The Federal Deposit Insurance Corporation (FDIC) this week announced the winner of its auction for the loans and deposits of the failed Silicon Valley Bank: First Citizens BancShares (Nasdaq:FCNCA), a North Carolina outfit with no obvious synergy with SVB’s customer base or tech know-how. Given First Citizens’ capital base of only $14.1 billion ($9.7 billion of which is stockholders’ equity) compared to the $72 billion of SVB loans it took on, there must be some chance of a cascade of bank failures. For those who think this unduly pessimistic, I have a tale to tell you – from 1973. Continue reading
The Bear’s Lair: British Tories revert to bad habits
Since the time of Sir Robert Peel (Prime Minister 1834-35, 1841-46) the British Conservative party has been notorious for its inability to conserve anything worthwhile, let alone to restore anything that its opponents had dismantled. For a few years in the 1980s, it appeared that Margaret Thatcher, while imperfect on several issues, had reversed this tendency, and was making Britain a country in which a free market conservative might reasonably want to live. Alas, her ouster in 1990 led to a rapid reversal of many of her policies, and the recent Conservative governments since 2010 have followed the traditions of the Quisling 1945-75 period rather than those of Thatcher herself. Continue reading
The Bear’s Lair: The Strange Death of Silicon Valley Bank
Proper bankers drove these – the Packard De Luxe Eight Model 904Source: Lars-Göran Lindgren Sweden
Silicon Valley Bank (SVB) was at first sight a splendid 21st century replica of the 18th century Country Banks that fueled the Industrial Revolution – it was local to Silicon Valley, supremely attuned to the major industry in its locality, and easy for that industry to deal with. So why did it fail? The answer is complex and leads us to a number of reforms that are needed to today’s banking scene. Continue reading
The Bear’s Lair: Corporatism is not Capitalism
The Federal Trade Commission under its fearless leftist chair Lina Khan is proposing to ban non-compete agreements, which prevent employees from working for a competitor for an often lengthy period after their departure and are applied to some 30 million U.S. employees. The usual Chamber of Commerce types and “conservative” journalists have squawked, arguing that Ms. Khan is a hardline Marxist (possibly true) and that she is eating away the very foundations of free market capitalism. Well, I have news for them: partly because of the Fed’s “funny money” policies over the last decade, the U.S. economy is now thoroughly corporatist, not capitalist, and moves like this proposal that free workers from wage serfdom are highly beneficial. Continue reading
The Bear’s Lair: I hate Ike
The reputations of past Presidents are continually being re-evaluated. Woodrow Wilson, a demi-god at the time of the 1944 film “Wilson,” has now been sharply downgraded by both left (for his racism) and right (for his rigid Progressivism and his share in the disastrous Versailles Treaty). Conversely, Harry Truman and Calvin Coolidge have been rehabilitated by history. Another such rehabilitation is being attempted on Dwight Eisenhower, not highly regarded at the time of his departure; I will argue that the rehabilitators are wrong, and that for several reasons he was a thoroughly unsatisfactory President. Continue reading
The Bear’s Lair: A Free Society Looks Unattainable on Earth
The admirable Rep. Marjorie Taylor Greene (R.-Ga.), my favorite Congressperson, this week called for a “national divorce” by which “blue states” and “red states” would separate, thereby allowing the “red states” to form a smaller union of the like-minded: Christian, capitalist and economically vibrant. It’s a lovely idea, but the new Red America, increasingly wealthy yet ideologically alone in the world, would be immediately subject to attack, possibly by direct military action, certainly by massive subversion. Freedom cannot now be established in a universally hostile world; it requires a new home of its own, attainable only through space exploration. Continue reading
The Bear’s Lair: Fund Entitlements by Taxing Charities
President Joe Biden, in his State of the Union address last week, scored a moral victory over the Republicans by accusing them of wanting to cut the Social Security and Medicare entitlement programs, thereby forcing them to deny any such intention. However, the actuarial reality is clear: Medicare will become insolvent around 2027 and Social Security around 2035. New funding will have to be found; I have one suggestion: to abolish the tax deductions and exemptions enjoyed by charities. Continue reading
The Bear’s Lair: McKinley 2024!
In 2016, this column recommended that Americans choose Robert Banks Jenkinson, 2nd Earl of Liverpool as their President (having been born in 1770, before U.S. independence, he was clearly eligible). Alas, the American people made the mistake of ignoring this recommendation, both in that year and in 2020. This time around, this column has an alternative recommendation: that Americans should choose that quintessential Republican, William McKinley, whose economic and foreign policies would be an enormous improvement on anything we have seen in recent years. Continue reading
The Bear’s Lair: Will we see a Latin American Comecon?
What Paraguay Will Need.
News came last week that Brazil and Argentina were discussing forming a common currency. Since Argentina’s inflation in 2022 was 95% while Brazil’s was only around 6%, this is unlikely to work well. However, so many Latin American countries are now run by market-hating leftists that a full-scale attempt at economic integration, to remove the influence of the hated U.S. dollar, must be a possibility. The desired model, of stable prices and wages and controlled trade, would strongly resemble the Soviet Union’s Comecon. Compared to the current messy single-country socialism, it would have some advantages. Continue reading
The Bear’s Lair: The Free Trade Scam
The Davos leaders last week bemoaned increasing protectionism, attacking opponents of globalization as economic illiterates. Yet there seems no reason a priori why trade should be less subject to tax than any other human activity, and with today’s gigantic governments the need for revenue is very real. Free trade benefits some countries much more than others; today, even without extravagant cheating, it is an unnecessary handout to China’s thoroughly unpleasant regime. A balanced polity, global as well as national, is at least somewhat protectionist. Continue reading