The collapse of Silicon Valley Bank (SVB) is a disaster. How big a disaster is not clear. But for America’s social-justice elites, the size is directly related to its effect, not on our overall economy but on their political allies.
At the very least, the stockholders are out close to 100 percent of their investments. Depositors with accounts that exceed the $250,000 FDIC-insured limits are getting a government “backstop.” But there’s no guarantee that will stop the potential contagion effect where similarly situated banks are destabilized by depositors moving their assets to safer institutions.
We don’t know the fallout. But we know for sure that a lot of people are being hurt, and many will never recover.
There are lots of things to be said about the whole affair and innumerable bad guys to point fingers at. One thing is coming into focus already that may or may not be relevant to the collapse but at the very least is striking: SVB was very woke.
It was heavily into Environmental, Social and Governance, was connected to the World Economic Forum, and one of its financial risk management leaders is a self-declared queer activist. On the SVB website, Jay Ersapah writes, “As a queer person of color and a first-generation immigrant from a working-class background, there were not many role models for me to ‘see’ growing up.”
The obvious question: Why didn’t Ersapah “see” the looming financial crisis at SVB?
None of this may be directly related to the circumstances of the collapse, save for the obvious: the ball they kept their eye on wasn’t risk management.
In light of this, hedge funder Christina Qi’s take is striking. Rather than focusing on the victims of the collapse, she lamented the fall of SVG because of the disproportionate effect it would have on progressive causes.
“The SVB collapse has been devastating in more ways than one: They supported women, minorities, & the LGBTQ community more than any other big bank,” Qi tweeted. “This includes not just diverse events, but actual funding. SVB helped us move one step forward; without them, we move two steps back.
“The SVB staff are one of a kind. Many of them come from traditional banks with toxic cultures. SVB allowed them to break the mold & create a healthy, innovative startup ecosystem. My heart goes out to all of the hardworking staff who were affected by this. This isn’t your fault,” Qi added.
That is quite a take, given the potential damage wrought to banks, retirement funds and investors across the country.
Qi is on the boards of Massachusetts Institute of Technology and Forbes. That very Forbes named SVB a top-five bank a few days before the institution collapsed. Clearly, it endorsed SVB as a good corporate citizen not because of how well it served its customers but for other reasons.
Perhaps an atmosphere that was a bit more “toxic” — that is, based on market forces and not progressive politics — would have been a good thing.
There is something particularly 21st century about this attitude. Rather than focusing on the purpose for which a corporation supposedly exist — serving its customers — the people at the apex of our society now judge it based solely on how it furthers a political agenda.
A bit of focus on risk management and avoiding total collapse might have required spending some time away from protesting for drag queens, but it might also have meant that all those businesses scrambling to keep the cash flowing might avoid all the problems, including potential bankruptcy, that they are facing.
No matter how absurd you imagine America’s social elites to be, they are more absurd than you can possibly imagine.
