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Brownstone Institute

Where Is Occupy Silicon Valley?

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From the Brownstone Institute

BY Craig PirrongCRAIG PIRRONG

Bank failures tend to come in waves, and we are experiencing at least a mini-wave now.

Banks fail for three basic reasons: 1. Credit transformation: deterioration in borrower creditworthiness, usually due to an adverse economic shock (e.g., a real estate bust). 2. Maturity transformation: borrowing short, lending long, and then getting hammered when interest rates rise. 3. Liquidity transformation combined with an exogenous liquidity shock, a la Diamond-Dybvig, where idiosyncratic depositor needs for cash lead to withdrawals that exceed liquid assets and therefore trigger fire sales of illiquid assets.

The two most notable failures of late–Silicon Valley Bank and Silvergate–are examples of 2 and 3 respectively.

In some respects, SVB is the most astounding. Not because a bank failed in the old-fashioned way, but because it was funded primarily by the deposits of supposed financial sophisticates–and because of the disgusting policy response of the Treasury and the Fed.

SVB took in oodles of cash, especially in the past couple of years. The cashcade was so immense that SVB could not find enough traditional banking business (loans) to soak it up, so they bought lots of Treasuries. And long duration Treasuries to boot.

And then Powell and the Fed applied the boot, jacking up rates. Bonds have cratered in the last year, and took SVB’s balance sheet with it.

Again, an old story. And hardly a harbinger of systemic risk–unless such reckless maturity mismatches are systemic.

SVB was the Banker to the Silicon Valley Stars, notably VCs and tech firms. These firms are the ones that deposited immense sums in exchange for a pittance of return. Case in point, Roku, put almost $500 million–yes, you read that right, 9 figures led with a 5–into SVB!!!

I mean: what the eff? Was the Treasurer a moron? For who other than a moron would hold that much in cash in a single institution? (Roku claims its devices “make your home a smarter.” Maybe they should have hired a smarter treasurer and CFO, or replaced them with one of its devices). Hell, why is a company holding that much in cash period?

A few of these alleged masters of the universe (like Palantir) saw the writing on the wall and yanked their deposits: deposits fell by a quarter on Friday alone, sealing the bank’s doom. Those who were slow to run howled to the high heavens over the weekend that if there was not a bailout there would be a holocaust in the tech sector.

Even though the systemic risk posed by SVB’s failure is nil (or if not, then every bank is systemically important), the Treasury Department and the Fed responded to these howls and guaranteed all the deposits–even though the FDIC’s formal deposit insurance limit is $250,000. You know, .05 percent of Roku’s deposit.

When evaluating this, one cannot ignore the reality that the Democratic Party is completely beholden to Silicon Valley. This is beyond scandalous.

Occupy Silicon Valley, anyone?

Treasury Secretary Janet Yellen insulted our intelligence by assuring us this is not a bailout. Well, it’s not a taxpayer bailout, strictly speaking, because the Treasury is not providing the backstop. Instead, it is being funded by a “special assessment” on solvent banks. Which are owned and funded by people who also pay taxes. And such an “assessment” is a tax in everything but name–because it is a contribution by private entities compelled by the government.

The policy implications of this are disastrous. The whole problem with such bailouts is moral hazard. What is to stop banks from engaging in such reckless behavior as SVB did if they can obtain seemingly unlimited funding from those who know that they will be bailed out if things go pear-shaped?

And the regulatory failure here demonstrates that bank regulation–despite the supposed “reforms” of Frankendodd–can’t even catch or constrain the oldest bet-the-bank strategy in the book. Free banking–no deposit insurance, no bailing out of depositors–couldn’t do worse, and would likely do better.

No, the failure of SVB is not the scandal here. The scandal is the political response to it. This reveals yet again how captured the government is. This time not by Wall Street, but by tech companies and oligarchs that are currently the primary source of Democratic political funding.

A couple of weeks ago the Silvergate story looked juicy, but SVB has put it in the shade. Silvergate also grew dramatically, but on the back of crypto rather than SV tech. It became the main banker for many crypto firms and entrepreneurs. The crypto meltdown did not affect Silvergate directly, but it did crush its depositors, the aforesaid crypto firms and entrepreneurs. They withdrew a lot of funding, and an old-fashioned liquidity mismatch did it in.

In traditional banks, deposit funding is “sticky.” Banks that rely on wholesale funding (“hot money”) are more vulnerable to runs. Silvergate’s funding was not traditional sticky deposit funding, nor was it hot money per se. It was money that was pretty cool as long as crypto was cool, and became hot once crypto melted down.

A run started, but the run was precipitated by a liquidity shock. Simple story, really.

Silvergate’s failure was not a scandal. SVB’s failure per se was not a scandal (except to the extent that our vaunted banking regulators failed to prevent the most prosaic type of failure).

Again–the scandal is the politically tainted response that will have baleful consequences in the future, as the response virtually guarantees that there will be more SVBs in the future.

Author

  • Craig Pirrong

    Dr Pirrong is Professor of Finance, and Energy Markets Director for the Global Energy Management Institute at the Bauer College of Business of the University of Houston. He was previously Watson Family Professor of Commodity and Financial Risk Management at Oklahoma State University, and a faculty member at the University of Michigan, the University of Chicago, and Washington University.

After 15 years as a TV reporter with Global and CBC and as news director of RDTV in Red Deer, Duane set out on his own 2008 as a visual storyteller. During this period, he became fascinated with a burgeoning online world and how it could better serve local communities. This fascination led to Todayville, launched in 2016.

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Brownstone Institute

Is the Overton Window Real, Imagined, or Constructed?

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From the Brownstone Institute

BY Jeffrey A. TuckerJEFFREY A. TUCKER 

Ideas move from Unthinkable to Radical to Acceptable to Sensible to Popular to become Policy.

The concept of the Overton window caught on in professional culture, particularly those seeking to nudge public opinion, because it taps into a certain sense that we all know is there. There are things you can say and things you cannot say, not because there are speech controls (though there are) but because holding certain views makes you anathema and dismissable. This leads to less influence and effectiveness.

The Overton window is a way of mapping sayable opinions. The goal of advocacy is to stay within the window while moving it just ever so much. For example, if you are writing about monetary policy, you should say that the Fed should not immediately reduce rates for fear of igniting inflation. You can really think that the Fed should be abolished but saying that is inconsistent with the demands of polite society.

That’s only one example of a million.

To notice and comply with the Overton window is not the same as merely favoring incremental change over dramatic reform. There is not and should never be an issue with marginal change. That’s not what is at stake.

To be aware of the Overton window, and fit within it, means to curate your own advocacy. You should do so in a way that is designed to comply with a structure of opinion that is pre-existing as a kind of template we are all given. It means to craft a strategy specifically designed to game the system, which is said to operate according to acceptable and unacceptable opinionizing.

In every area of social, economic, and political life, we find a form of compliance with strategic considerations seemingly dictated by this Window. There is no sense in spouting off opinions that offend or trigger people because they will just dismiss you as not credible. But if you keep your eye on the Window – as if you can know it, see it, manage it – you might succeed in expanding it a bit here and there and thereby achieve your goals eventually.

The mission here is always to let considerations of strategy run alongside – perhaps even ultimately prevail in the short run – over issues of principle and truth, all in the interest of being not merely right but also effective. Everyone in the business of affecting public opinion does this, all in compliance with the perception of the existence of this Window.

Tellingly, the whole idea grows out of think tank culture, which puts a premium on effectiveness and metrics as a means of institutional funding. The concept was named for Joseph Overton, who worked at the Mackinac Center for Public Policy in Michigan. He found that it was useless in his work to advocate for positions that he could not recruit politicians to say from the legislative floor or on the campaign trail. By crafting policy ideas that fit within the prevailing media and political culture, however, he saw some successes about which he and his team could brag to the donor base.

This experience led him to a more general theory that was later codified by his colleague Joseph Lehman, and then elaborated upon by Joshua Treviño, who postulated degrees of acceptability. Ideas move from Unthinkable to Radical to Acceptable to Sensible to Popular to become Policy. A wise intellectual shepherd will manage this transition carefully from one stage to the next until victory and then take on a new issue.

The core intuition here is rather obvious. It probably achieves little in life to go around screaming some radical slogan about what all politicians should do if there is no practical means to achieve it and zero chance of it happening. But writing well-thought-out position papers with citations backed by large books by Ivy League authors and pushing for changes on the margin that keep politicians out of trouble with the media might move the Window slightly and eventually enough to make a difference.

Beyond that example, which surely does tap into some evidence in this or that case, how true is this analysis?

First, the theory of the Overton window presumes a smooth connection between public opinion and political outcomes. During most of my life, that seemed to be the case or, at least, we imagined it to be the case. Today this is gravely in question. Politicians do things daily and hourly that are opposed by their constituents – fund foreign aid and wars for example – but they do it anyway due to well-organized pressure groups that operate outside public awareness. That’s true many times over with the administrative and deep layers of the state.

In most countries, states and elites that run them operate without the consent of the governed. No one likes the surveillance and censorial state but they are growing regardless, and nothing about shifts in public opinion seem to make any difference. It’s surely true that there comes a point when state managers pull back on their schemes for fear of public backlash but when that happens or where, or when and how, wholly depends on the circumstances of time and place.

Second, the Overton window presumes there is something organic about the way the Window is shaped and moves. That is probably not entirely true either. Revelations of our own time show just how involved are major state actors in media and tech, even to the point of dictating the structure and parameters of opinions held in the public, all in the interest of controlling the culture of belief in the population.

I had read Manufacturing Consent (Noam Chomsky and Edward Herman; full text here) when it came out in 1988 and found it compelling. It was entirely believable that deep ruling class interests were more involved than we know about what we are supposed to think about foreign-policy matters and national emergencies, and, further, entirely plausible that major media outlets would reflect these views as a matter of seeking to fit in and ride the wave of change.

What I had not understood was just how far-reaching this effort to manufacture consent is in real life. What illustrates this perfectly has been media and censorship over the pandemic years in which nearly all official channels of opinion have very strictly reflected and enforced the cranky views of a tiny elite. Honestly, how many actual people in the US were behind the lockdowns policy in terms of theory and action? Probably fewer than 1,000. Probably closer to 100.

But thanks to the work of the Censorship Industrial Complex, an industry built of dozens of agencies and thousands of third-party cutouts including universities, we were led to believe that lockdowns and closures were just the way things are done. Vast amounts of the propaganda we endured was top down and wholly manufactured.

Third, the lockdown experience demonstrates that there is nothing necessarily slow and evolutionary about the movement of the Window. In February 2020, mainstream public health was warning against travel restrictions, quarantines, business closures, and the stigmatization of the sick. A mere 30 days later, all these policies became acceptable and even mandatory belief. Not even Orwell imagined such a dramatic and sudden shift was possible!

The Window didn’t just move. It dramatically shifted from one side of the room to the other, with all the top players against saying the right thing at the right time, and then finding themselves in the awkward position of having to publicly contradict what they had said only weeks earlier. The excuse was that “the science changed” but that is completely untrue and an obvious cover for what was really just a craven attempt to chase what the powerful were saying and doing.

It was the same with the vaccine, which major media voices opposed so long as Trump was president and then favored once the election was declared for Biden. Are we really supposed to believe that this massive switch came about because of some mystical window shift or does the change have a more direct explanation?

Fourth, the entire model is wildly presumptuous. It is built by intuition, not data, of course. And it presumes that we can know the parameters of its existence and manage how it is gradually manipulated over time. None of this is true. In the end, an agenda based on acting on this supposed Window involves deferring to the intuitions of some manager who decides that this or that statement or agenda is “good optics” or “bad optics,” to deploy the fashionable language of our time.

The right response to all such claims is: you don’t know that. You are only pretending to know but you don’t actually know. What your seemingly perfect discernment of strategy is really about concerns your own personal taste for the fight, for controversy, for argument, and your willingness to stand up publicly for a principle you believe will very likely run counter to elite priorities. That’s perfectly fine, but don’t mask your taste for public engagement in the garb of fake management theory.

It’s precisely for this reason that so many intellectuals and institutions stayed completely silent during lockdowns when everyone was being treated so brutally by public health. Many people knew the truth – that everyone would get this bug, most would shake it off just fine, and then it would become endemic – but were simply afraid to say it. Cite the Overton window all you want but what is really at issue is one’s willingness to exercise moral courage.

The relationship between public opinion, cultural feeling, and state policy has always been complex, opaque, and beyond the capacity of empirical methods to model. It’s for this reason that there is such a vast literature on social change.

We live in times in which most of what we thought we knew about the strategies for social and political change have been blown up. That’s simply because the normal world we knew only five years ago – or thought we knew – no longer exists. Everything is broken, including whatever imaginings we had about the existence of this Overton window.

What to do about it? I would suggest a simple answer. Forget the model, which might be completely misconstrued in any case. Just say what is true, with sincerity, without malice, without convoluted hopes of manipulating others. It’s a time for truth, which earns trust. Only that will blow the window wide open and finally demolish it forever.

Author

  • Jeffrey A. Tucker

    Jeffrey Tucker is Founder, Author, and President at Brownstone Institute. He is also Senior Economics Columnist for Epoch Times, author of 10 books, including Life After Lockdown, and many thousands of articles in the scholarly and popular press. He speaks widely on topics of economics, technology, social philosophy, and culture.

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Brownstone Institute

The Teams Are Set for World War III

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From the Brownstone Institute

BY Toby RogersTOBY ROGERS

I’ve seen some crazy things over the last few years but this is off-the-charts insane.

Last week, Michael E. Mann spoke at the EcoHeath Alliance: Green Planet One Health Benefit 2024. Just to recap who each of these players are:

  • Michael E. Mann is the creator of the “hockey stick graph” that has driven the global warming debate for the last 25 years.
  • EcoHealth Alliance is the CIA cutout led by Peter Daszak that launders money from the NIH to the Wuhan Institute of Virology to create gain-of-function viruses (including SARS-CoV-2 which killed over 7 million people).
  • “One Health” is the pretext the World Health Organization (WHO) is using to drive the Pandemic Treaty that will vastly expand the powers of the WHO and create economic incentives for every nation on earth to develop new gain-of-function viruses.

So a leader in the global warming movement spoke at an event to raise money for the organization that just murdered 7 million people and the campaign that intends to launch new pandemics in perpetuity to enrich the biowarfare industrial complex.

And then just for good measure, Peter Hotez reposted all of this information on Twitter, I imagine in solidarity with all of the exciting genociding going on.

Mann’s appearance at this event is emblematic of a disturbing shift that has been years in the making. Serious and thoughtful people in the environmental movement tried to address industrial and military pollution for decades. Now their cause has been co-opted by Big Tech and other corporate actors with malevolent intentions — and the rest of the environmental movement has gone along with this, apparently without objection. So we are witnessing a convergence between the global warming movement, the biowarfare industrial complex, and the WHO pandemic treaty grifters.

I wish it wasn’t true but here we are.

Before I go any further I need to make one thing clear: the notion that pandemics are driven by global warming is complete and total bullsh*t. The evidence is overwhelming that pandemics are created by the biowarfare industrial complex including the 13,000 psychopaths who work at over 400 US bioweapons labs (as described in great detail in The Wuhan Cover-Up).

Unfortunately “global warming” has become a cover for the proliferation of the biowarfare industrial economy.

Mann’s appearance at an event to raise money for people who are clearly guilty of genocide (and planning more carnage) made me realize that this really is World War III. They are straight-up telling us who they are and what they intend to do.

The different sides in this war are not nation-states. Instead, Team Tyranny is a bunch of different business interests pushing what has become a giant multi-trillion dollar grift. And Team Freedom is ordinary people throughout the world just trying to return to the classical economic and political liberalism that drove human progress from 1776 until 2020.

Here’s how I see the battle lines being drawn:


TEAM TYRANNY

Their base: Elites, billionaires, the ruling class, the biowarfare industrial complex, intelligence agencies, and bougie technocrats.

Institutions they control: WEF, WHO, UN, BMGF, World Bank, IMF, most universities, the mainstream media, and liberal governments throughout the developed world.

Economic philosophy: The billionaires should control all wealth on earth. The peasants should only be allowed to exist to serve the billionaires, grow food, and fix the machines when necessary. Robots and Artificial Intelligence will soon be able to replace most of the peasants.

Political philosophy: Centralized control of everything. Elites know best. The 90% should shut up, pay their taxes, take their vaccines, develop chronic disease, and die. High tech global totalitarianism is the best form of government. Billionaires are God.

Philosophy of medicine: Allopathic. Cut, poison, burn, kill. Corporations create all knowledge. Bodies are machines. Transhumanism is ideal. The billionaires will soon live forever in the digital cloud.

Their currency: For now, inflationary Federal Reserve policies. Soon, Central Bank Digital Currency (CBDC) that will put the peasants in their place once and for all.

Policy vehicles to advance their agenda: One Health; WHO Pandemic Treaty; social credit scores; climate scores; vaccine mandates/passports; lockdowns and quarantine camps; elimination of small farms and livestock; corporate control of all food, land, water, transportation, and the weather; corporate control of social movements; and 15-minute cities for the peasants.

Military strategy: Gain-of-function viruses, propaganda, and vaccines.


TEAM FREEDOM

Our base: The medical freedom movement, Constitutionalists, small “l” libertarians, independent farmers, natural meat and milk producers, pirate parties, natural healers, homeopaths, chiropractors, integrative and functional medicine doctors, and osteopaths.

Aligned institutions: CHD, ICAN, Brownstone Institute, NVIC, SFHF, the RFK, Jr. campaign, the Republican party at the county level…

Economic philosophy: Small “c” capitalism. Competition. Entrepreneurship.

Political philosophy: Classical liberalism. The people, using their own ingenuity, will generally figure out the best way to do things. Decentralize everything including the internet. If the elites would just leave us alone the world would be a much more peaceful, creative, and prosperous place. Human freedom leads to human flourishing.

Philosophy of medicine: Nature is infinite in its wisdom. Listen to the body. Systems have the ability to heal and regenerate.

Our currency: Cash, gold, crypto, and barter. (I don’t love crypto but lots of smart people in our movement do.)

Policy ideas: Exit the WHO. Boycott WEF companies. Repeal the Bayh-Dole Act, NCVIA Act, Patriot Act, and PREP Act. Add medical freedom to the Constitution. Prosecute the Faucistas at Nuremberg 2.0. Overhaul the NIH, FDA, CDC, EPA, USDA, FCC, DoD, and intelligence agencies. Make all publicly-funded scientific data available to the public. Ban insider trading by Congress. Support and protect organic food, farms, and farmers’ markets. Break up monopolies. Cut the size of the federal government in half (or more).

Our preferred tools to create change: Ideas, love for humanity, logic and reason, common sense, art and music, and popular uprising.

What would you add, subtract, or change in each of these lists?

Republished from the author’s Substack

Author

  • Toby Rogers

    Toby Rogers has a Ph.D. in political economy from the University of Sydney in Australia and a Master of Public Policy degree from the University of California, Berkeley. His research focus is on regulatory capture and corruption in the pharmaceutical industry. Dr. Rogers does grassroots political organizing with medical freedom groups across the country working to stop the epidemic of chronic illness in children. He writes about the political economy of public health on Substack.

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