I don't want to rehash what most of you
already know about the collapse of the Silicon Valley Bank
and the bank runs and crises that have been proliferating
above and beyond the surface of events ever since.
I want to stress, however, something you may not have thought about.
We now live in an economic system that cannot protect us.
Not you, not me.
We've had two dramatic lessons.
Even though there are lessons like this every day, we've had two dramatic ones.
Horrible catastrophe of a derailment in East Palestine, Ohio,
and now catastrophic collapse of a bank
in San Jose, California.
It's extraordinary
the system doesn't work.
The banks can't do what they're supposed to do or are driven
by profit to cut safety, to cut
care, to cut their responsibility.
The railroad companies can't do it.
The banks can't seem to do it.
The institutions, governmental commissions and so on that are supposedly
regulating and supervising, they can't save us and protect us either.
Let me go over the
timeline that leads to the banking crisis.
We have a pandemic and an economic crash in 2020.
That was not prepared for.
That was not managed very well.
We really took it on the chin.
That, in turn, was handled in so bad a way
that it was followed by an inflation
when we could barely recover from the pandemic and the crash.
The inflation led to herky jerky governmental policies,
which included raising the interest rate,
which hurt the same poor and middle income people
that had already been hurt by the crash and the pandemic and the inflation.
And now we're told we're going to have a recession.
Well, with rising interest rates, the value of bonds go down.
No one seems to have said to themselves
in the halls of power, banks invest the huge
amount of their deposits in government bonds.
They've been doing that from, let's see, two centuries.
So it's not as though it's a secret.
And if the bonds go down in value, when interest rates go up, which they do
and which they have been doing for 6 to 8 months now,
the logic would say, oh, if something goes wrong,
the banks are going to have a lot less wealth in the value of those.
But no one thought it through.
No one took the appropriate steps.
The banks took bigger and bigger risks.
Probably hid half of what they were doing
from the- it's the same old story.
If you leave private enterprise in place, it will undo.
It will subvert any regulations put in.
After 2008-2009’s catastrophe,
we had some reforms, the Dodd-Frank Act and others.
What did the banks immediately do?
Go to work, lobbying with their money
to reduce those regulations.
President Trump went real far in reducing them.
Just like in the few years before the collapse of 2009,
the repeal of the Glass-Steagall Act, a reform after the Great Depression
of the Thirties, opened us up for the 2008-9 catastrophe.
That this is going on should surprise no one.
That the people of this country tolerate
a system that works like this- that’s the issue.