From the left: Banks’ ‘Ponzi-Like Thinking’
Of the banks that have failed so far, “a few common threads” are emerging, “with fraud and Ponzi-like thinking at the heart of them,” Ryan Grim contends at Substack. Silicon Valley Bank, for one, “specialized in making loans to startups that didn’t have any obvious way to pay them back, but had a decent likelihood of getting bought themselves by bigger companies as long as the easy money kept flowing. And SVB required those companies to keep those loans in SVB as deposits,” letting the bank make “even more loans off of the same money, and on and on.” But “how much of this toxic stuff” is “tucked away inside other banks”?
From the right: GOP Must Take Fight to Woke
“Woke ideology is now embedded within the very DNA of the federal bureaucracy,” argue Russell Vought & Christopher F. Rufo at Fox News; Republicans “need to recognize” this “important and uncomfortable reality.” It means “dismantling and radically transforming large parts of the federal bureaucracy” — not simply defunding “one or two programs.” In all, “nearly 100 federal agencies have already submitted agency equity plans that would implement discriminatory policies,” like a since-halted $4 billion 2021 program “designed to provide debt relief exclusively to non-White farmers.” “If Republicans do not grasp the scale of this challenge,” they “ensure the continued march of wokeness across all of society’s key institutions.”
Eye on NY: Another Way To #DefundPolice
“State lawmakers are showing renewed interest in legislation that would rattle municipal finances and crowd out local services such as police and fire protection,” warns the Empire Center’s Ken Girardin. Future retiree healthcare liabilities carried by New York’s public employers total “over a third of a trillion dollars — for which little if any money has been set aside.” And as “both retiree ranks and healthcare costs keep growing, municipalities unable to control benefit costs will have two options: hike taxes or trim spending in other areas.” Teachers years ago “won a guarantee that effectively blocked healthcare changes, causing ballooning costs to translate automatically into higher school property taxes.” Lawmakers worried about “the increasing cost of health care” on retirees “seem strangely unconcerned about where those costs fall.”
Bailout beat: The Fed End-Runs Debt Limit
The Federal Reserve “is now losing billions of dollars a week,” observes Paul H. Kupiec at The Hill, thanks to its “huge investment portfolio that yields around 2 percent but costs about 4.6 percent to finance. Measured using generally accepted accounting principles, the Fed is now approximately bankrupt.” Yet it just “borrowed an additional $143 billion to fund the FDIC’s bailout of Silicon Valley Bank (SVB) and Signature Bank, even though the FDIC is supposed to fund bank bailouts using the deposit insurance fund and, if need be, by borrowing from the U.S. Treasury.” But “the actual cash needs of the SVB and Signature Bank failures would have more than exhausted the FDIC’s deposit insurance fund,” and FDIC borrowing from the Treasury “would count against the federal budget deficit and the congressional debt ceiling.” So: “If Congress does not have a heart-to-heart discussion about this issue with the secretary of the Treasury and Fed Chair [Jerome] Powell, they have all but abdicated their most important power — the power of the purse.”
Libertarian: Federal Worker Tax Deadbeats
“Many of us resent paying taxes,” notes Reason’s J.D. Tuccille, “but who knew that even federal employees resent supporting the government?” Per a Treasury inspector general, 149,000 federal civilian workers owed back taxes in 2021 totaling $1.5 billion. Some 42,000 “didn’t even file tax returns for multiple years.” IRS employees have a better record than the rest of the federal workforce, since the agency isn’t allowed to retain those who don’t pay. Yet it took action against such workers in just 7% of the cases. Meanwhile, the Inflation Reduction Act provides $80 billion in new funds for more IRS agents, who’ll no doubt target “those who don’t have the means to fight back.”
— Compiled by The Post Editorial Board
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