In March, I wrote for the Rogue Review that “anyone who assumes the bank failures of 2023 are over is a fool.”
On Monday, the U.S. experienced its second-largest bank failure of all time (even after adjusting for inflation), making 2023 the runaway historical leader in banks going bust.
There are still 8 months left on the calendar.
First Republic Bank is the latest to go down, taking with it $229 billion in assets, $20 billion more than this year’s prior record (owned by Silicon Valley Bank).
While Washington Mutual (2008) remains the largest bank to fail in U.S. history, the big banks that went down in 2008 only had a combined $370 billion or so in assets. This year’s failures had well over $550 billion.
The only reason the economy hasn’t gone into a 1930s, Great-Depression-style slump is because (1) the government’s Federal Deposit Insurance Corporation (FDIC) was put in place after the Great Depression to bail out account holders when banks fail, (2) Biden unilaterally decided — at the expense of taxpayers — to extend the usual $250,000 per account covered by the FDIC to protect all deposits, including those of the fabulously rich and (3) because Biden’s allies at even bigger banks came to his rescue.
In this case, the (arguably) largest bank in the world, JPMorgan Chase, swooped in and purchased First Republic. JP Morgan’s chief executive, Jamie Dimon, claimed that his company had “step[ed] up” at Biden’s request.
How generous of them. JP Morgan, already worth trillions of dollars (nearly as much, in fact, as the entire annual budget of the United States government), just got significantly more powerful. I’d suggest that they’re angling for a monopoly (or at least a stranglehold on the market), but I can’t afford a lawyer good enough to win if they sue me. Yes, they still have significant competition, but that competition doesn’t differ from them much in terms of the policies or opportunities that matter to the public.
None of that is relevant to Biden or the Democrats. They got to continue America’s managed decline for another day without Americans noticing that everything is melting down around them – and it is. How many more times can the big banks absorb the failures of the little ones?