President Joe Biden’s guarantee to protect depositors at the failed Silicon Valley Bank is “crony capitalism,” entrepreneur Vivek Ramaswamy said Monday on Newsmax.
In an interview on “National Report,” Ramaswamy, a 2024 GOP president candidate, said SVB was mismanaged and tech companies were foolish to invest.
“I think this is crony capitalism all the way down,” he said of the Biden guarantee.
“SVB did take excessive risks due to mismanagement,” as did “a bunch of tech companies in Silicon Valley that put way more money in SVB than they should have.”
“The way capitalism works is that people are held accountable for their own decisions,” Ramaswamy asserted. “But instead … the government stepped in to save them. And here’s the dirty little secret. Silicon Valley Bank and their cronies for years argued that banks like SVB were subject to looser requirements for capita. … precisely because they said ‘we’re never going to be systemically important, so the government will never have to save us, so we get to take more risk.'”
“They made a $5 billion commitment last year to sustainable and green operations for a healthier planet without focusing on a healthier balance sheet,” he added.
According to Ramaswamy, it’s not just President Joe Biden who should be blamed.
“Many Republicans are also captured by the Silicon Valley donor class,” he charged. “We have one set of rules for everyday Americans where we say $250,000 is the maximum. We have one set of rules then for the likes of Silicon Valley Bank. When things go wrong, those rules go out the window.”
He also pointed the finger of blame on the Federal Reserve.
“The Federal Reserve has made deep-seeded mistakes in this country over the last several decades by trying to play God, The problem is, they’re not God and they’re playing God with a fat finger,” he charged.
“They’re not even getting it right, trying to optimize for employment and inflation. They’ve demonstrated themselves to be completely incapable and totally incompetent.”
He said the Fed’s job is “restoring the dollar as a reliable unit of measurement, which is what the Federal Reserve used to do under Paul Volcker.”
But Ramaswamy also criticized “venture-funded” companies for using their workers as “pawns” in the wake of the SVB failure.
“What these companies, if they lost balance-sheet capital, especially the venture-funded companies in Silicon Valley, they can just get venture investors to put in more money to cover for that. But that involves dilution. That means they make less money,” he explained.
“They don’t want to do that. So they’re disguising this. They’re using workers as a pawn for just advancing a self-interested argument,” he stated, adding “much of the Republican Party itself is captured — because they’re dependent on that donor class.”
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