Some banks are huge. Some are small. Some serve all possible types of customers, while others, such as Recently kaput Silicon Valley BankCreate a special niche that caters to the needs of venture capitalists and technology-related startups. But there is another important category in the classification of banks, according to a new right-wing narrative: the “awakened bank.”
With the SVB closing last week, federal lawmakers have begun picking at the wreckage of a major first bank failure In more than a decade, some have decided the problem is ideological. Ir Twitter And the televisionConservatives characterize what was classic bank run – Lou The largest since 2008 – as a morality play.
Quoting how SVB was Employee resource groups (ERGs) to assist the company’s various identity groups in career development, Donald Trump Jr. chirp that the bank collapse was “what happens when a left-wing ideology pushes/woke up” that “takes”.[s] precedent for commonsense business practices. Senator Josh Hawley (R-Missouri) chirp, “So these guys at SVB spend all their time funding garbage (“climate change solutions”) instead of actual banking and now they want a handout from the taxpayers to bail them out.” (US Department of the Treasury “Bailing out” depositors using money from a bank fundnot from taxpayer money.) On Fox News, Rep. James Comer (R-KY) claimed SVB “has been one of the banks most awake in their pursuit of it ESG-type Politics.” Republican Florida Governor and (potential presidential candidate) Ron DeSantis also appeared on Fox, saying the bank was “very interested in DEI and politics” while it was in tweetStephen Miller, a former member of the Trump administration, asked, “How many hours and dollars have been spent on stock/DEI/ESG/climate scams.”
Today, the word “wake up” can be stretched and twisted to apply to virtually any issue the right opposes, such as its outrage over it. “Capitalism woke up” – which companies provide Pay travel expenses for an abortion After a coup Roe v. Wadeor Recognizing climate change as a problemor, perhaps more commonly, include any diversity and inclusion initiatives as part of company policy. The word originated from black political history, and became widely known during the boom Black Lives Matter movement in 2014. As my colleague Aja Romano explained thathas ties to “awareness of systemic white violence against blacks”, but in recent years has been co-opted by the right as its favorite bogeyman.
So what on earth makes a bank wake up?
Andy Kessler, opinion writer for The Wall Street Journal, Consider a recent article On the reasons for the failure of the SVB, he highlighted that the bank’s board of directors was 45 percent women and it also had one black member, one “LGBTQ+” member, and two veterans. “I’m not saying 12 white men would have avoided this mess,” Kessler wrote, “but the company may have been distracted by the demands of diversity.” Vox reached out to Kessler for further clarification; We had not received a response by the time of posting.
said Aditi Shekhar, co-founder of a fintech startup called Zeta.
Zeta has dealt with SVB in the past and was considering banking with them again before the crash happened. (Disclosure: Vox Media, which owns Vox, also dealt with SVB before it closed.) payroll provider uses Zeta, Rippling, was facing delays due to SVB failure; For a few days last week, Shekar wasn’t sure if her company would be able to offer payroll. One of the things that initially attracted her to SVB was that it tried to invest in funds led by women and members of the LGBTQ community. “But do I think technology or finance is popping up a lot? No, I don’t think it has woken up,” she said.
It is unlikely that the SVB board was “dispersed” by diversity and inclusion when, by Kessler’s own admission, the board was still predominantly male and mostly white, suggesting no real departure from the status quo in boardrooms across the financial sector. according to Data from McKinseyAs of 2021, 64 percent of executives in the financial services industry are still white men. While SVB had a ESG commitment Focused on climate and sustainability, I’ve worked with a lot of clients in the technology space – digital media player manufacturer Roku, gaming platform Roblox, online marketplace Etsy, pharmaceutical companies – Which does not have a clear obsession with the values of social justice. Perhaps there is a small subset of the financial sector that could be called “woke up”, but that’s it Anti-capitalist investors Lenders describe being converted to profit margins by the traditional banking system; They don’t claim to represent half of all VC-backed startups in the country, as SVB has done.
“If anything, the problem with failing banks is the lack of diversity, and especially the lack of diversity in their balance sheets,” Zac Teutch, founder of a financial advisory firm for progressives called Values Add Financial, told Vox via email.
“It’s hard for me to see how the SVB’s policy had so much to do with changing interest rates and its balance sheet being weak,” Twitch added. “This sounds like an ideology looking for a pattern of reality.”
It’s a pattern that conservatives seem to find in a lot of unlikely places these days. In the last years, “waking up” It has become a right-wing weapon that can change shape to describe the countless inventions of the culture war. It has been applied not only to explicitly anti-racism policies and theories, but also just to acknowledge that non-white people exist and sometimes participate in society. (See: Conservative Rage Is Over Netflix casting people of color of its products, or the belief that a Disney movie is underperforming is evidence of “Go wake up, go bankruptAphorism.) It has even been published as The cause of the wildfire crisis in California.
The real reason for the collapse of SVB, eg my colleagues You already have to explainthat the bank showed signs of not being financially strong amid rising interest rates and Decline in the technology industry, where her money was largely concentrated. Last week, investors got scared and started withdrawing their money; With deposits depleted, the bank could no longer stay afloat. There had been a few days of deep uncertainty about what would happen to everyone who dealt with the SVB, until the federal government announced on Sunday that it would help Guarantee all depositors They got their money back. But these facts haven’t stopped the conspiracy theory that SVB proves that supporting projects that help with the climate crisis or promote diversity is a recipe for financial disaster.
The mechanics of running banks aren’t much of a mystery: if everyone starts demanding their money from the bank at the same time, they’ll run out of cash and crash. And investors started taking money not because they thought the bank had “woke up” too much, but because they were Upset after some recent financial moves Announced by SVB. As Bloomberg wrote, Matt Levine explained on Friday, while we realize in hindsight that SVB’s financial situation wasn’t great, “It’s pretty much self-fulfilling; if all the VCs hadn’t decided at once to cash out, SVB probably wouldn’t have collapsed.” Arguably, the fire was ignited by the famous venture capitalist and Republican leader Peter Thiel, who owns the VC Fund He was among the first investors to withdraw their money from SVB. (You should note that Thiel has supported anti-wake bank It’s called GloriFi. I went bankrupt a few months ago).
It is true that people across the political spectrum, not just conservatives, are outraged by the collapse of the SVB and the government’s assertion that none of the depositors lost any money. for both left and right, Rescue It is told as a preferential treatment for the elite class who must face the consequences of their mistakes. “I’ve never seen any of these men crying for a bailout take an even ounce of accountability for their actions. It’s downright rude.” chirp Rep. Alexandria Ocasio-Cortez (D-NY).
But in the past year, the right-wing push against financial institutions in particular has intensified. Conservatives have recently taken an attack on ESG, which is a short investment trend of “environmental, social, and governance” principles, which generally indicates that the fund takes these factors into account when considering investment risks and results. Among their other “awakened” targets Fossil fuel subsidies investment giant BlackRock.
ESG has a lot of critics – many claim that ESG doesn’t actually move the needle on climate, diversity, or whatever other bad it purports to improve, arguing that companies stick to wash the effect so they can get the ante on the back without meaningfully changing their investment strategy. For conservatives, the problem with ESG is that it tries to change too much, which gets in the way private sector freedoms With worse performance financially as well. a 2021 analysis of New York University’s Stern School of Business found that, overall, there was a positive relationship between ESG and companies’ financial performance.
If anything, bank is the opposite of “woke up.” It is a powerful institution that has historically served the privileged elite Refusal to serve marginalized groups Or offer them predatory terms. SVB was a bank that served the major players in Silicon Valley – the industry that heralded An app-based gig economycollegiate Huge batches of data and enabling factors Surveillance capitalismand growing partners in United States Armyno less – none of them very popular with the left.
Although there is not an iota of evidence to support the claim that the public “awakening” of the SVB caused its downfall, the heated public reaction around the downfall of the SVB – and a sense of resentment that the rich and powerful are saved when ordinary people cannot save them. They don’t get the same sympathy – maybe it’s worth some reflection.
For Shukur, it underlined a reality about how the public views the world of technology and investing. “They don’t see technology as being at the center of innovation. They don’t see technology providing value for the entire country in the long run.” Instead, what they see is an industry that can be arrogant, accomplished, and rich people don’t care. [about] other parts of the United States. And I think we have to listen to that for a second and say, “Well, why does this perception exist?”
