(Jacob Bruns, Headline USA) As the banking industry is buffeted by choppy waters, critics have suggested that President Joe Biden’s proposed bank bailouts may eventually lead to a state-controlled banking industry, the Washington Times reported.
Despite the fact that millions of dollars held at the now-collapsed Silicon Valley Bank were not insured by under the Federal Deposit Insurance Corp., Biden and his administration have enacted an unprecedented bailout, making available more than $200 billion in additional state funds for uninsured customers.
The FDIC covers deposits of up to $250,000 per account, but Biden approved a temporary raising of the limit to cover some of the massive accounts held by Silicon Valley elites.
Once more, Biden and the Left are bailing out American oligarchs.
Steve H. Hanke, a professor of applied economics at Johns Hopkins University and former member of President Ronald Reagan’s Council of Economic Advisers, noted that the step marks one more move towards a state-operated banking system.
“With the Biden bank bailout, and it is a bailout, banking is becoming a government-backed business — if that’s what you call a business,” he said.
“And if that’s not bad enough, the Biden administration has just injected another massive infusion of moral hazard into the banking system, as have past Republican and Democratic administrators. Who picks up the moral hazard tab? Taxpayers do.”
Morris Pearl, a former managing director at BlackRock, downplayed the bailout, suggesting that it is not such a big deal.
“Banks have been highly regulated in many ways like public utilities for years. A basic checking account is more or less a necessity of modern life. It is in the same category as electricity or telephone service,” he said.
In a recent message, a desperate Biden tried to reassure concerned Americans, advising them to trust the banking experts.
“Americans can have confidence that the banking system is safe. Your deposits will be there when you need them. Small businesses across the country that deposited accounts in these banks can breathe easier knowing that they will be able to pay their workers and pay their bills,” he said.