Silicon Valley is again in denial about its dependency on the feds
Contributing columnist
The Washington Post
March 13, 2023 at 4:37 p.m. EDT
If Silicon Valley were a normal place, this past weekend might be remembered as the moment its libertarian instincts gave way to a profound appreciation for the healing power of government. Knowing the mind-set of the place as I do, I doubt that shift is likely. There is simply too much hypocrisy in the Valley’s attitude toward Washington.
That was plain to see in the Valley’s reaction Sunday when the Federal Reserve Bank, the Treasury and the FDIC guaranteed all deposits — insured and uninsured — at the failed Silicon Valley Bank. Regulators said depositors would be made whole, meaning their funds would not be trapped, or trimmed, in an extended unwinding process. This caused a collective exhalation in the Valley, whose companies had everything from payroll to daily cash management to basic processing of customer purchases tied up at SVB.
The feds didn’t have to do this. SVB accounts with balances above $250,000 were uninsured, and regulators might have chosen to freeze them until a sale of the bank was worked out. Tech companies of all sizes spent the weekend scrambling to line up alternative funding to keep their lights on.
Continue here. (I’m told this might not be paywalled.)