I’m talking about people like David Sachs, an entrepreneur, venture capitalist, and member of the so-called Paypal mafiaa group of founders and early employees that included anti-government billionaires Elon Musk and Peter Thiel. on TwitterSachs decries against the “wasteful spending and money printing coming from Washington” and the evils of what he calls “bedonomics”.

But on Friday, Sachs frantically called on big government to bail out the Silicon Valley bank. he chirp: “Where is Powell? Where is Yellen? Stop this crisis now. I declare that all depositors will be safe. Place the SVB with the top 4 banks. Do it before Monday’s opening, otherwise there will be contagion and the crisis will spread.”

And I’m talking about people like one of Musk’s confidants, investor Jason Calacanis, who has been Tweet along the same lines on Saturday, but in all caps: “You must be absolutely terrified right now—that’s the proper reaction to a bank. @POTUS & SecYellen must get on TV tomorrow and guarantee all deposits up to $10 million or this will make chaos. “

Short version: I want my big government bailout, and I want it now.

Federal Reserve Chairman Jerome H. Powell and Treasury Secretary Janet L. Yellen I acted decisively On Sunday, he reassured depositors at the failed bank that they would have immediate access to all of their money, not just the $250,000 guaranteed by the Federal Deposit Insurance Corporation.

It was the right move, and with a host of other measures it has succeeded – so far – in preventing what could have been disastrous for the regional banks. But these steps could only have been taken by a large government with vast resources and the willingness to use them for the common good. It turns out that “overspending and printing money” aren’t always bad things, after all.

There is no wise and effective government regulation. In 2010, after the financial crisis and The Great RecessionPresident Barack Obama signed into law The Dodd-Frank Act established a comprehensive set of new rules for how banks should operate and how they would be scrutinized. In 2015, Greg Baker, chief executive of SVB Bank — who was until last Friday, when the bank collapsed and was sacked — joined lobbyists asking Congress to weaken mandatory safeguards for “mid-sized” banks like his own. Congress complied by pass edit law Signed by President Donald Trump in 2018.

in Letter to Becker This week, Sen. Elizabeth Warren (D-Mass.) wrote that if the original Dodd-Frank rules were still in place, the SVB crisis might not have happened. Warren wrote that the bank “would have been required to maintain stronger liquidity and capital requirements and to conduct regular stress tests that would have required SVB to support its business”.

Baker had told Congress years earlier that the SVB should be spared from having to undergo an annual stress test by federal regulators because the bank hired “highly skilled risk professionals” to detect any signs of balance sheet problems. But for eight months before the bank collapsed, according to Warren, SVB did not have a risk management director. Whatever kind of risk analysis the bank might have done, it was clearly insufficient.

Dodd-Frank imposed the strictest scrutiny, including annual stress tests, on banks with more than $50 billion in assets. The Deregulation Act of 2018 raised that threshold to $250 billion — meaning SVB, which had nearly $200 billion in assets when it collapsed, was exempt.

In hindsight, in Baker’s view, which might have been better for SVB: bearing the extra expense and hassle of exercising annual risk by federal examiners, who might have seen the problem of the bank’s long-term bond holdings before it became an acute crisis? Or speed blindly towards the cliff until it’s too late to stop?

These are rhetorical questions. Congress should quickly restore the stricter Dodd-Frank oversight system, which would give our financial system a better chance of identifying the next hidden financial landmine before it explodes.

The moral of this story is that when individuals are threatened and beaten by forces beyond their control, it is the government’s duty to step in and help. Which is what progressives have been saying all along.