Welcome to Whose Economy Is It, Anyway?, where the rules are made up and the dollars don’t matter. Or at least that seems to be the view of the Yellen regime.

As Doug French noted last week, Silicon Valley Bank (SVB) was the canary in the coal mine. Over the weekend, Signature Bank became the third-largest bank failure in modern history, just weeks after both firms were given a stamp of approval by KPMG, one of the Big Four auditing firms.

Silicon Valley Bank (SVB) failed on Friday and was shut down by regulators. It was the second-largest failure in US history and the first since the global financial crisis. Almost immediately, the calls for bailouts started to come in. (Since Friday, First Republic Bank has failed, and many other banks are facing collapse.)

What a weekend! On Sunday morning Treasury Secretary Janet Yellen told CBS there would be no bailouts. Later that day the Fed declared Quantitative Easing to infinity and beyond.

What’s going on?

For those who have followed the background noise of US activities in the Middle East over the past year, since it was last seriously in the news following the disastrous execution by the Biden administration of the long overdue withdrawal from Afghanistan, they will recall a vague haze of reported drone strikes, arms sales, and Israeli assassinations; more recently, they will recall resistance to attempts to end the U.S. military roles in Syria and Yemen, the death of the Iran nuclear deal, and the blocking of earthquake relief. 

The second-largest collapse of a bank in recent history after Lehman Brothers could have been prevented. Now the impact is too large, and the contagion risk is difficult to measure.

The demise of the Silicon Valley Bank (SVB) is a classic bank run driven by a liquidity event, but the important lesson for everyone is that the enormity of the unrealized losses and the financial hole in the bank’s accounts would not have existed if not for ultra-loose monetary policy. Let me explain why.

Besides using bipartisan comprehensive political reform as a cover for evasion and extortion, the many political abuses of posturing, window dressing, and maneuvering enabled do not exhaust the problems involved. Those problems are, instead, far more comprehensive, especially when it comes to the amount of usable information that is accessible, including accurate information about the true costs of government programs.

Lisa Hanna has indicated her desire to exit the political landscape, but this could turn out to be a major tragedy for Jamaicans. Although her tenure as Culture Minister in the previous PNP (People’s National Party) administration was controversial, Hanna has redeemed herself with a slew of captivating proposals published in Jamaican dailies.

Nomocratic Pluralism: Plural Values, Negative Liberty, and the Rule of Law
by Kenneth B. McIntyre
Palgrave Macmillan, 2021; xii + 214 pp.