A bill that President Trump signed into law in 2018 got rid of parts of Dodd-Frank.
When the second biggest bank failure in U.S. history happened, liberals were quick to blame former President Donald Trump on social media.
Robert Reich, who was labor secretary under President Bill Clinton, tweeted about it on Friday after hearing that the FDIC had shut down Silicon Valley Bank to protect its customers from the bank’s liquidity crisis caused by a $2 billion loss.
On Twitter, liberals like Reich have tried to blame Trump for signing a bill in 2018 that will partially undo the effects of Dodd-Frank.
Journalist Ed Krassenstein tweeted, “It seems likely that this could have been avoided if the Trump administration hadn’t rolled back laws.”
David Sirota of Twitter pointed out that 50 Republican senators and 17 Democratic senators voted to weaken risk rules for Silicon Valley Bank, even though they were warned many times not to. After Trump signed the bill into law, it was officially a law. It is the second-biggest bank failure in the history of the United States.
Jeff Tiedrich, a blogger, tweeted that a toxic train derailed after “Donald Trump cut rail safety rules.” “After Trump loosened rules on banks, a large financial institution failed. It would be great to find a way to bring everything together.”
In 2018, attorney Ron Filipkowski tweeted, “Good time to re-up this from 2018,” with a link to an article about the bill.
A research fellow in regional economics at The Heritage Foundation’s Center for Data Analysis, EJ Antoni, told FOX Business on Saturday that the “unusual confluence of events” has nothing to do with Trump or Dodd-Frank.
Antoni said that the bank did almost all of its business with tech companies, which “usually rely on continually rolling over large debts.” This means that these companies don’t pay off their debts; instead, they take out new loans to pay off the old ones.
Second, SVB put a lot of money into bonds that would not be paid off for a very long time. Antoni pointed out that this is a bad plan when interest rates are zero because rates will go up in the long run. Most of the time, bond prices go down when interest rates go up. This is because if an investor can choose between buying an existing bond with a low-interest rate or a new bond with a high-interest rate, the investor will choose the new bond. After all, it has a higher rate of return. If you want to sell the old bond, you’ll have to lower the interest rate or find another buyer.
Antoni talked about the “death spiral” that SVB got into because it didn’t have enough different kinds of customers. This meant that the bank had to sell bonds that had lost value to meet the needs of depositors.
Antoni defended SVB’s choice to raise money by selling bonds at a loss. “Small-scale transactions like these are common in the financial sector, and they wouldn’t have caused a disaster,” says the author.
FOX Business asked Antoni what went wrong at SVB, and he said that it was because the Federal Reserve set interest rates too low.
On Twitter, many people defended Trump against his critics. Journalist Glenn Greenwald pointed out that Vice President Biden has been in office for two years.
Greenwald says it’s been more than two years since Biden became vice president. The parts of the government that are supposed to enforce the law are run by their friends. Not too long ago, Democrats were in charge of both houses of Congress.
How much did things outside of the Silicon Valley Bank cause it to fail recently? Trump’s (and Putin’s) explanation is the most direct.
Fox Business says that Donald Trump’s spokesman, Steven Cheung, denied that the president was to blame for the fall of the financial system.
Cheung said that “out-of-control Democrats” and “the Biden administration” have “continued pathetically” to tell “desperate lies” to try to blame President Trump for their failures. He used the CCP spy balloons, the derailed train in East Palestine, and the collapse of SVB as examples.
It’s sad to try to fool people in this way by avoiding responsibility. The bad economy that Biden has been in charge of is a direct result of his actions against the United States.