Bail out banks...yet again

[angrychair]

But people that need student loan debt relief are cast as lazy losers trying to get free government money.

Seriously, that's bullshit.

[Atticus]

1. Who "bailed out" a bank? nt

[hippywife]

2. No, they aren't bailing out banks.

The banks that went insolvent this week no longer exist and their executives have been fired.

The government is bailing out the depositors via the FDIC (which banks pay to fund), you know, people like you and me, who had accounts there.

They are not bailing out the bank or its investors.

[angrychair]

3. That's not completely true

Most of it's accounts were large companies like Etsy. Not really the point.

Banks screwed up and now get all their money back. That FDIC money isn't some bottomless pit of free money and it will have to be replenished somehow. Banks will absolutely pass on those extra expenses to consumers in some way. No money is free.

Plus, again, banks screwed up and the government helped them without hesitation.

But when it comes to things like student loan debt relief? Screw those people. Let them suffer.

That is bullshit

[hippywife]

4. How is the government helping the bank...

when the bank no longer even exists, was literally taken over by the government in order to be sold and isn't itself getting any funding?

The government is helping depositors, yes, some are even companies that need to meet their payrolls. They are not bailing out the VC capitalist investors or the executives of the bank who were immediately handed their walking papers. Nothing for them at all.

[2naSalit]

6. +1

[Johnny2X2X]

8. Thank you

SVB went under, the bank and its investors are out their investments, only the depositors are getting help.

[Atticus]

5. I've been wrong more than a few times . You are now. Hippywife is correct. nt

[Ocelot II]

12. The bank won't get its money back because it no longer exists,

and the investors whose fault the failure was will not be reimbursed. What do you think would happen if the depositors were hung out to dry as you think should have happened? Those big companies wouldn't be able to make payroll, is one of the things that would happen - the little people would be hurt, not the big ones. Even if some of the depositors were big companies, how does it help the economy and faith in the banking system if people start to believe their bank deposits aren't safe?

[Ocelot II]

13. If Etsy can't make its payroll because the bank where it held its funds

was liquidated, what happens to its employees? Won't they suffer because they didn't get a paycheck, and might not for weeks, if ever?

[liberal_mama]

7. It makes me wonder if there are more than those 2 banks in trouble

Whenever a politician says, "Don't worry, everything is great," I think things probably aren't great or they wouldn't have to proclaim they are.

I'm kind of worried.

My son-in-law is a banker. He's currently in Florida for a banking conference. My daughter went with and they are doing vacation stuff too, so I haven't wanted to start up a depressing conversation about this.

[hippywife]

9. What the government has done...

is to reinforce confidence in the system in order to prevent further runs like this. Hopefully, enough people will realize that, and that it's not bailing out the banks, and take that to heart. If we make sure to spread the info I posted above, it's less likely we'll see more banks fail, except for their own mistakes or malfeasance.

[hippywife]

10. A video message from Dem Rep Jeff Jackson of NC.

Link to tweet

[Ocelot II]

11. There was no bailout. The bank was liquidated,

the executives were fired, and the shareholders will not be compensated. The depositors (mostly ordinary folks like you and me, and small businesses) will be covered by the FDIC's special fund, which does not come from tax money but from fees charged to other banks. Facts are useful.