The “small-government libertarians” got their big government bailout this past Sunday, and as observers slag the hypocrisy of founders and VCs who oppose safety nets for everyone else, we learn that local mayor whisperer Ron Conway was helping pull strings to get the bailout.
Funny how the tech founder types who think Elon Musk is brilliant for not paying his bills spent this past weekend screaming hysterically that people might not be able to pay their bills if the government didn’t bail out the failed Silicon Valley Bank (SVB). And while many big-deal investors worked up as much Twitter hysteria as they could, others preferred to work behind the scenes. We’re starting to get the first behind-the-scenes accounts of what happened over the frantic 72 hours that ended with the government backing up all of Silicon Valley Bank’s lost money, and the Washington Post’s version notes the involvement of our old friend Ron Conway.
The Post describes his involvement in pulling strings to pressure the Biden White House into approving the bailout: “Ron Conway — another of the [Bay Area’s] leading investors, with original stakes in Airbnb, Facebook and Google — worked with [Nancy] Pelosi and Governor Gavin Newsom to put pressure on the White House, Treasury Department and elected officials.” Yeah, as long as none of that government money went to helping homeless people!
Tech tycoons are libertarians until they need help; then they morph into temporary socialists, say industry analysts. https://t.co/vxjtjtjx07— San Francisco Chronicle (@sfchronicle) March 15, 2023
The Chronicle has its own analysis of the people who’ve spent their careers railing against safety nets, but then begged government officials to get one themselves. There is plenty of low-laying fruit like the sweet dunk below. But the Chron also points out the bank lobbied for the very deregulation that caused its own collapse.
“The CEO of Silicon Valley Bank [Greg Becker] lobbied hard to reduce government regulations of banks with less than $250 billion in assets, testifying before Congress that they shouldn’t have to submit to stress testing by the Federal Reserve, nor have to keep certain levels of cash reserves,” as the Chronicle reminds us. “Unless the government backed off, Greg Becker testified to Congress in 2015, ‘SVB and other mid-sized banks will face significant burdens that inherently and unnecessarily will reduce our ability to provide the banking services our clients need.’”
Of course, the federal government is now providing those banking services, and paying the bank’s staff to do it.
Column: With demands for a bank bailout, Silicon Valley shows its 'small government' mantra was just a pose https://t.co/vTIyvbKrvV— Michael Hiltzik (@hiltzikm) March 13, 2023
Pulitzer-winning LA Times columnist Michael Hiltzik points out another way in which SVB accidentally engineered its own collapse. “SVB evidently required some of its Silicon Valley borrowers to do all their banking through the bank as a condition of their loans,” he notes. In other words, they couldn’t diversify, and had no hedge if SVB failed.
And the British paper The New Statesman points us to the above tweet from SF recall backer and Ron DeSantis money man David Sacks. While Sacks was one of this weekend’s biggest bailout-pushing evangelists, many noted his 2021 tweet that “Special-interest corruption is eating our country alive. Wall Street was too big to fail so it got bail-outs.”
As Hilton’s LA Times column notes, “The government has turned out to be the savior of Silicon Valley's small-government libertarians in this crisis. The FDIC is one of many programs launched during Franklin Roosevelt's New Deal that preserve Americans' livelihoods and way of life during a crisis, and that conservatives have been trying to undermine since the 1930s.”
Now literally 90 years after the founding of the FDIC, Silicon Valley venture capitalists are using it as an insurance policy for their own fuckery and FDICkery.
Image: Joi Ito via Wikimedia Commons