Another bank fails, and the anti-regulation apologists are quick to follow. Tech startup darling Silicon Valley Bank’s utter collapse this past week and the U.S. government’s quick bailout was one for the record books, but one Wall Street Journal writer seems to think that SVB was “distracted” by having a board with less than 50% women, a single black person, and another LGBTQ+ person.
In the “Inside View”section of the WSJ, column writer Andy Kessler’s latest article is his usual fare. He blamed bank management instead of relaxed banking regulation for SVB’s quick collapse. He claimed the bank was too willing to take on “excessive debt,” that it didn’t take into account an encroaching bear market, and “not quickly selling enough” to cover losses.
Then toward the end of his thoughts, Kessler just had to sneak in a little bit of anti-woke hysteria to make his case. He cited the bank’s 2022 proxy statement that the board is made up of “45% women” along with “‘1 Black,’ ‘1 LGBTQ+’ and ‘2 Veterans.’” Somehow having 5 people on the board being female, along with a single Black person and another being not-straight, meant the board “may have been distracted by diversity demands.”
Distracted by what, exactly? Were they all too busy showing up with less than the average U.S. demographics to actually remember to cover losses? So somehow, routine diversity and equity initiatives were a part of a bank absolutely screwing over customers, requiring the federal government to conduct yet another big bank bailout?
Looking back, the new board's diversity is barely an improvement over previous years. The 2021 proxy statement noted there were only four women on the board compared to nine men and only two “racially diverse” board members. If Kessler was so quick to point out the number of “diversity” hires, then he was very willing to ignore their qualifications. Two of the most recently-elected board members were Richard Daniels, the chief information officer of health care company Kaiser Permanente, and Alison Davis, a co-founder of tech investment firm Fifth Era. These are not uncommon names to see on the boards of major banking firms, especially those so heavily involved in tech.
Gizmodo reached out to Kessler to see if he had any comment, but we did not immediately hear back.
Other journalists were quick to hone in on just how ridiculous an idea that the woke folks at SVB were so overly focused on diversity they forgot how to bank. TheInformation founder Jessica Lessin, a former Wall Street Journal veteran of eight years, called out her former employer for the absolutely mind-numbingly dumb take.
And Kessler isn’t the only one pushing this narrative. Republican Arizona Rep. Andy Biggs pushed the “woke mind virus” bull in a Monday tweet, saying “[SVB’s] resources should have not been blown on woke/DEI initiatives instead of actual financial management.”
We’ve come to expect this rhetoric from the far right at this point, though of course the Journal is going to make it out to be personal failures rather than institutional issues why such a bank went under. To be clear, it’s not hard to find examples why SVB made the wrong decisions, and when. The speed of Silicon Valley Bank’s sudden decline was on par with recent crypto exchange failures, and it’s emblematic of just how little anyone was really paying attention.
Longtime consumer protection hawk Democratic Sen. Elizabeth Warren wrote in a New York Times piece that SVB CEO Greg Becker was “one of the many high-powered executives” who lobbied to end the Dodd-Frank Act. That law was passed after the 2008 financial crisis to increase transparency at banks. In 2018, Congress voted to roll back parts of Dodd-Frank, leaving just 10 banks subject to strict oversight. Guess what, Silicon Valley Bank was just the 16th largest in the U.S.
Kessler usually has some pretty dry opinions on tech business, at best. Other times, his column reads more like your average tech libertarian offering his best excuse for why we should just let the multi-billion dollar companies complete massive mergers that don’t have any real benefit to consumers because, uhhh, “innovation.” At other times, he’s had some very wrong opinions about climate change.
Everyone agrees something was rotten with SVB, but no, diversity wasn’t a part of it. Everybody loses when nobody’s making sure banks aren’t screwing people over. You now have folks selling SVB swag at insanely inflated prices on eBay, so at least a few folks are making something out of the debacle.