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Trump’s Rollback of Dodd-Frank Regulations Directly Led to the Silicon Valley Bank Failure

This is what happens when you deregulate checks on financial institutions.

Donald Trump signs a piece of paper at his desk in the Oval Office
SAUL LOEB/AFP/Getty Images

Make no mistake: Just like train derailments, climate disaster, and most crises in society, barefaced deregulation was the antecedent to the collapse of Silicon Valley Bank.

On Friday, the major lender for tech startups was shut down by regulators. The commercial bank, among the 20 largest in the country, was caught in a free-fall bank run. Some of it seemed set off after a letter from SVB’s CEO Greg Becker, describing to shareholders a $1.8 billion loss on the sale of U.S. treasuries and mortgage-backed securities; high interest rates backgrounded the letter. Peter Thiel, a massive backer of the likes of J.D. Vance and Blake Masters, had his venture capital firms direct all their portfolio companies to withdraw their funds from the bank.

And then the floodgates burst open.

When all was said and done, $42 billion was withdrawn from SVB on Thursday. California’s Department of Financial Protection and Innovation seized the bank the following day, finding it insolvent and “incapable of paying its obligations as they come due.”

While Biden now attempts to relieve strain on depositors, while not placing burden on the rest of the public (i.e., not gratuitously bailing out the rich at the expense of everyone else), it’s important to understand how we got to this crisis in the first place.

In May 2018, Donald Trump signed into law a bill rolling back Obama-era Dodd-Frank regulations enacted to take on “too big to fail” financial institutions in the aftermath of the Great Recession. The bill was pushed through the Republican-controlled Congress—with the help of 17 Democrats in the Senate and 33 Democrats in the House.

The rollback raised the asset threshold for banks subject to enhanced scrutiny, like stronger regulations and stress tests, from $50 billion to $250 billion. As The Lever reported, SVB CEO Greg Becker had been lobbying for this change for years. SVB had just passed $50 billion in assets at the time Trump changed the regulations.

By December 2022, SVB had $209 billion in assets—below the $250 threshold but evidently enough to have certainly necessitated some form of oversight and testing to see if it could survive the type of run that just occurred.

What’s telling is how weak the conservative response has been. Venture capitalist libertarian tycoons clumsily beg for bailout funds despite their supposed disdain for government expenditure. Ron DeSantis, who voted to roll back Dodd-Frank in 2018, is now among the Republican chorus blaming the bank collapse on diversity and wokeness. In each increasingly frequent social crisis, the culprit is almost always deregulatory conservatism; not only are more and more people coming to understand Republican politics as socially untenable—it is being revealed as practically unjustifiable too.

“Everything Everywhere All at Once” Director Slams Anti-Drag Bills in Oscars Speech

Daniel Scheinert used his emotional Oscars acceptance speech to defend drag.

Kevin Winter/Getty Images
Daniel Scheinert and Daniel Kwan accept the best director award for “Everything Everywhere All at Once” onstage during the ninety-fifth annual Academy Awards on March 12.

One of the directors of indie breakout film Everything Everywhere All at Once slammed growing Republican attempts to ban drag performances during one of their many acceptance speeches at the Oscars ceremony.

The multiverse-spanning film about martial arts, mental health, and family ties swept the Oscars Sunday night, racking up seven wins that included some historic victories in the best actress and best supporting actor categories.

When accepting the award for best directing, Everything Everywhere All At Once directors Daniel Kwan and Daniel Scheinert (referred to as “the Daniels”) called out the importance of community for creativity.

“We want to dedicate this to the mommies, all the mommies in the world,” Scheinert said. “To our moms, specifically my mom and dad, Ken and Becky. Thank you for not squashing my creativity when I was making really disturbing horror films, or really perverted comedy films, or dressing in drag as a kid, which is a threat to nobody.”

Scheinert’s comment was met with cheers throughout the audience. He was referring to the more than 20 bills attacking public drag performances being considered in state legislatures throughout the United States. Tennessee recently became the first state to pass one of these bills into law.

On a larger scale, Republican-led states are cracking down on LGBTQ rights, from the drag bans to prohibiting gender-affirming care for minors and removing books featuring LGBTQ characters from school libraries.

One of the storylines in Everything Everywhere All at Once is about matriarch Evelyn, played by Michelle Yeoh, coming to terms with her daughter Joy’s (Stephanie Hsu) sexuality.

Kwan also highlighted how important a community is to creating art. “The world is opening up to the fact that genius does not stem from individuals … but rather, genius emerges from the collective,” he said.

“We are all products of our context. We are all descendants of something and someone.”

Texas Man Sues Three Women for $1 Million for Helping His Ex-Wife Get an Abortion

The lawsuit is thought to be the first of its kind since the state’s severe abortion law went into effect last year.

Abortion pills
STORMI GREENER/Star Tribune/Getty Images

A Texas man is seeking more than $1 million in damages by suing three women who helped his ex-wife terminate her pregnancy.

Marcus Silva of Galveston County alleges that, after his then wife learned she was pregnant in July 2022, she conspired with two friends to illegally obtain abortion pills to end the pregnancy, The Texas Tribune reports. Roe v. Wade was overturned in June 2022, triggering Texas’s ban on abortions with narrow exceptions.

Current state law allows any private citizen to sue anyone who “aids or abets” an abortion after about six weeks of pregnancy. Claimants can receive $10,000 in damage for each such case, incentivizing an essential witch hunt by residents to snitch on people who seek abortions. Silva’s lawsuit reportedly is the first filed under the law.

Silva alleges that his then wife had received information about Aid Access, an organization that provides abortion medication by mail in and outside of the United States. The lawsuit cites text messages showing the two women finding access to the medication in Houston, where the women resided.

The lawsuit alleges a third woman delivered the medication to Silva’s wife, and cited text messages indicating that she proceeded to carry out the abortion at home.

The couple, who have two daughters, divorced in February.

Silva’s lawsuit is pursuing a wrongful death case, arguing that the three women who assisted his ex-wife’s self-managed abortion are culpable for murder under state law. Former Texas Solicitor General Jonathan Mitchell, the credited architect of Texas’s restrictive abortion ban, is representing Silva.

Mitchell also wants to add the abortion pill manufacturer as a defendant once it is identified, the Tribune notes. Along with the over $1 million Silva seeks, the lawsuit is pursuing an injunction to stop the defendants from distributing abortion pills in the state.

Read more at The Texas Tribune

House Republicans’ Crazy Caucus Responds to Biden’s Budget With an Utterly Unserious Proposal

Have fun with this one, Speaker McCarthy!

House Freedom Caucus Chairman Rep. Scott Perry
Anna Moneymaker/Getty Images
House Freedom Caucus Chairman Representative Scott Perry at a press conference on March 10

While President Biden’s budget proposal calls for expanding services, from childcare and universal pre-kindergarten to Medicare, an extremist group of House Republicans countered with their bargaining terms for agreeing to raise the debt ceiling: Cut, cut, cut.

The House Freedom Caucus released their demands on Friday, calling to slash Biden’s plan to relieve over 40 million people from student debt burdens, rescind unspent Covid-19 funds, cut climate change funding and $80 billion for IRS enforcement, and cap future spending for the next decade at 2022 levels.

The radical proposal also calls to restore work requirements on welfare programs and restore nondefense discretionary spending to pre-Covid levels. And it ambiguously calls to end “federal regulations and subsidies” in order to increase domestic energy production.

The debt ceiling is the limit to how much the government can borrow to pay for spending that Congress has already approved. Congress has to raise the ceiling by the summer in order to avoid potentially defaulting, which would cause a massive crisis that could upend the global economy. On Friday, Treasury Secretary Janet Yellen warned the House Ways and Means Committee that such a crisis has never happened before and its occurrence would “trigger an economic and financial catastrophe.”

The House Freedom Caucus has outsize influence over the party direction. It forced Kevin McCarthy to concede to an array of demands in exchange for support for his speakership bid. Since then, McCarthy has had to tread somewhat lightly between the ultraright caucus and the rest of his party.

Republicans have been unified in their opposition to a simple raise of the debt ceiling and have demanded that Democrats accept cuts to spending instead, but the party has not come to a consensus around the nature of those cuts.

While McCarthy and most Republicans are happy to cut spending, the House Freedom Caucus’s demands may be a bridge too far for some members, politically. Even if McCarthy and other Republicans somehow bless the House Freedom Caucus’s proposed cuts, the package would likely be dead on arrival in the Democratic-led Senate and would certainly be vetoed by Biden in any case.

The president, after all, has been adamant that he won’t negotiate over the debt ceiling. “I don’t know [if] there’s much to negotiate on,” he said on Friday.

What Is Silicon Valley Bank, and Why Is It Collapsing?

The nation’s sixteenth-largest bank—and a favorite of tech startups—is having The Worst Week Ever.

Silicon Valley Bank
Smith Collection/Gado/Getty Images

Silicon Valley Bank, a major lender for tech startups, was shut down Friday by California regulators.

SVB was struggling to raise enough funds to offset a nearly $2 billion loss on bond sales. Customers worried that the bank would collapse entirely and rushed to withdraw their funds, further destabilizing it.

The California Department of Financial Protection and Innovation swooped in and closed the bank Friday morning, putting the Federal Deposit Insurance Corporation, or FDIC, in charge of SVB’s assets.

The FDIC announced that SVB’s branches will reopen Monday, and insured customers will be able to access their deposits then.

Here is a look at what happened to Silicon Valley Bank.

1. What is Silicon Valley Bank?

Silicon Valley Bank is the sixteenth-largest bank in the United States. It primarily operates in Northern California and thus is relatively unknown outside of Silicon Valley.

However, the bank partnered with nearly half of all venture-backed technology and life sciences companies in the U.S. Silicon Valley Bank lent to higher-risk startups that have taken a hit from the Federal Reserve’s high interest rates as well as decreasing venture capital investment.

2. What went wrong?

Silicon Valley Bank announced Wednesday evening that it needed to raise more than $2 billion. It outlined a plan to do so that included selling $1.25 billion in common stock, which are shares that give holders voting rights, and $500 million in convertible preferred shares, which do not give the holder voting rights.

SVB also said that investment firm General Atlantic had agreed to a deal to sell $500 million in common stock.

But SVB’s customers were apparently not appeased by the plan, and the bank’s stock value has plummeted at least 60 percent since then.

3. What caused the collapse?

The Fed has hiked interest rates aggressively over the past year to try to bring down record-high inflation. The higher rates caused venture capital investments to shrink, while the bank’s clients used up cash much faster than before due to price increases. As a result, SVB’s startup customers had far less money to deposit.

To make up for its cash losses, SVB sold $21 billion in securities—but at a $1.8 billion loss, prompting the plan to sell off shares and stabilize itself with the new funds.

Instead, investors panicked and began withdrawing their money from the bank. This created a vicious feedback loop, where the bank appeared increasingly unstable and unsustainable, prompting more customers to take out their money.

4. What was the bank trying to do?

SVB was in talks to sell itself, right up until regulators took over, after its attempts to raise more cash failed. Several large financial institutions were reportedly considering purchasing the bank.

But because so much money was flowing out as customers withdrew their funds, it was difficult to assess SVB’s value anymore, making it less appealing to any potential buyers.

5. Why is this important?

Investors are worried that SVB’s troubles are a bellwether of what is to come for the rest of Silicon Valley, and the financial sector at large. The day before SVB announced its fundraising plan, cryptocurrency lender Silvergate Capital Corp said it would be shutting down, rattling the market. Shares in other banks fell Thursday as concerns over SVB grew.

The high interest rates mean that other banks that attempt to sell off bonds to make fast cash will be forced to do so at a loss, like SVB, according to Bloomberg. If customers get nervous, banks will have to compete harder to keep them, for instance by offering higher interest rates on savings. Doing that will chip away at what the banks are able to earn for themselves.

Things will be particularly difficult for small and midsize banks, Bloomberg noted. Those institutions don’t have as many funding flows, meaning they would have to sell more stock and take more hits.

Trump Will Probably Be Forced to Listen to the Revolting Access Hollywood Tape in Court

A judge has ruled that the offensive recording can be used as evidence in E. Jean Carroll’s defamation trial against him.

Billy Bush of “Access Hollywood” interviews Trump
Rob Kim/Getty Images
Billy Bush of “Access Hollywood” interviews Trump in 2015.

A federal judge ruled Friday that the infamous Access Hollywood tape in which Donald Trump bragged about groping women without their consent can be used as evidence in the defamation trial brought by a woman accusing him of rape.

Writer E. Jean Carroll is suing Trump for defamation and sexual assault. Trump has rejected the rape allegation and repeatedly argued that the 2005 recording of him was just “locker-room talk,” and thus irrelevant to the case.

But Judge Lewis Kaplan determined otherwise. “In this case, a jury reasonably could find, even from the Access Hollywood tape alone, that Mr. Trump admitted in the Access Hollywood tape that he in fact has had contact with women’s genitalia in the past without their consent, or that he had attempted to do so,” he wrote in his decision.

Kaplan also ruled that testimony from two other women who accuse Trump of sexually assaulting them can be introduced as evidence in the trial. Most of the evidence that Mr. Trump seeks to keep from the trial jury is to the effect that Mr. Trump allegedly has abused or attempted to abuse women other than Ms. Carroll in ways that are comparable to what he allegedly did to Ms. Carroll,” he wrote in his decision. “In other words, Ms. Carroll offers evidence to show that Mr. Trump has a propensity for such behavior.”

Carroll accused Trump in her 2019 memoir of raping her in the Manhattan Bergdorf Goodman department store in the mid-1990s. She has sued him twice for defamation: first in 2019, when he said she made up the rape allegation to promote her book, and again in November for posts he made about her on social media. She isn’t alone: At least 26 women have accused Trump of sexual harassment or assault since the 1970s, all of which he has denied.

The Access Hollywood tape, from a 2005 taping of the show, caught Trump on a hot mic saying, “When you’re a star, they let you do it. You can do anything. Grab ’em by the pussy.” It became public in 2016, just days before his second debate against Democratic presidential nominee Hillary Clinton.

Now, it seems, Trump will soon have to hear the tape replayed to him in court. Kaplan has set the trial date for April 25.

Is This How Trump Ends Up in Jail?

His hush payments to Stormy Daniels and subsequent cover-up are hardly his biggest crimes, but the Manhattan D.A.’s invitation for Trump to testify suggests he may be indicted for them.

Anna Moneymaker/Getty Images

Finally, after decades, the law might be catching up with Donald Trump. The invitation to him to testify next week from Manhattan District Attorney Alvin Bragg signals, according to many reports, that Bragg’s investigation into the Stormy Daniels matter is winding down and that an indictment of Trump may be imminent. The indictment would be for breaking election and business record laws by allegedly paying $130,000 in hush money to Daniels and subsequently covering it up.

Not his biggest crime, by a long shot. I’d rank it about fifth at best (fomenting an insurrection, accepting foreign help during a campaign, ordering a state official to “find” 11,780 votes, all the tax stuff over many decades, for starters). But even so, a felony.

Trump denies it, of course. He claims he had no interest in Stormy Daniels (whom he refers to as “Horseface”). It’s all a “Witch-Hunt,” like all the other hoaxes. His statement mentioned George Soros, the “Radical Left media,” Hunter Biden, and violent crime (although not the violent crimes allegedly committed by him, as in against his first wife and E. Jean Carroll).

The law grinds slowly. Politics, however, like Niagara Falls, never stops. So what are the politics of this? It likely has a marginally positive impact for Trump in a GOP presidential primary. It gives him another target, something else to whine about. I doubt his opponents will really be able to attack him over it; they’ll just sound like they’re defending the corrupt, Soros-backed, radical-left deep state.

One little-examined question, however, is whether an indicted Trump draws an anti-Trump Republican primary vote to the polls. For example, there are about 5.3 million registered Republicans in Florida. In the 2016 primary (the most recent competitive one), about 2.3 million people voted. That’s not bad, for a primary. Still, it means 57 percent of Republicans didn’t vote, and we can reasonably assume, because all the political science says so, that the primary voters were more extreme ideologically than nonvoters. So if half a million or so less-MAGA-oriented Republicans come out in a primary to vote against Trump, he loses. He maybe loses in that state to Ron DeSantis anyway, but the basic formula repeats elsewhere.

Anyway. Just reading his crazy statement is a chilling reminder of what life was like when we had to pay attention to that maniac every day. He’s just the most poisonous person ever. What a joyous day it would be if he were actually hauled off to a jail cell.

Feeling Bold, GOP Now Pushes for D.C. Cops to Use Neck Restraints and Hide Body Cams

Republicans are pretty high on the whole “overturn democratically approved D.C. reforms” thing.

Andrew Clyde and Kevin McCarthy talk while seated.
Tom Williams/CQ-Roll Call, Inc/Getty Images
Representative Andrew Clyde (right) talks to Kevin McCarthy during the speaker of the House drama in January 2023.

Not even a full day after the Senate overwhelmingly voted to overturn Washington, D.C.’s criminal code updates, Republicans are now pushing for D.C. officers to be able to put people in chokeholds and more easily hide their body camera footage.

Republican Representatives Andrew Clyde and Andrew Garbarino introduced a House resolution Thursday targeting criminal justice and policing reforms made in the aftermath of a string of police killings, including the deaths of George Floyd and Breonna Taylor.

The duo is specifically targeting D.C.’s Comprehensive Policing and Justice Reform Emergency Amendment Act of 2022, Axios reports. The D.C. legislation, which passed the City Council last year but is now being reviewed by Congress, enacts an array of reforms, such as outlawing the use of neck restraints, like that used by Minneapolis Police Officer Derek Chauvin to kill Floyd in May 2020. The bill also calls to make body camera footage of officer-caused deaths or serious uses of officer force more accessible to the public.

The D.C. legislation also seeks to expand membership and inclusion on governing bodies like the Police Complaints Board and Use of Force Review Board. It would also ban employment of new officers if they were previously determined by agencies to have committed serious misconduct or to have been forced out of previous roles for “disciplinary reasons.”

Some of the policies, like banning police neck restraints, had been enacted through temporary legislation since the summer of 2020. But all these were to be codified by the  broader reform package that Republicans are now vying to overturn. Axios reports that the resolution to overturn such baseline reforms already has 15 co-sponsors.

While this new GOP effort in favor of chokeholds and against democratically approved reforms may seem particularly brazen, it’s clearly about momentum. Just yesterday, a successful right-wing-driven campaign against D.C. updating its 100-year-old criminal codes led to 81 senators voting to overrule the criminal code updates.

The updated criminal codes were even more modest than the police reforms now being challenged; they mainly dusted off archaic standards and effectively made it easier for courts to prosecute crimes. But overturning these mild policies clearly emboldened Republicans to go a step further. 

Texas Wants to Appoint a Special Prosecutor to Pursue People Who Get Abortions

Because not enough people are getting punished, apparently

Demonstrators carry pro-choice signs.
Abortion rights demonstrators march outside the Harris County Courthouse in Houston, in October.

A Republican lawmaker in Texas has introduced a bill to appoint a state special prosecutor to handle abortion law violations, among other issues, The Washington Post’s Caroline Kitchener reported Thursday.

The bill, introduced in the state House of Representatives Wednesday, would let the state Supreme Court appoint a special prosecutor to handle violations of Texas election laws, human trafficking cases, and violations of the state’s abortion laws.

Since Roe v. Wade was overturned, Texas has banned abortion after six weeks, before many people even know they are pregnant. There are no exceptions for rape or incest, and only a few to save the life of the pregnant person. Individuals are also allowed to sue anyone who provides abortion care or helps someone get an abortion, in what’s known as the state’s vigilante law.

But apparently not satisfied with that, Texas Republicans have begun to introduce bill after bill to curb access to abortion, despite the fact that six out of 10 Texas voters say they support abortion in all or most cases.

One lawmaker introduced a bill in February that would compel internet providers in Texas to block websites that sell or provide information on how to obtain abortion pills. Just last week, another official introduced a bill that would ban credit card companies from processing transactions for abortion pills. Both measures are aimed at cutting off a crucial resource in maintaining access to safe abortion.

Texas is not the only state to ignore what constituents actually want when it comes to abortion laws. Georgia Republicans have introduced a bill that would classify abortion as homicide, despite almost two-thirds of Georgia voters already objecting to current abortion restrictions. A Kentucky lawmaker also introduced a bill classifying abortion as homicide, even though the state voted to protect abortion access during the midterm elections.

The most egregious example is Kansas, where residents voted in August to keep abortion protections in the state constitution. Lawmakers responded by introducing legislation that would let individual cities and counties ban the procedure, a blatant attempt to override the will of the people.

Writer Jessica Valenti pointed out that the latest Texas legislation could be how anti-abortion lawmakers make sure their agenda gets carried out. She noted that many district attorneys are refusing to pursue cases that criminalize abortion, so a special prosecutor for abortion law violations would make sure people are punished for getting the procedure.

One such attorney to take a principled stand against abortion prosecutions was Andrew Warren, a state attorney in Florida who had signed a joint statement with other elected prosecutors the day Roe was overturned, stating “our firm belief that prosecutors have a responsibility to refrain from using limited criminal legal system resources to criminalize personal medical decisions,” such as abortion or transgender health care.

Florida Governor Ron DeSantis fired Warren for signing the statement.

Biden Introduces Plan to Shrink the Deficit While Funding Childcare, Medicare, and Prekindergarten

The proposal: Tax the rich and eliminate subsidies for the fossil fuel industry

Kent Nishimura/Los Angeles Times/Getty Images
President Joe Biden takes questions from reporters after announcing his budget for fiscal year 2023.

President Joe Biden unveiled a $6.8 trillion budget on Thursday that would expand support for poor and middle-class Americans—and tax the rich to help pay for it.

“Folks, let me tell you what I value with the budget I’m releasing today,” he said at an event in Philadelphia. “I value everyone having an even shot. Not just labor, but small-business owners, farmers, so many of the people [who] hold the country together who have been basically invisible for a long time.”

The proposed budget includes hundreds of billions of dollars each for childcare assistance, health coverage assistance, home care for the elderly and disabled, paid leave for workers, free community college and prekindergarten, and homeowners’ and renters’ assistance. The plan is a blueprint of Biden’s priorities as he prepares—presumably—to run for reelection.

Biden said his plan would reduce the federal deficit by $3 trillion over the next 10 years, primarily by increasing taxes on wealthy Americans and corporations. He would also increase payroll and income taxes on single filers who make more than $400,000 a year and raise the corporate tax rate from 21 to 28 percent (in 2017, Donald Trump reduced it from 35 percent).

Biden already previewed another part of the plan earlier this week: extending Medicare into the 2050s, a direct challenge to Republicans who want to slash funding for the program. His budget would let Medicare negotiate prices for a wider range of prescription drugs, an expansion of part of the Inflation Reduction Act. The money saved by negotiating drug prices would then be reinvested in the Medicare trust fund.

The budget would also quadruple a newly implemented tax on corporate stock buybacks and eliminate tax incentives for the oil and gas industry, forcing companies to invest their funds back into the economy, instead of keeping money within their own organizations.

With Republicans in control of the House of Representatives, this budget doesn’t stand a chance of becoming reality. The GOP has made clear they are willing to hold the debt ceiling hostage in order to cut costs in the federal budget—though they have not said exactly how they propose to cut costs. Some Republicans have hinted at cutting Medicare and Social Security, then denied this intent following backlash.

Senator Rick Scott, who came under particular fire from Biden for a proposal to sunset Medicare every five years, immediately criticized the president’s budget.

Biden’s “budget should be a wake-up call for the American people,” the Florida Republican tweeted. “He isn’t concerned about reducing the debt or lowering inflation. He’s focused on throwing money at his woke agenda.”

Democrats, including Biden, have said they refuse to compromise on the debt ceiling, setting up a protracted battle. But if the debate drags out too long, the United States could be in economic peril. The government hit the debt ceiling in January and could default on its debt by the summer if the cap isn’t raised, according to Treasury Secretary Janet Yellen.

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