I’ve been digging into what went on with SVB and also the related issues and trying to see what the ramifications are of all this. First of all, 85 to 90 percent of the deposits were above $250,000. In fact, there were 65,000 accounts. The average balance was $3 million. So when Biden says I’m bailing out small businesses, he’s being dishonest again.
He was bailing out Silicon Valley. He was bailing the VC’s out there, and he was bailing out some very big companies . . .The risk management position [at SVP was left open for a year] … how could the Fed have let that position go empty?
It’s not how, it’s, why. And that’s because Silicon Valley Bank was incredibly well connected politically, and we know that because Silicon Valley Bank’s depositors who are billionaires are not gonna take a penny loss. And Biden’s lying about it. And the same thing’s true with Signature Bank.
These are two very woke banks, two very well-connected banks politically; the depositors are not gonna take a penny loss. The directors of those banks ought to be sued and they ought to lose a lot of money. The executives ought to be sued and lose a lot of money. Barney Frank ought to go broke because he was the director of Signature Bank, and he’s the one that wrote the Dodd-Frank bill, he wasn’t doing his job.
And he got paid a lot of money as a director of Signature Bank. Now let’s look at where the other cracks are. You can Google hotels that are going into default, and you’ll see lots of hotels now and that will continue over the next 24 to 36 months.
You’ll see office building rates going into default. You can Google that, and you’ll see lots of that. And then when you look at the question of all of these government bonds that were out there at one percent, one and a half percent, and we said that Silicon Valley banks should have sold those bonds. Who would they have sold them to?
Who would be left hanging, holding the bag? See, that’s the great question. There are bonds out there, trillions of dollars of bonds out there right now that are still carrying those low-interest rates. Who exactly is holding those? Now, what the Fed has done and the FDIC has done is they said, oh, we’re going to change the rules. And now, if you’re holding a billion dollars of bonds that are a hundred million dollars underwater, guess what? You can borrow against the whole billion.
So they’ve changed the rules literally overnight to say you don’t have to mark your bonds to market. I don’t know exactly what that means. There are mortgages out there. A lot of mortgages out there that are three and a quarter percent. Those mortgages aren’t worth the value that they were when the mortgages were put on. I’m not talking about the value of the house, I’m talking about the value of the security because now mortgages are six and a half percent.
And so, who is holding those? And so what I’m saying is, we’re only beginning to see the tip of the iceberg. If the Biden administration continues through the Fed to raise interest rates, they will only dig the hole deeper. But if they don’t raise interest rates, then inflation will go up.
The problem is there is one solution that is needed right now, and that is a dramatic cut in federal spending. That’s the one that Biden refuses. He says he won a penny. So we’re in a very interesting and perhaps difficult situation.
Listen to today’s show highlights, including this Crommentary:
Live from Music Row Thursday morning onThe Tennessee Star Report with Michael Patrick Leahy– broadcast on Nashville’s Talk Radio 98.3 and 1510 WLAC weekdays from 5:00 a.m. to 8:00 a.m. – host Leahy welcomed David Williams, head of Taxpayer Protection Alliance to discuss out-of-control inflation and who is responsible for it.
Leahy: We are joined now by David Williams, who is the head of the Taxpayer Protection Alliance. And we’re going to talk about inflation – out of control, who’s responsible. David, welcome to The Tennessee Star Report. I’m in-studio along with our all-star panelist, Roger Simon. Good morning, David.
Williams: Good morning. Thanks for having me.
Simon: I’m glad to know you’re protecting us.
Williams: Well, I’m trying to. I mean, it’s tough with the government spending all this money. I mean, $10 trillion over the last two and a half years. So it’s a tough job, trust me. (Chuckles)
Simon: I’ll bet.
Leahy: Yesterday we see March’s Consumer Price Index rate of 8.5 percent, a 40-year high. It’s not been since the days of Jimmy Carter that we’ve seen that kind of disaster.
Then we saw the producers price index going up 11 percent, which is basically a foreteller of what’s going to happen to the consumer side. David, who is responsible for this mess?
Williams: Republicans and Democrats. There’s been so much government spending and taxpayer spending over the last two years, and that’s why we have inflation. We were told in November when it was 7.5 percent, that it was temporary, that don’t worry, inflation is temporary.
But we’re seeing now eight and a half percent and it’s not temporary. It’s going to be around. And I’m concerned that we’re going to see a recession because the Federal Reserve is now going to try to help, and I’m using air quotes, “help” by raising interest rates.
And we’ve seen in the past when that happens, we go into a recession. This is something that people know instinctively, right? You don’t need the Federal Reserve.
You don’t need me to tell you how bad things are. You go to the grocery store, you go to the gas pump. You know, things are bad and they’ve been bad for a while.
Leahy: I thought according to the Biden maladministration, the grifter in chief, the legal but not legitimate president of the United States, he says it’s all Putin’s fault. What’s your thought?
Williams: Ridiculous. And it makes no sense at all, because this was happening before Putin went into Ukraine. It’s a convenient excuse. And what happened at the beginning of the Biden administration was very telling when he shut down the Keystone XL pipeline.
Simon: I was just going to ask you about that.
Williams: (Chuckles) We would have been closer to energy independence if he wouldn’t have shut that down. He only has himself to blame. And it’s so funny that they say, well, every option is on the table to address gas prices.
No, they’re not. Because if every option was on the table we’d be drilling more. That’s what we’d be doing. But their option is expanding electric vehicles and putting electric vehicle charging stations in poor communities.
Think about that for a second. Half of the money for electric vehicle charging stations is going to poor communities. These vehicles cost $58,000. I don’t know how many people in these disadvantaged communities are going to be buying electric vehicles.
Simon: Did you ever see the pictures of all the dead electric vehicles in France? They’re amazing. They go for miles. There’s these graveyards of electric vehicles because the minute their batteries go, nobody can afford to buy them. There are photographs of this online. The whole climate-change thing is one of the big lies of all time.
Williams: It is. And it’s about virtue signaling. It’s not about climate change.
Simon: Exactly.
Williams: Virtue signaling. And I have not seen these pictures, and I would love to see that. Maybe I shouldn’t, because it’s horrifying to me. But the batteries are made from toxic materials.
The damage that is being done to the earth to get these chemicals and these products to build these cars is incredible. And of course, we’ve heard about wind turbines killing birds and solar farms killing birds. So I don’t know if they’re really environmentalists anymore after all of this.
Simon: No, they’re anti-environmentalists. And they’re also slave labor exploiters in the Congo for the materials for the batteries.
Leahy: You’ve done a very good job of analyzing what the problem is. Now comes the real tough part. We’ve got the maladministration of Joe Biden in power. We’ve got a Democrat Congress, House of Representatives, and a Democrat-controlled U.S. Senate. How do we get out of this inflation mess?
Williams: First of all, stop spending. That’s the first thing. And we need to cut spending, and not one of these fake cuts. Because in D.C., when they say, well, we’re only going to increase spending by four percent this year, not eight percent, that’s a spending cut.
No! That is not a spending cut. If I went to my doctor and I said, hey, doc, I’m only going to gain 50 pounds this year, not 100, did I just lose 50 pounds? Absolutely not! But that’s the logic in D.C.
Leahy: But the Democrats still control the House. They still control the Senate, and Joe Biden still can sign law legislation into law. They are not going to cut spending between now and January 2023.
What’s going to happen? And they’re going to try to spend more and more and more. When there’s a problem, they still want to spend more. They’re doubling down on it.
Simon: COVID will come back again and again and again to make us spend more, supposedly.
Leahy: Am I being overly pessimistic here, David?
Williams: No, you’re not. You’re being realistic because they’re already talking about another COVID relief bill. November is coming very quickly and we killed the Build Back Better bill.
That was something good that happened because that was going to spend up to $5 trillion over 10 years. That was going to be a massive expansion of government. So we are able to kind of beat that back, and listen, right now we have to play defense and we have to get to November and hopefully change the House and the Senate so in 2023 we can have some Republicans.
And I’m hoping some strong-willed Republicans will come in and make some fundamental differences in this budget and spending, and tax day is only a few days away. And if the inflation wasn’t enough, now it’s a double whammy of tax day on Monday.
Live from Music Row Monday morning on The Tennessee Star Report with Michael Patrick Leahy – broadcast on Nashville’s Talk Radio 98.3 and 1510 WLAC weekdays from 5:00 a.m. to 8:00 a.m. – host Leahy welcomed President of the Independent Women’s Forum Carrie Lukas to the newsmakers line to weigh in on her recent Newsweek piece and concerns over the American Families Act proposed by Joe Biden.
I’ll just read the first line. The media’s hyping President Biden soon to be unveiled, American Families plan as the surefire way to not only solve the problems of stressed-out working moms and dads but also to usher in a permanently booming economy. Carrie, what’s wrong with that picture?
Lukas: Doesn’t it sound just lovely? The problem, of course, is that all of this is imaginary, especially when it comes to the idea that President Biden is not talking about how to pay for any of this, other than taxing the fabled rich. But of course, we all know that the rich become a lower and lower threshold, and then it ends up being the income creators and job creators.
So that backfires on just about everybody. But parents should be warned about if this is really what they want for their kids, kind of being forced into this government program. That’s really is what it is. It’s a very big government view of how our family should run.
Leahy: What’s interesting about this is that I was talking with Steve Glover here in the studio during the break about the utter failure of American institutions and the institution of the federal government it looks like under Joe Biden is just spending and spending and spending. I’m tempted to say, like drunken sailors, but that would be an insult to drunken sailors. So this child care spending one trillion dollars. But for what?
Lukas: Yeah, it’s funny. I feel like one of the things I found most telling and that people should pay attention to when they hear this talk about especially about the child care and the preschool program that it’s free preschool now is one of the things that’s going to be promised. And it’s funny because the Biden administration and their paperwork promoting this, they point to a really obscure study saying gosh, you see, this is so great when we invest one trillion dollars in preschool and seven dollars in return, because kids are so much better off, et cetera.
But the funny thing is that they pointed to this kind of a really small study of 80 kids, and it was from the 1970s or something really long time ago, not at all applicable to a program that’s supposed to provide a preschool for every American child. And what they avoid talking about is the existing pretty big federal program that is specifically about providing a preschool to thousands of three and four-year-olds today. And that’s Head Start.
And guess why they don’t want to talk about Head Start? Because there have been studies of Head Start’s efficacy to see what are the results. Does it help people or kids who participate in Head Start better off later in life? And that’s because they can find exactly zero evidence that anybody has any lasting benefits from Head Start participation. So this is a lot of money, and it’s a lot of money that will have very little impact.
Leahy: Steve Glover in studio here, who was formerly a member of the Board of Education here in Metro Nashville. Carrie is saying something interesting. You’re shaking your head up and down.
Glover: Oh, yeah. Headstart has no impact. Now I’m going to get in trouble for saying that but Carrie’s exactly right. When I was on the Board of Education, we talked about this, and I don’t want to interrupt her time, but we’ll talk about this as we go forward, but everything she’s saying is spot on. Everything. I agree. That’s why I’m shaking my head.
Leahy: Yes. Carrie is absolutely right. Is this just basically another handout to teachers’ unions?
Lukas: You know, it’s interesting. Yeah, I think it is. And it’s funny that it comes out and it comes after the tremendous you think about the institutions that failed us during COVID. Well, I’m a mom of five here. I got five kids in a public school in Virginia, and my kids just started going back to in-person school about a month ago. I’m lucky that I could work from home.
I have the wherewithal to help my kids through it. But, man, these public schools have let down kids, especially kids without much parental support just unbelievably. So what is the government doing now? They say, let’s double down on this model and have it expanded so that we have three and four-year-olds being failed by the same horrible government school approach.
And let’s extend it on the other end and have community colleges basically be defacto in a free to the taxpayer responsible to no one. It’s really terrible. And I think the problem always is that Democrats are in a constant bidding war. There’s no amount of money that they will ever offer that they say is enough.
The Republicans can never outbid them. But I think parents should think about it for a second and say, do I really want the government to say that I can essentially have free or heavily subsidized child care starting at the first moment of my kids’ birth?
Is that really what I want? Do I really want the government telling me, because obviously, this is going to come with a lot of strings. It’s going to be a government-approved facility that is heavily regulated and comports with all of these government requirements. That means that you can no longer, if you’re out there and you can take time off from work all of a sudden to care for your own kids, it’s going to become foolish.
Why aren’t you going back to work right away? They don’t need mom and dad, you can just stick them in a daycare center for free. Why wouldn’t you do that? Why would a grandmother who’s currently helping out that’s stupid. You should go ahead and just use the government-run schools. It’s a really weird moment in America where we’re saying that the government’s going to pay people to get out of the house and take over child care for you. I don’t think that’s what a lot of Americans want.
Sure, they want more support. I think there’s a lot of recognition that working parents need help. They should be able to keep more of the money they earn so that they can make choices that make sense for them. And that may mean child care for people. I wish we would focus on increasing the supply of child care and different kinds of child care. Things like home-based care so that people had more options and better flexibility. But I don’t want to put the government in charge. And I bet a lot of mom and dads are going to agree with that.
Leahy: You said something interesting. You have five children and they are currently enrolled in Virginia public schools. When you look at what’s going on right now, do you begin to have second thoughts about keeping them in public schools?
Lukas: Yeah, I sure do. And in some ways, we could probably swing pulling a kid or two from public schools and moving them to private school. But I sure wish I was given a voucher. I wish I had access to the public school money and the taxes that we’re paying to support our public schools and could take it back and make a different choice for my kids.
Or at least had schools that were that cared about me as a parent and were responsive to us. And I really think that this is a moment where people have asked absolutely seen the problem with the government assigned public schools, because the schools here in Virginia, have not seemed to care at all. They’ve been hemorrhaging students.
A lot of families who have the capability have pulled their kids from public schools. There’s a lot of families who really can’t afford it financially, and they’re stuck with it. They’re not responsive to places like us. I sure wish they would. I feel like school choice is an issue that’s time has come. And we should all be demanding money that should follow the child. The private schools here in Virginia all opened in September and are providing five days a week full service.
Leahy: So they’ve been doing the job. Steve Glover, Metro Council Member-at-Large here in Nashville, has a question for you.
Glover: Very quickly. Alexandria, Virginia, I think used to be, I don’t know if they still are, but it used to be the top public school system in the country. Just out of curiosity, are you even close to that one? Is that part of the one you’re talking of, or where do you think it is now?
Lukas: I’m in Fairfax County right next to Alexandria. But the thing that is very telling is that Alexandria has even done a worse job than Fairfax County. We’re at least now providing in-person service. I believe that Alexandria still has zero. And throughout the entire year, they are not opening their doors to kids in person.
Glover: Democratically run state.
Lukas: It’s been really unbelievable. So they’ve been a Democratically run state situation I have lived here.
Leahy: Kind of crazy. So, Carrie Lukas, a great, great article that you wrote for Newsweek, and we look forward to having you on again. What’s next on your agenda? We have another minute in the interview here.
Lukas: The other one to really look out for is this idea of government paid leave because that’s one that sure sounds nice. It sounds like, who doesn’t want a lot of paid time off from work. But that is going to come with a lot of strings, a lot of costs, particularly women who are going to be losing some flexible work opportunities. That’s one of the things I’m going to be really focused on.
Listen to the second hour here:
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Tune in weekdays from 5:00 – 8:00 a.m. to the Tennessee Star Report with Michael Patrick Leahy on Talk Radio 98.3 FM WLAC 1510. Listen online at iHeart Radio.
