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Critics blame Biden spending spree for banking collapses as White House shirks responsibility

The root cause of the "underlying instability across our economy," said Rep. Bryan Steil, is "roaring inflation, and who's the culprit of roaring inflation? It was one-party, Democratic control that spent like drunken sailors."

Published: March 14, 2023 1:58pm

Updated: March 14, 2023 11:03pm

Following the failures of Silicon Valley Bank and Signature Bank, the White House is facing increased calls to accept its share of the blame by critics who cite the Biden administration's high spending and staunch support of an environmental, social and governance (ESG) agenda. 

Both banks were criticized for heavily investing in social justice-driven projects, green energy companies, and making hires based on "diversity" instead of merit. 

Government spending also played a large part in the mayhem, House Financial Services Committee member Rep. Bryan Steil (R-Wisc.) told Just the News Tuesday. 

"Sure, we had bad management of banks, we had a handful of other things — all of that needs to be investigated," Steil acknowledged in an interview on the John Solomon Reports podcast. "But if we step back and look and say, 'What's causing this underlying instability across our economy?' — it's roaring inflation, and who's the culprit of roaring inflation? It was one-party, Democratic control that spent like drunken sailors.

"It's mismatched energy policy, where the Biden administration wants to have a war on energy. And his labor policies allow far too many people to find themselves on the sidelines" instead of going back to work.

The remedy, Steil argues, is bringing "reckless spending" under control and discontinuing the government's war on fossil fuels and the American energy sector. 

"This is the challenge in front of us, is forcing the president to come to the table," he said. "In particular, during the period of time of the debt ceiling debate, to actually put the policies in place to slow inflation. Because at the end of the day, that's the cause of the economic instability. And that's the cause of the pain of so many families across our country." 

America First Policy Institute's Mike Faulkender also sees runaway federal spending and inflation as the root cause of the recent string of bank failures.

"When Biden came into office and carried out the massive amount of spending with the American Rescue Plan, we saw inflation start to take off in March of 2021 ... it hit more than 9% inflation last year," he noted. "And the result of that is that the Fed has had to aggressively raise interest rates."

When interest rates are aggressively hiked due to inflation, massive losses occur, and assets become devalued, Faulkender explained.

"They didn't have enough capital to absorb those losses, which meant if the federal government did not step in, it meant that depositors were going to start taking losses," he said Tuesday in a podcast interview on John Solomon Reports. "That's why those banks failed. It really is just a complete failure of both bank management but also regulator management. The idea that the regulators were not monitoring the interest rate exposure of the banks that they regulate, really is an entire indictment of the whole Dodd Frank regulatory regime." 

Former Treasury Department official Monica Crowley weighed in on the bank collapses in an interview with the John Solomon Reports podcast on Monday, attributing the crisis to Washington's failure to bring spending back down within a normal range with the waning of the pandemic

"Biden and the Democrats came in and continued to spend at emergency levels, absent the actual emergency," she said. "So over the last three years, Biden and the Democrats have pumped down into the system well over $10 trillion. That's with a 't' — $10 trillion ... Obviously, over the last a year and a half, we've had massive inflation as a result of all of this money sloshing around the system."

Crowley claimed the banks and federal government are doing all they can "to cover their tracks for their own wrongdoing." 

Biden and other prominent Democrats like Sen. Elizabeth Warren (D-Mass.) have already tried to blame the bank failures on the Trump administration, citing legislation he signed in 2018 — even though the measure passed with the help of significant support from Democrats in both the House and Senate.

The White House did not respond to a request for comment from Just The News. 

You can follow Nick on Twitter @NGivasDC

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