Santa Clara Police officers exit Silicon Valley Bank in Santa Clara, Calif., March 10, 2023. (AP/Jeff Chiu)
The collapse of Silicon Valley Bank was the second-biggest bank collapse in U.S. history. And it happened in just 48 hours. Now, notoriously anti-woke Silicon Valley power players have asked the government for a taxpayer bailout.
The receivership of Washington Mutual Bank by federal regulators on September 26, 2008, was the largest bank failure in U.S. history.
SVB’s downfall began on March 8, when it seemingly out-of-the-blue informed investors that it needed to raise $2.25 billion to shore up its balance sheet.
Almost immediately, tech and finance power players began calling for the federal government to push another bank to take over the failed SVB to protect uninsured deposits. “Some observers called out the irony of the venture capital community calling for government aid after many VCs spurred their portfolio companies to withdraw money after SVB released a surprise statement about its financial situation,” CNBC reported
The Federal Deposit Insurance Corporation has insured depositors would have access to their accounts. But before that, their investors found themselves in a “tailspin of troubleshooting how they’d make payroll and access operational cash without the ability to tap their funds,” Sherrell Dorsey wrote in The Plug, who noted the number of Black founders who might be affected by the bank’s collapse.
“Our eyes on how SVB’s failure will mean a drop in support for the Black tech ecosystem at large, as the bank helped to fund several initiatives including the State of Black Venture report spearheaded by BLKVC; numerous accelerator programs and competitions; Black founder brunches at Basel; and much much more. The presence of SVB in the support of Black innovation will be sorely missed,” Dorsey noted.
Meanwhile, Y Combinator’s Garry Tan was one of those who called for government involvement and noted the broader ramifications. Y Combinator is a technology startup accelerator.
“Regulators need to step in to do a *backstop* of depositors (not a bailout of a bank),” he tweeted, adding, “40,000 SVB depositor small businesses 30% will fail to make payroll in the next 30 days Estimate 10 employees each 120,000 jobs on the line Years of US innovation on the line.”
SVB operated 13 branches in California and Massachusetts and had about $209 billion in total assets and about $175.4 billion in deposits as of the end of 2022, MarketWatch reported.
“The financial world does not have the capability to save these companies, like, we will just wholesale throw out startup innovation in America if we allow these companies to die in the next … weeks … and it really is a matter of next week,” Tan also tweeted, as per MarketWatch.
He continued, “What the FDIC really does need to do is take into account these people, these are the small guys who, if we damage them, it hurts us all,” Tan said. “This is a national-security issue. … This will splash across all of the economy.”
The irony, some also noted, was that the anti-woke Silicon Valley bigwigs are seeking government help. According to a submission to Urban Dictionary, “anti-woke” means, “Socially retarded, willfully ignorant to other peoples situations. Zero f***s given to how your behavior effects others. Politically regressive leaning away from egalitarian policies and society.”
Silicon Valley, it seems, is filled with the anti-woke.
Take tech investor David Sacks. He is general partner of Craft Ventures, a venture capital fund he co-founded in late 2017. Sacks was the founding COO and product leader of PayPal. Sacks once wrote that date rape was “belated regret.” And during a rash of anti-Asian violence in 2021, he called for more Three Strikes Law prosecutions.
A 2016 book called “The Diversity Myth: Multiculturalism and Political Intolerance on Campus,” co-written with billionaire tech entrepreneur Peter Thiel, the pair criticized multiculturalism at Stanford University, where both attended, and brushed off rape.
“But since a multicultural rape charge may indicate nothing more than belated regret, a woman might ‘realize’ that she had been ‘raped’ the next day or even many days later…Why is all blame placed on the man?” Sacks and Thiel wrote. Years later, Sacks said he regretted those statements.
Despite being part of the anti-woke movement, there are those tech heavyweights who take advantage of government tax breaks and often seek assistance from government insiders to expand their personnel wealth.
“Silicon Valley’s 1-percenters have long flocked to tax loopholes to try and keep the IRS out of their lives,” Theodore Schleifer reported for Vox in 2018 “When you’re as rich as Mark Zuckerberg or Jeff Bezos, you have legions of highly paid lawyers and advisers who specialize in taking advantage of every subsection of the tax code to keep your billions your billions.”
Fast forward to March 2023, and it was found that SVB used two former senior aides to House Speaker Kevin McCarthy to weaken regulations and to lobby the FDIC, The Intercept reported. Before its collapse, the president of SVB, Greg Becker, pushed for weaker banking regulations, and urged Congress to lift “enhanced prudential standards … given the low-risk profile of our activities,” as The Lever reported.
