Opinion: If you’re giving away bailouts, I’ll take one, please
Dear Sirs (one assumes),
What follows is my official application to be included in the billions of dollars in bailouts — I’m sorry, “debt relief” — planned for the Silicon Valley banks that failed after engaging in risky tech industry loans, dumb cryptocurrency investments and faulty assumptions about interest rate hikes.
I have read recent reports that the federal government has already organized infusions of hundreds of billions of dollars into the banks to ensure their liquidity — in other words, to make certain that venture capitalists continue their unbroken streak of never facing the consequences of a bad investment.
Now, I am not a customer of these banks.
I am not the CEO of an eco-friendly swimsuit company or a totally legitimate service that delivers vegetables to your house and charges it to health insurance as medicine.
I do not own an “estate winery” that makes $200-a-bottle wine.
Nor do I run a company that speeds the movement of cryptocurrency, ensuring that shady transactions between anonymous accounts happen seamlessly, and that arms dealers, pornographers and heroin manufacturers can easily turn their unsecured digital Monopoly money into worthless cash.
I am just a loser mom, the CEO of My Home Inc., and though I haven’t been suffering as badly as the hedge funders who no longer can use their banks’ Lake Tahoe ski retreats for free, I am also not doing as well, financially speaking, as I was pre-pandemic.
The consumer price index, or, in more technical terms, “what I pay for stuff” has increased between 2% and 10% over the last three years, and inflation is up 6% over a year ago. Now, I’m no treasury secretary, but that sounds bad.
Food manufacturers seem to think that customers won’t notice if, instead of increasing the price, they just shrink the package to toddler portions. But then grocers figure, heck, why not just jack up the cost, too? Now, a box of cereal usually runs you $8 — about the same as an 8-pack of applesauce. Drown your sorrows in M&Ms and expect to pay as much as $13 a bag — on sale — for the privilege. Eggs? Well, the point has been made.
So, let me make a modest proposal: I will accept an infusion of liquidity to the tune of $100,000 — half the cost of one of the 300 wine events that a bank held in a year to persuade people to come borrow its money.
Now, you may balk at my proposal, thinking it’s more important to allow bankers to continue to take their tech bro clients to race fancy sports cars.
Or maybe you think that, instead of helping me, the federal government should focus, despite the FDIC’s “legal limit” of $250,000, on protecting the deposits of companies that kept $487 million, or a quarter of all their cash, undiversified, in one bank.
In response, I argue that it’s a lot like corporate welfare to throw billions at banks that looked with benevolence upon their wealthy customers’ harebrained startups, giving them chance after chance to make good, then cushioning their falls when the failure had been made clear.
I would suggest that preventing me, a regular person, from suffering a fiscal reckoning would be far less of a priority for the federal government and financial sector, the effect on me and my family be damned.
I might even go so far as to guess that if an average Joe Schmo went to his bank and said, “I’ve made some poor investments and can’t pay my mortgage anymore,” he would be treated with a coldness that would put an unheated California mountain ski lodge to shame.
In short, I’m sure there are some complex financial inner workings that I, a regular person who has never been flown to a human-made surf ranch at my banker’s expense, do not understand.
But, frankly, I won’t do anything dumber with the money than these banks did.
Think of it, if you like, as an investment.
— Georgia Garvey is a columnist with Creators Syndicate.