The strange absence of pitchforks

Yesterday I found myself musing on our small banking crisis this past spring, which may very well pop back up if non-quiescent inflation and economic activity forces the Fed to raise rates again and thereby push the value of long-term bonds further down. The Fed had to do a surprising and unappreciated amount this spring. I had a gander at the Fed's balance sheet a couple of weeks ago and though it has continued to let its bond portfolio run off and has shrunk its holdings there, it has grown back in other places, presumably in facilities it used to stabilize wobbly banks. But it is down by about $800 billion, which is nice.

Back in 2009, Rick Santelli went on a rage on CNBC and launched the Tea Party movement, famously turning to the traders at the Chicago Board of Trade and asking them if they wanted to bail out people who borrowed too much and was met with a chorus of nos. At some point in time it was estimated that 10% of the US population belonged to a Tea Party affiliate of one sort or another, and you know a bunch of them are Trumpers.

So why didn't people get worked up about the FDIC stepping in and making all of the account holders at Silicon Valley, Silvergate and Signature Banks? For example, Roku, which had about half a billion dollars at SVB, a quarter of its cash and ~5% of its market cap. Where was the outrage?

There are a number of things at work. CNBC's viewership is probably smaller as the media landscape has been more fragmented by the flowering of social media. The crisis was smaller and didn't grip the whole world in the same way as 2008-2009 had. When Credit Suisse, a bit of a basket case for a decade and change, was forcibly merged with UBS, there was a great chorus of yawns.

But also, let's be honest, we're talking about rich white people fucking up here, and the Gods of the tech world here. VCs and tech execs. That's who got bailed out this time and that seems like a good use of tax dollars, I reckon. Nevermind that the money will either have to come out of the Federal kitty or out of a higher fee from banks to the FDIC. In other words, taxpayers. When poor people and black people fuck up, it's an outrage, but this wasn't that.