Economy

Even by the standards of bank runs, the collapse of Silicon Valley Bank was remarkable. In February, Forbes magazine had put it on its Best 100 Banks list. Yet on Thursday, depositors withdrew $48 billion. That’s $14 million a second. Lines formed outside the bank’s various branches, reminiscent of the Great Depression. California banking authorities shut it down and turned it over to the Federal Deposit Insurance Corporation (FDIC) for sale or liquidation. So what happened? Silicon Valley Bank had grown very quickly over the past few years, In early 2020, it had a deposit base of $55 billion. A mere two years later, its deposits had reached $220 billion. But that was more money than it could put into lending to its narrow base.

Cockburn looked on at what he at first took to be a run-of-the-mill sports bar fight at 4:30 in the afternoon — only to realize it was Oklahoma senator Markwayne Mullin throwing down with Teamsters president Sean O’Brien in the hallowed halls of Congress. Mullin, a Republican, came in guns a’blazing to a Senate Health, Education, Labor and Pensions Committee hearing, saying he is “not at all against unions,” before listing the reasons unions are bad. The exchange between Mullin and O’Brien is painful to watch — and the transcript reads pretty much like what you'd expect to hear before a fistfight in a Chili’s parking lot. Cockburn has assembled, for your reading pleasure, a play-by-play highlight reel of the clash...

In the precarious world economy of 2023, everyone is selling you something — and much of that something doesn’t amount to anything. Companies, of course, sell you products and services; much of their junk amounts to solutions for problems that didn’t previously exist, though at least there’s still some sort of deliverable. Meanwhile, in worlds as essential to human flourishing as personal finance and bodily fitness, an ever-expanding class of so-called “influencers” are selling a whole lot of nothing dressed up as something. Their underlying success, ostensibly tied to their ability to help people become richer or fitter, depends in actuality on their ability to sell advice or investment opportunities that are likely only to enrich themselves. How did this happen?

This time last year, football fans dubbed the Super Bowl the "Crypto Bowl," after eToro, Coinbase, Crypto.com and FTX all paid for airtime. Just twelve months on, Mark Evans, the executive vice president of ad sales for Fox Sports, told the Associated Press there would be "zero representation in that category on the day at all," following the disastrous downfall of FTX, In other sporting news, NFL legend Tom Brady has finally retired, which is nice for him. Anyone who took his investment advice won’t be doing that any time soon. The seven-time Super Bowl champion is currently named in a class action lawsuit that claims he and his now-ex Gisele Bundchen lured fans into a massive fraud.

Amid the much-anticipated debt ceiling imbroglio, it’s become clear that our national debt can't keep growing like this. To tackle this issue, we need to start by admitting the problem: about 70 percent of federal spending is mandatory, meaning it grows automatically without congressional input. Unfortunately, most of this is Social Security, Medicare, Medicaid, and other politically popular entitlement programs. Cutting the benefits these programs dole out is a political third rail most self-interested political actors won’t dare to touch. Luckily, we don't need to eliminate these programs. What entitlement reform supporters want is to secure these programs’ solvency and make sure they’re there for future generations.

Larry Fink is unhappy. The grand panjandrum of BlackRock, the world’s largest and most odoriferously PC pile of pelf, can’t understand why the Lilliputians of the world are singling him out for abuse. Having jetted in on his private plane to the World Economic Forum (WEF) at Davos in order to join the squads of beautiful people warning about the environmental dangers of gas stoves, the moral virtue of eating bugs not meat, and the need to “recalibrate” our understanding of free speech, the poor little rich boy is pouting because people are waking up to the totalitarian reality of what the WEF stands for. What is that reality?

In the wake of the Black Lives Matter protests in 2020, chief diversity officer hires tripled among the largest publicly traded companies. American companies paid an estimated $3.4 billion to firms for diversity, equity and inclusion, or DEI, programs, according to Princeton professor Betsy Levy Paluck in an op-ed at the Washington Post. And yet, moans Paluck, there is practically no research evaluating the results of these DEI initiatives.

The number of CEOs leaving US companies surged in November, according to a new report. There were almost 100 exits for the month, roughly twenty more than were reported in October. The report, from global outplacement firm Challenger, Gray, & Christmas, Inc., shows that these exits were not replacements or instances of “stepping down” to pursue other opportunities, either. For thirty-seven of the executives, retirement was the primary reason for leaving, the most retirements in a single month since January 2020. The larger trend of CEO exits may have some staying power, too. Andrew Challenger, the firm's senior vice president, predicts, “We may begin to see large numbers of CEO changes as we enter 2023 amid an economic downturn.

Sam Bankman-Fried may have been arrested, but he's not the only one with questions to answer following the FTX implosion. ProPublica, the nonprofit investigative news outlet, has finally claimed in an internal email that it will return the $1.6 million it received from Bankman-Fried's family foundation, according to Axios. In a memo, ProPublica president and co-CEO Robin Sparkman and editor-in-chief and co-CEO Stephen Engelberg said the company will be returning the money from Bankman-Fried’s family foundation, called Building a Stronger Future, because "it does not seem appropriate to keep these funds." Go figure.

In 1889, Andrew Carnegie, one of the most ruthless industrialists in American history, wrote an essay entitled “The Gospel of Wealth,” which became the moral playbook for the oligarchs of his time on what to do with their fortunes. Carnegie was determined to overcome his reputation as a “robber baron” by becoming one of the greatest philanthropists who ever lived. The “man of wealth,” Carnegie wrote, should “consider all surplus revenues which come to him simply as trust funds, which he is called upon to administer... in the manner which, in his judgment, is best calculated to produce the most beneficial results for the community.

On January 4, Justin Smith announced that he was stepping down as CEO of Bloomberg Media to found a startup. He would pursue a “new kind of global news media company,” one that would serve “unbiased journalism to a truly global audience.” Ben Smith, the New York Times media columnist, resigned on the same day. The two Smiths were joining together to work on what was known at the time only as “Project Coda.” In the flurry of press coverage that followed, some hubristic claims were bandied about. The era of the foreign correspondent was over, Justin insisted. Throughout the world, there were 200 million college-educated, English-speaking professionals who were underserved by current news media, Ben maintained.

If you’re the sort who rarely checks your 401K and other investment accounts, you may be blissfully unaware of what a dismal year (plus) its been for the stock market. Many prominent media personalities, particularly ones on CNBC, promised us that Biden would be a boon to the stock market because Trump was too erratic. But while the market started hot in 2021, it's mostly been ice cold ever since, with a few fake rallies thrown in to tease us. How bad has the Biden era been for stocks? Consider some numbers I crunched prior to the market opening on December 12.

The New York Times Guild announced on Friday that about 1,000 of its members would walk out if their demands regarding raises and pensions, among other issues, were not addressed by December 8, this coming Thursday. And Nikole Hannah-Jones, the 1619 Project essayist, has since announced her intention to join the walkout. Do you hear the people sing? Singing a song of angry men?... Cockburn is somewhat perplexed, because to participate in a walkout, you would presumably have to be an active employee doing some form of work for the New York Times. Hannah-Jones tweeted on December 3 that, “I will be joining my NYTimesGuild colleagues in walking out if [the New York Times] doesn’t agree to a fair contract by December 8.

Twitter Ratio King Chris Cillizza joined his friends Chris Cuomo, Brian Stelter and former boss Jeff Zucker in the long line of dismissed CNN employees on Thursday. While Cillizza may still offer up heaped dishes of bad takes on social media, he will no longer be doing so under the banner of the supposed new direction of CNN under CEO Chris Licht. What exactly do people like me mean when we call Cillizza the "Ratio King”? The ratio is what happens on Twitter when the number of comments on a tweet vastly outweighs its likes, retweets and quote tweets, meaning people are criticizing the tweet far more than endorsing it. And Cillizza, who may have accidentally even given birth to this unit of measurement, has owned the mantle for years now.

Election aftermaths are always an opportunity for taking stock. Since the 2022 midterms, we’ve heard prominent Republicans stressing the need to revisit questions ranging from electoral strategy to how to engage the culture wars. What desperately needs discussion on the American right, however, is conservatism’s approach to economic policy. Since 2015, American conservatives have been deeply divided over economics. Conservative skepticism about markets predates Donald Trump, but there’s little question that Trump shattered the favorable views of free markets that had prevailed since Ronald Reagan’s presidency.

When the media gives coverage to Barstool Sports founder Dave Portnoy, it’s generally unfavorable. Business Insider attempted to smear "El Presidente" over his sexual predilections, then he brought the receipts. The New York Times outed him as being who he says he is — a degenerate sports gambler — only to reap the same results. What gets much less coverage is Portnoy’s love for America, American workers and American businesses. During the pandemic, when he used his stature to keep multiple small businesses afloat via the Barstool Fund, there were no glossy covers, despite the fund raising almost $42 million and supporting 443 businesses. In the mainstream press, only Fox News took note.

When the Wall Street Journal reported on November 21 that OPEC, the oil cartel dominated by Saudi Arabia, was planning to increase production by 500,000 barrels per day in December, the crude market immediately reacted. Oil prices plunged by 6 percent, bringing the Brent benchmark close to $80 a barrel. Saudi energy minister Prince Abdulaziz bin Salman, the older brother of king-in-waiting Mohammed bin Salman, immediately went to work disputing the report. No decisions at OPEC had been made, he said, and it was possible the cartel could even proceed with further production cuts if needed to maintain balance in the market (for the Saudis, "balance" is usually defined as padding the kingdom’s balance sheet). Abdulaziz’s intervention helped make up most of those earlier losses.

The Great Resignation continues, with a new study revealing that employees in many industries are quitting at higher rates than 2021. Accommodation and food services lost 5.8 percent of its workforce — 773,600 workers — in 2022, an increase of about 128,000 over the same period in 2021. Retail lost 3.82 percent, or about 600,000 workers, though this is 109,000 fewer than the same period in 2021. In third is the entertainment sector at 3.58 percent, accounting for 82,200 jobs, rising 7,000 compared to 2021. These industries happen to be where employees are in closest contact with customers — which would probably cause Cockburn to quit too, given how rude folks can be. Manufacturing and mining, by contrast, saw 2.42 and 2.3 percent respectively.