Andy Puzder is a former CEO of CKE Restaurants, chairman of 2ndVote Value Investments, Inc., and a visiting fellow at the Heritage Foundation
President Joe Biden announced Monday morning that his administration will conduct a ‘full accounting’ of historic bank failures and hold ‘accountable’ those responsible for an unfolding new financial crisis.
He should first look in the mirror.
While the mainstream press will search vainly for alternative explanations, the collapse of Silicon Valley Bank (SVB) and the ensuing hysteria lies at President Biden’s feet.
As of Monday afternoon, the stock prices of at least 20 regional banks plummeted triggering a trading halt. America’s four largest banks – Wells Fargo, Bank of America, Citigroup, and JP Morgan – took a stock market hit. And hedge fund billionaire Bill Ackman is warning that unless the U.S. government steps in to guarantee the regional bank deposits of all Americans then the entire economy may cease to function.
Despite the president’s reassurances, the fear is real. And make no mistake – he created the conditions for today’s panic.
Remember that in 2021, former Clinton and Obama White House economist Larry Summers warned that Biden’s $1.9 trillion spending spree – ironically named the ‘American Rescue Plan’ – was a severe economic threat. Summers called it the ‘least responsible’ economic policy in 40 years. Former Obama economic advisor Steven Rattner called it ‘the original sin.’
Both men recognized that profligate government spending would trigger runaway inflation that would inevitably require the Federal Reserve to impose sky-high interest rates. But despite those warning, the trillions in government spending just kept coming.
The ‘American Rescue plan’ was followed by an infrastructure and green energy spending bill nonsensically named the ‘Inflation Reduction Act.’ Yet today, inflation remains unacceptably high.
It’s also no surprise that SVB was the first bank to fail in this environment. In fact, it is hard to ignore the irony of it.
By Andy Puzder
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