Former South Carolina Governor and GOP presidential candidate Nikki Haley resorted to borrowing one of Vermont Senator Bernie Sanders‘ favorite phrases in order to express her outrage over the Silicon Valley Bank implosion — and its aftermath.
Considering the idea of a government “bailout” of the bank and its many tech company customers, Haley tweeted “Bailing out tech companies isn’t capitalism. It’s socialism for the rich.”
Bailing out tech companies isn't capitalism. It's socialism for the rich.— Nikki Haley (@NikkiHaley) March 14, 2023
That “socialism for the rich” phrase describes what Sanders says the American capitalist system has become, with its lavish corporate tax breaks and preferential tax treatment of the one percent, which fortifies its own interests through purchasing outsize political influence. Sanders uses the phrase often.
Haley has tried to carve out a populist path by appealing to working class voters who presumably don’t like bailouts for the rich. The notable difference between Haley and Sanders is that while she says the execution of bailouts “isn’t capitalism,” Sanders thinks it is — and that capitalism needs fixing.
The so-called bailout of SVB, which consists mostly of raising the FDIC insurance limit so that deposits above the $250K level are still covered, isn’t a “bailout” like what happened during the too-big-to-fail 2008 financial crisis. Here, as Mitt Romney said, Silicon Valley Bank “shareholders and executives lose it all, as they should.”
But would Haley protect the small business owners and companies, even if they have tech roots, who were waylaid by bad bets at the bank? Would she make them whole so they could pay their employees and suppliers? The comments on the post indicate that these are some concerns of her potential constituents.
An overly reductive approach to who and how government action helps can hit a populist or middle class worker at risk too. Here’s an example:
I grew up in Carolina public school. Started a co w/ 90% of employees in OH, NC, OR. SVB did a good job supporting small business needs, like payroll processing. We made hard-earned revenue & put it in a checking account. It disappeared. Now thx to @SecYellen we can keep working.— Stephanie Papes Strong (@stephpstrong) March 14, 2023
Entrepreneur Stephanie Papes Strong writes to Haley: “I grew up in Carolina public school. Started a co w/ 90% of employees in OH, NC, OR. SVB did a good job supporting small business needs, like payroll processing. We made hard-earned revenue & put it in a checking account. It disappeared. Now thx to @SecYellen we can keep working.”