evidence to show how ridiculous it is that gets ignored. Watch this space. The narrative ofn this will shift to how the FDIC's actions were unnecessary once the capital-owning class realizes they got hosed here. The depositors got paid, banks (through the FDIC insurance fund) paid for any shortfall and SVB shareholders were left holding the bag. We could tackle inflation with taxation. We certainly can't have that. So we're left with interest rates. Well, VCs like--even depend on--zero interest rates. So they don't like that either. But it's better than getting taxed. So Sacks, Calacanis, Elon and the like will chirp about this on the timeline and frame it as a government failure. These libertarians are really just conservatives. That too is self-serving ultimately. Don't lose sight of that.
- newmac 4y agoDavid Sacks wants to run for President. He watched Trump's election closely. He wants to be the smart guy that uses the idiot's playbook. He is working hard to get placed on as much media as possible as a commentator. He is connected to many of the richest and most powerful people in the country. He is, at the end of the day, a bored billionaire with some very pedestrian ideas. He does go to great effort to shout them louder. He does seem to have some serious ego issues, but I guess what politician doesn't? I think the hilarity of Calacanis literally tweeting his own similar ideas is that it was a transparent attempt to be louder. ie: he just didn't feel heard about his ideas, so they needed amplification.
- whywhywhywhy 4y agoThis argument seems about on the same level as criticizing someone against capitalism for using an iPhone.
- O__________O 4y agoReality is there are rarely to the death true libertarians or authoritarians, only those who lacked the opportunity in the monument to change their positions when significant threats or opportunities are presented. The optimal degree of control in a system is based on context, both for the individual and the system itself. To think otherwise is just illogical and discards the complexity of the world for a theoretical utopia. Anyone that believes to the death libertarian bros exist doesn’t understand the people they’re referring to — which to me is a larger issue than people behaving rationally.
- pelorat 4y agoLibertarianism is just a fancy word for anarchy. Never trust anyone who calls themselves a "libertarian", they are insane.
- baryphonic 4y ago(Disclaimer: I am not a libertarian, though I was once.) These arguments have a fundamental flaw, arguing that a libertarian enjoying some government benefit is "hypocrisy." This is nonsense. Libertarian tech bros pay into our system just like everyone else. Given the progressive income tax, those who are billionaires likely pay more in years where they make money than just about anyone else. So if the government is in the position to offer money, what good does it do for them to refuse? If they refuse, will the government be embarrassed and adopt libertarians' preferred policies? It's no more hypocritical than a socialist defending her private property. Personally, I think if libertarians are serious, they should seek out every government benefit they're qualified for, and encourage everyone else to do the same. If libertarians are right, then the shaky foundations of the Progressive system can be toppled over by overuse. I think the real thing being unmasked is that libertarianism is often ideology without grounding in reality. They can't account for the world of second bests, and the Progressive system has twisted and destroyed so much of what was once free that getting to a libertarian world would be like a society-wide kernel panic. Thiel deserves credit for being one of the (quasi-)libertarians who seems to recognize this and has attempted alternatives like that seasteading thing, though they typically haven't gotten off the ground.
- sf_rob 4y agoI think your broader point is generally true and often missed so have an upvote, but in this case the FDIC is going beyond it's stated policy. Demanding that the floor of the FDIC's guarantee be lifted/ignored seems distinctly anti-libertarian regardless of whether it was the right thing to do practically. Draining a substantial portion of the FDIC's insurance program's funds seems anti-libertarian. Refilling that portion through (likely) additional requirements on banks that didn't have these issues seems anti-libertarian. I guess you could make the broader point that people comfortable with government intervention would have argued for full depositor guarantees, so in some since libertarians are playing the same game but that seems much more tenuous to me. Per your general point, it was very well written! I like to say that you aren't a hypocrite for playing by the rules of checkers even if you wanted to be playing chess but were overruled.
- 4y ago
- blahblah1234567 4y ago"It was particularly unfortunate that this was happening to a sector that has historically rejected state interventions of any kind, railing against attempts at heavier regulation and insisting all its problems would be solved if only the government would just back off. " What an utterly silly claim, demonstrating the author's ignorance. The IT industry, based in Silicon Valley, worked hand-in-hand with governments at all levels from municipal to federal-- taking subsidies and giving innovations in return. Not only that, but technologists rejecting state intervention?! California is THE nanny state-- California & the Bay Area are hot beds for demands for government intervention-- particularly of the neomarxist variety. She doesn't bother to state a premise, she just assumes the reader takes it at face value.
- madsbuch 4y agoWhen I started a company in Denmark, we were made very aware that we were not insured by the national depositors insurance schema and that we had no protections. We were offered to buy insurance for e-banking theft and other types of fraud _and_ insurance for our deposits. Is it really the case, that Americans assume to have all these sorts of insurances taken care of automatically?
- packetlost 4y agoFor individuals (or rather, up to $250k UDS per account), it is. There's other opt-in systems for businesses that have different risk profiles.
- ianai 4y ago“On June 16, 1933, President Franklin Roosevelt signed the Banking Act of 1933, a part of which established the FDIC. At Roosevelt's immediate right and left were Sen. Carter Glass of Virginia and Rep. Henry Steagall of Alabama, the two most prominent figures in the bill's development” https://www.fdic.gov/about/history/ https://www.fdic.gov/about/history/
- devnullbrain 4y agoHow reliable is the insurance? In other words, how bad would things have to get for it not to pay out?
- madsbuch 4y agoThat would be a part of the terms – we didn't get it, we knowingly took the risk.
- devnullbrain 4y agoI was thinking more about counterparty risk. If it gets bad enough, your insurer won't exist any more, right?
- exabrial 4y agoI’m glad we’ve identified the boogy man. I was waiting for the political slant, it finally arrived
- BurningFrog 4y agoIt's always the people we already hated who caused the bad thing!
- hospitalJail 4y agoThe only sector more regulated than Banking is Medical. But yes, one former libertarian = Libertarian tech broooo
- jtr1 4y agoIt’s either the techbros or the wokes, choose your own adventure
- gargs 4y agoThe irony is that regional smaller banks would now be supporting larger banks with insurance contributions if unlimited deposit insurance becomes a real perpetual thing.
- anonymouse008 4y agoUm, no. The true libertarians would rather burn down the Federal Reserve and enjoy the whipsaw's of market dynamics that actually allow for economic mobility. No one can buy jacksh*t in terms of assets with this 'controlled demolition' aspect. Every single market participant with means is always prepared for a buying opportunity. The ones 'pulling themselves up by their bootstraps' cannot. So, heck yes, you scream and yell at the fools that started all of this. We gave away too much money, made money artificially cheap, then tried to pull the e-brake when it was too late. Truthfully the only critique is the hypocrisy of enjoying high valuations due to the idiocy of monetary and fiscal policy.
- goodgoblin 4y agoit just bears remembering that whenever anyone in SV says "government bad!" - the government saved their asses
- _yid9 4y agoEveryone’s a libertarian with respect to their own liberties. It’s only the liberties of others that are up for debate. So when I see “libertarian tech bros”, I laugh, because it’s clear that it is only envy speaking. Enlisting the arm of the state to protect your liberties is always “just” - when someone else’s liberties are protected, it is “unjust”. Bearing the consequences of one’s own actions is now widely considered as fundamentally unacceptable - the consequences must be borne by society: ideally, by your political adversaries, to be most “just”. This is unlikely to end well.
- qudat 4y agoI really don't understand the argument against Thiel. He might have help cause the bank run ... but he used his own influence in the market to withdraw all of his money. He took matters into his own hands without leveraging government intervention, right? That sounds as libertarian as it gets. What am I missing?
- monero-xmr 4y agoA standard straw man for the political left is, "These people are libertarian, look how un-libertarian they are!" ignoring all of the evidence and facts. https://reason.com/2023/03/13/everyone-is-learning-the-wrong-lessons-from-the-silicon-valley-bank-collapse/ https://reason.com/2023/03/13/everyone-is-learning-the-wrong...
- rdevsrex 4y agoWell because it's true. It's beyond clear that the rich get bailed out. It's libertarianism on the way up, socialism on the way down, but only for the rich. Would that we respond as fast to the needs of ordinary people as to SVB depositors.
- tekknik 4y ago> Would that we respond as fast to the needs of ordinary people as to SVB depositors. Didn’t they? And aren’t we on the brink of recession due to massive gov handouts? This comment seems to ignore recent history to try to promote socialism.
- elicash 4y agoYeah, the article opens with Thiel but doesn't actually claim he did anything wrong. It then shifts to comments by David Sacks "who is a friend of Thiel" for hypocrisy in comments. Which, I think, might be fair to say of Sacks but not really fair to attribute to Thiel at all, or to the valley in general. In defense of the article, it never directly states that Thiel is a hypocrite. He's at first included just because it lists actions he took. But there's an obvious implication being made later, and not just because of the title. That said, I think Thiel's anti-democracy views ("I no longer believe that freedom and democracy are compatible") are terrible and worthy of criticism for different reasons altogether.
- SamPatt 4y agoSilicon Valley isn't libertarian. All my feeds right now are full of libertarians who are upset about this. The bailout itself isn't the main issue, it's mainly the Fed's irresponsible policies over decades. They kept interest rates too low for too long, contributing to high inflation, then quickly jack rates to fix the problem they caused, then when banks begin to fail because of this rapid interest rate swing they fix that problem by rendering the FDIC $250k deposit insurance meaningless, furthering moral hazard, and to fix that problem they will...
- hersko 4y agoThis article fails to make a valid point. It starts by talking about Thiel as the epitome of the libertarian venture bro, and how they are all asking for the government to step in now that the banks are failing, but then goes on to say that he got all his money out on time, no government intervention needed. ??
- DonnyV 4y agoPrivatize the profits and socialize the losses. Capitalism is failing and its on its way out. It doesn't work and only enrichs a hand full of people. No matter how many rules you put in place to regulate it.
- Wyoming23 4y agoDang, how does this title not qualify as flame bait?
- hk1337 4y agoThe title, and this is the article's title, screams angst. "Ha, gotcha!"
- aww_dang 4y agoPeter Thiel supports libertarian causes. Larry Page suggested there should be an upper bound on laws. Presumably that would be somewhere below restricting everyone from doing anything. Yet, the article doesn't quantify what a libertarian is in any meaningful context and how it applies to the topic. Libertarian has become an amorphous category partisan writers can hurl at their opponents. Meanwhile, canonical libertarian content is highly restricted on this site. When it is posted it is often dismissed out of hand based upon the source. Perhaps it is worth looking at what prominent libertarians are actually saying here? https://news.ycombinator.com/from?site=mises.org https://news.ycombinator.com/from?site=mises.org Intellectual curiosity indeed.
- trizuz 4y ago[dead]
- Slava_Propanei 4y ago[dead]
- TGanski 4y ago[flagged]
- jrcplus 4y agoA comedic take at the same topic: "A Disrupter's POV on the Silicon Valley Bank Collapse" <https://www.youtube.com/watch?v=A13erYPcDVI https://www.youtube.com/watch?v=A13erYPcDVI> by Michael Kosta (The Daily Show).
- smsm42 4y agoSo the logic here is "it's the right thing to do, but it should have been delayed to annoy our political opponents and maybe cause them harm". I feel it is extremely hard to view such approach with any sympathy.