Why Things Will Never Go Back to Normal, Thanks to Biden
If you haven’t heard, a major US bank failed last week, threatening to leave its depositors in a lurch. But rather than letting the market do what it will, Democratic President Joe Biden and his administration stepped in, promising to provide protection for larger investors and depositors. Basically, anyone with over $250,000 got their money back.
But while it might be good news for those certain individuals, Kevin O’Leary, a “Shark Tank” judge and chairman of O’Leary Ventures, explained, Biden just forever changed the US economy – and not for the better.
As he told CNN on Monday, what Biden essentially did was “nationalize” the US banking system. for as long as it’s been in existence, banking has always come with risk. The bank might fail, stocks may drop, and you might lose it all. It’s just how it’s always been.
And yet, suddenly, with the decision to protect depositors, Biden just took all of that risk away.
“It’s no longer a risk. It’s no longer private in any sense. It’s now backstopped by the government. Ultimately the taxpayer.”
He explained that what happened with Silicon Valley Bank was tragic for its investors. But it’s not unheard of, and it’s “what should have happened.” A “negligent board of directors and idiot management” created a “very powerful cocktail” that led to their own demise. And yes, there were seemingly innocent casualties.
But it’s those casualties that make the market free and free-flowing. Without them, you don’t have risk; you can’t go wrong, so to speak, and should the banks fail, the government will back you up. But really, as we all know, it’s the taxpayer backing you up – as if they have any more to spare.
Gee, I wonder if tax rates will rise again due to this…
Do you see where this is going?
Besides, as O’Leary also explained, if certain depositors stood to lose so much, perhaps they should have diversified a bit more rather than having huge chunks in just a few banks, undoubtedly increasing their risk.
But now, there’s no risk. Banking is, essentially, “nothing more than highly regulated utilities” from here on out. And the government, since they are backing the system, will have full control…
Are you terrified yet?