(JustPatriots.com)- In the days following the collapse of Silicon Valley Bank led to concerns about the overall health of the U.S. banking industry, the Biden administration is now being criticized for the role it played in the incident.
Many critics of the administration believe the White House should own up to the role it played in the collapse of SVB and Signature Bank. They point to the fact that the administration’s policies of high spending led to high inflation, which forced the Federal Reserve Bank to increase interest rates rapidly to cool off the economy, which ultimately led to the bond and treasury assets that SVB and others held to be way undervalued.
Critics also believe the Biden administration has focused way too much on an ESG agenda – or environmental, social and governance policies.
Both SVB and Signature Bank invested heavily in projects driven by social justice as well as companies that promoted green energy and created hiring policies that were based on things such as diversity rather than merit.
Republican Representative Bryan Steil of Wisconsin also said earlier this week that the out-of-control government spending was to blame for the banks’ collapse. Steil, who is a member of the House Financial Services Committee, commented to Just the News:
“We had bad management of banks. We had a handful of other things. All of that needs to be investigated. But if we step back and look and say, ‘What’s causing this underlying instability across our economy?’ it’s roaring inflation, and who’s the culprit of roaring inflation? It was one-party, Democratic control that spent like drunken sailors.
Steil also blamed the “mismatched energy policy” being pushed forward by the White House that’s creating “a war on energy.” Labor policies that have come out of the Biden administration also result in too many people remaining at home rather than being put to work.
Steil says the remedy to the situation is to bring the “reckless spending” that the Biden administration initiated back under control. He also says that the federal government needs to stop going hard after fossil fuels as well as the energy sector in the U.S. as a whole.
As he explained:
“This is the challenge in front of us, is forcing the president to come to the table. In particular, during the period of time of the debt ceiling debate, to actually put the policies in place to slow inflation. Because at the end of the day, that’s the cause of the economic instability. And that’s the cause of the pain of so many families across our country.”
Mike Faulkender of the American First Policy Institute says that inflation caused by out-of-control federal spending are both root causes of the bank failures. As he explained:
“When Biden came into office and carried out the massive amount of spending with the American Rescue Plan, we saw inflation start to take off in March of 2021 … It hit more than 9% inflation last year. And the result of that is that the Fed has had to aggressively raise interest rates.”