The SVB Takes

Silicon Valley Bank Collapse: Reactions and Takes from the Right

The following, part of a new experimental format, is a series of short takes on the Silicon Valley Bank failure from different authors, each with experience in either finance, business/venture capital, or economics.

— The Editors

No Country for Demagogues, by Michael Anton

For a decade or so now, we’ve been told that the greatest danger facing America is the rise of a demagogue who will overthrow Our Democracy™. I never believed it, but now have irrefutable proof that it was always nonsense.

The Silicon Valley Bank fiasco is tailor-made for a demagogue to ride to the White House. Just look at that name. Could Dickens himself have come up with a better moniker for a corrupt institution? First of all, it’s a bank — it says so right there in the title — and not only have banks never been popular, their credibility has been in freefall since 2008. Americans trust Big Tech even less. Wait, what were those other two words? Oh right: that famous strip mall in Northern California where Tesla-driving brogrammers bid up nondescript tract homes into the mid-seven figures while hectoring and censoring their fellow Americans.

If a modern-day Chuck Dick dared float that coinage, the critics would roast him alive for his pathetic lack of imagination. It’s about as subtle as naming your villains Darth Sidious and General Grievous. And yet… there it is, real as can be.

The scandal is just as scandalous as the name promises. Greedy bankers, serving useless arrogant tech overlords, were too stupid or lazy or drugged out or obsessed with wokeness or whatever to keep track of interest rate hikes, which proceeded to erode their balance sheet, break the bank, and threaten to evaporate deposits, some of which totaled two thousand times the insured limit.

In a “free market” system, these fools would be on their own. But ours is not a free market system. In our system, if you are rich and powerful — and, most important of all, a friend and supporter of the regime — you can make any catastrophic error you want with the assurance of being bailed out. You can rob, cheat, lie and grift; you can provide no useful service to anyone; you can become fabulously wealthy creating, literally, nothing of value; you can poison the minds of innocent children and destroy the attention spans of a generation; you can be the absolute scum of the earth; and then you can risk all your ill-gotten gains on an idiotic error that a junior college accounting major would have been able to spot, and the federal government will make sure you don’t lose one dime.

Meanwhile, if you live in a flyover state and a train carrying toxic chemicals derails, poisoning your water, soil, and air for God-knows-how long, you’re lucky if the feds send one bureaucrat to tell you everything is OK despite your nagging cough and that funny smell. If you lose your assembly line job to outsourcing, well, learn to code. If you miss a house payment because of your layoff, you better hope you’re from the right demographic to qualify for aid.

As I said, a real demagogue could easily surf this wave of outrage to the White House. But no one will. DeSantis won’t because he’s not a demagogue. Trump won’t because… well, that’s harder to say. Because he’s a lifelong debt aficionado and the thought of questioning his favorite financial instrument strikes him as impious? Because there’s only so far he’s willing to go in denouncing the ruling class? Whatever the reason, he won’t either.

Napoleon famously boasted that he saw the crown of France lying in the gutter and picked it up with his sword. Well, whatever hat the President of the United States wears is similarly lying in the street, waiting for some ambitious striver to pick it up and put it on. No one will. It’s not merely that no one dares; no one even notices it’s there. That’s how at risk from “demagoguery” the USA is. Which is to say, not at all.

Michael Anton is a lecturer and research fellow at Hillsdale College and a senior fellow at the Claremont Institute.

Silly Con Valley, by Present Witness

In case you missed it, the ‘libertarian’ venture capitalists just convinced the government to guarantee all uninsured deposits in ‘too big to fail’ (or in this case, ‘too important’) fiat banks in order to prop up the traditional banking system. That’s right, the pro-crypto, pro-decentralized finance, anti-government ‘disruptors’ just begged the government to prevent the disruption. Notice that their narrative was never, “this is why we need crypto,” but rather, “this is why we need bailouts.” In under a week, the top personalities in Silicon Valley eviscerated their reputations and hard-earned goodwill, built up over years of thinking out loud in public, in an obviously desperate, hysterical, and financially-motivated attempt to protect their own personal wealth and portfolio companies. It turns out that nothing turns a libertarian into a socialist faster than a little bit of financial pressure.

The bailouts now occur in private markets, guaranteeing that the public never has an opportunity to capitalize. The real kicker though, will be in a few years when you see the exact same individuals, who were just backstopped by hundreds of billions of dollars in public funds, ringing the bell at the New York Stock exchange as they dump their latest unicorn on public markets for hundreds of billions of dollars in private profits. It is difficult to put into words the scope of this ideological betrayal, and most of them likely didn’t even consider it as it happened so fast.

The US isn’t a country anymore, it’s an economic zone. Its founding principles, values, and morality almost entirely wiped away. Those of us paying attention understand this. So fine, steal with both hands, but don’t demean us by lying about it. There are no solutions, only tradeoffs: The VC’s will keep their wealth, but they won’t keep their prestige. Time exposes those who view credibility as something to be cashed in on rather than cultivated.

Present Witness is an investor and threat analyst providing analysis through an economic lens.

The Charade of Free Market Banks, by Peter Rex

What happened at Silicon Valley Bank should be expected for all but naïve spectators who believe in the charade of free market banking. Our banking system is as it has always been: an invisible arm of the government.

The federal government has a vested interest in citizens having trust to deposit money with banks. The deposits are in turn lent to or invested in businesses, assets, and nonprofits. Banking is a mission-critical economic organ of the state, without which the economy will fail and tax revenues fall.

The banking system requires, at times, bold action where the bank depositors are protected for the sake of ensuring confidence does not get sucked out. The government learned to act aggressively the hard way: the Great Depression. The SVB crisis showed the astounding pace of a bank run, led by rational actions on an individual level while irrational on a collective level – not unlike a prisoner’s dilemma. Since the individual and collective interests are so at odds with deposits, the government must be the rational actor of last resort to stem widespread panic.

Such government bailouts are nothing new, albeit never so unveiled. The Reagan administration intervened in the Continental Illinois Bank collapse (the largest of its time) in 1984 and both Presidents Bush and Obama saved numerous financial institutions in the 2008 crisis. The UK system, whose leadership the USA learned from before assuming post-WWI, has always acted in a similar pattern.

The SVB government takeover averted disaster and should net a profit, as SVB appears to have good long-term assets. However, this action exposed the charade – the market now knows banks get uncapped upside while the government takes the ultimate downside. This collateral damage, caused by choosing the lesser of evils, creates a terribly perverse incentive.

The most important question now should be how to overhaul this opaque, archaic banking system with so many points of failure. More disasters are inevitable and around the corner. We must move quickly, leveraging new tech like blockchain to create a new system where knowledge, power, and skin in the game are no longer dislocated.

Peter Rex is the founder of REX, a technology, real estate, and investing company. He holds a BA in philosophy & government from Georgetown and JD from Harvard Law.

Get Ready for the Storm, by Jon Stokes

In January 2009, in direct response to the global financial crisis of 2008, an obscure group of cryptography nerds kicked off a seemingly quixotic effort to meme a new currency into existence. Whether bitcoin, the product of that effort, counts as a ‘currency’ or not, no one can deny they’ve succeeded in creating a globally accessible, peer-to-peer, digital native asset class that is more valuable and more liquid than almost any of its early backers dared dream.

And now, in 2023, they’ve gone from trying to meme forth a new monetary system to trying to meme the old monetary system into sudden collapse. Or at least, “cryptobros attempt to meme us into hyperinflation” is the narrative that’s taking shape in the wake of the collapse of Silicon Valley Bank. But is it true?

This viral Twitter thread about a new category of Very Online risk — social media risk — and Alex Tabarrok’s post provides a good overview of it. I’ve also heard it discussed extensively in Twitter spaces, with traders and money managers explaining how, in the 2008 crisis, most people still had to show up physically at their bank and stand in line to withdraw their money. But in 2023 it can be done with a few clicks, and the entire financial system has not even begun to come to grips with its newfound exposure to social contagions.

So the moment seems ripe for the same crew that memed the crypto craze into existence — its numbers now swollen by the massive run-up in crypto prices and its members emboldened by the success of r/wallstreetbets — to meme forth the complete collapse of modern finance, so that it can be replaced with a transparent, distributed digital ledger.

I find my own liberty-minded circles are split on whether this alleged accelerationism represents the true spirit of ’76 or whether these guys have crossed over into supervillain territory. But I personally see a different picture: they’re just pulling the fire alarm, not committing arson.

But will the distinction I’m drawing matter if the fire flares up and is then tamped back down for a bit longer by more emergency measures?

The increased level of financial repression and censorship that will swiftly be put in place should the system once again muddle through a 2008-level crisis will take your breath away. If you think things are bad now, just wait until ‘crypto signals in profile’ gets you unbanked and de-platformed.

If you don’t have the stomach for what’s coming and you have the option, then it’s time to consider going dark. Lock your account. Encrypt all your drives. Enable 2FA. Get a second passport. Come up with an exfil plan. Because insofar as there’s a widespread perception that crypto has come at the king, then if it misses we’re all going to catch hell.

Jon Stokes is an author, software developer, publisher and entrepreneur who has been building and writing about technology for almost 25 years. He’s an editor at

Nothing We Didn’t Already Know, by Charles Haywood

We all want to know why things happen — in this case, why Silicon Valley Bank died. We want to know why because we hope to dodge future harm. We believe, we know, that knowledge brings protection. But the collapse of SVB has no meaning at all, and thus asking why is wasted breath.

True, SVB’s collapse may be a harbinger, in the same way that a low rumble of an explosion on the horizon, followed by another, closer now, tells us something about our future. Yet to have meaning, an event must tell us something we did not know. What new has been learned? That our corrupt elites, the Regime, openly do anything and everything necessary to protect and enrich themselves? That there is no distinction between government and private actors in advancing the interests of the Regime? That the mass of Americans have let themselves be played for chumps? None of this is news.

We know, but again, we have always known, that there will be no reform resulting from cracks in the system. Change will only arrive borne by forces external to the Regime, and such change will not be gradual, but a step function. Those forces may be impersonal forces, when an economic system entirely built on fairy dust and fantastical wishes collapses, and as Rudyard Kipling predicted, the Gods of the Market Place crumble to dust, along with the power of those who relied on them. Or they may be very personal forces, the arrival of men who are the reified and focused will of those oppressed, who will cut through the tangled iron thickets the Regime has cunningly grown to protect what they have stolen from us, and will mete out to each member of the Regime what he has earned.

Some see in SVB’s end political irony, that the supposed libertarians of Silicon Valley ran to raid Daddy’s pocketbook when faced with ruin. But this is distraction. Libertarianism has always been a farce, the bastard child of Enlightenment/Left values and the naïve American belief that if everyone bootstrapped his own story, societal harmony would emerge spontaneously. No serious person believes this bedtime story anymore. Tech bros are merely tentacles of the Regime, not a band of independent thinkers.

Thus, as before SVB, so after. We wait to see what happens next, what will emerge from the currents of history we hear gurgling in the earth, beneath the place we stand.

Charles Haywood is an essayist and the Editor in Chief of The Worthy House.

Scroll to top