One of the benefits of being a Washington insider, from the president of the United States to the lowliest bureaucrat, is never having to admit your policies are wrong.

In the case of Silicon Valley Bank (SVB) — the nation’s 10th largest — the financial policy chickens of this, and previous administrations, have predictably come home to roost. Record debt, massive new spending, and the failure of regulators to see what was coming contributed to the run on SVB. It didn’t help that in 2018 President Donald Trump signed the biggest rollback of Dodd-Frank bank regulations since the global financial crisis of 2008, loosening rules on all but the largest banks and “opening taxpayers to more liability if the financial system collapses,” according to CNBC.

At first, Treasury Secretary Janet Yellen said there would be no bailout, but that quickly changed when the administration, which has been trying to convince us the economy is going swimmingly, likely began to consider the political implications of this and possibly other bank failures and threw a lifeline to the bank.

Naturally, President Biden is taking credit for saving the depositors’ money. Even those with deposits over the limit of FDIC insurance will be saved. Biden is now claiming to be Mighty Mouse. He’s come to save the day: “Thanks to the quick action of my administration over the past few days, Americans can have confidence that the banking system is safe. Your deposits will be there when you need them.”

A Wall Street Journal editorial has it right: “You can’t run the most reckless monetary and fiscal experiment in history without the bill eventually coming due. The first invoice arrived as inflation. The second has come as a financial panic with economic damage that may not end with Silicon Valley Bank.”

Indeed. At least 20 regional banks were hit with trading halts on Monday.

Even after the Trump bank regulation rollbacks, why didn’t bank regulators see this coming? If they did, why didn’t they do something to keep it from happening? That’s the flip side of not wanting to admit error. Insiders fear that by acting they might get blamed if it doesn’t work.

The Federal Reserve Board defines the primary purpose of the agency: “The Federal Reserve is responsible for supervising — monitoring, inspecting, and examining — certain financial institutions to ensure that they comply with rules and regulations, and that they operate in a safe and sound manner. Supervision of financial institutions is tailored based on the size and complexity of the institution.”

It appears this did not happen. Congress should invite those responsible to testify why nothing was done.

Financial adviser Ric Edelman emails to say he is glad regulators stepped in. The alternative, he says, would be, “Thousands of companies … out of business, millions out of work, and billions lost. Tech innovation would have been lost for a decade and there’d be a global recession a la 2008.” Even so, says Edelman, “The bank blew it, and the banking regulators blew it — in other words, same old story.”

Why must it be the same old story? Doesn’t even recent history instruct us as to what happens when we ignore common financial sense?

The financial crisis of 2007-2008, also known as the subprime mortgage crisis, resulted from bad financial decisions, mostly the lending of money to people who couldn’t pay it back. It led to the Great Recession that began in 2007, lasted two years and was the worst economic downturn since the Great Depression.

Government bailouts do not penalize bad management and lack of oversight, or risky investment strategies that caused the problem.

On the heels of SVB’s collapse came word that Signature Bank in New York, which recently made a play to win cryptocurrency deposits, abruptly closed and was placed into receivership. Signature held more than $110 billion in assets and some of the largest stakes among banks in the cryptocurrency industry. In perhaps the ultimate irony, Barney Frank is a board member.

At a time when retirees and others are seeing their stock market investments decline and polls showing there is dismay about the country’s financial future, Congress has an obligation to step in and hold accountable the policies and the people responsible for the SVB collapse and prevent new ones from occurring.

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