realclearwire | One thing is clear. At $319 billion and counting, the failures of Silicon Valley Bank and Signature Bank alone in the last two weeks are already on par with the entire 2008 financial crisis, which saw 25 banks failing, with $373 billion in combined assets. And with $620 billion of unrealized losses that triggered this crisis still pending, we may be just getting started.
What path policymakers will choose this time around is unclear. The country has never been more evenly split politically. Meanwhile, the regulatory system has attempted to stem the tide without the involvement of Congress or the White House. A political reconciliation, in other words, has been deferred.
Political issues come and go, but financial panics create political movements because they hit Americans directly, in their bank accounts. Voters pay attention.
The movement that results from this panic will depend ultimately on whom voters blame for it. That scapegoat, whether real or imagined, will determine where on the political spectrum the movement leans.
Many Americans continue to identify government itself as the top non-economic issue they face. Inflation, a problem created by government, is their top economic problem. Most Americans believe the federal government is too big and doing too much. In places like real-life Indiana, Pennsylvania or fictional Beaver Falls, it is abundantly clear that Americans have lost faith in their leading institutions.
“You sit around here and you spin your little webs and you think the whole world revolves around you and your money,” George Bailey tells his antagonist in “It’s a Wonderful Life.”
Bailey was referring to the machinations of a powerful banker, but his words are fitting in an unintended sense, too: in American politics, realignments begin because the world revolves around voters and their money.
0 comments:
Post a Comment