USA TODAY International Edition
Some Republicans blame bank failure on ‘ wokeness’
Republicans are blaming the nation’s second- largest bank failure on corporate “wokeness,” not lax regulation, illfated business decisions or panicked customers rushing to pull out their money.
House Oversight Committee chairman and Kentucky Republican James Comer called Silicon Valley Bank “one of the most woke banks in their quest for the ESG- type policy and investing.”
“SVB is what happens when you push a leftist/ woke ideology and have that take precedent over common sense business practices,” Donald Trump Jr. tweeted.
There is no consensus among conservatives on what the GOP means by “woke” but it’s used as a catch- all term for identity and other liberal politics, including diversity, equity and inclusion initiatives in the corporate sector.
GOP blames bank failure on ‘ woke’ diversity efforts
Turning Point USA founder and farright conservative Charlie Kirk suggested the bank’s inability to meet the sudden surge in withdrawals was directly tied to these initiatives.
“It is a mystery why Silicon Valley Bank collapsed,” Kirk tweeted Friday with a screenshot of the bank’s diversity, equity and inclusion statement.
Wall Street Journal opinion columnist Andy Kessler speculated that one reason for the Silicon Valley Bank’s demise was its diverse board which was nearly half women and had one Black member, one LGBTQ member and two veterans.
“I’m not saying 12 white men would have avoided this mess,” Kessler wrote, “but the company may have been distracted by diversity demands.”
Home Depot co- founder Bernie Marcus told Fox News: “These banks are badly run because everybody is focused on diversity and all of the ‘ woke’ issues.”
Corporate diversity programs under fire
Corporate diversity programs increasingly are a target in the run- up to the 2024 presidential election.
Biden reversed a Trump- era diversity training ban that restricted the federal government and its contractors from using a curriculum that taught about systemic racism, part of a GOP push to control how issues of race and identity are taught in corporations.
Florida Gov. Ron DeSantis championed a new state law restricting how race is discussed in the workplace, banning training that makes employees feel discomfort or distress by suggesting that they are responsible for actions “committed in the past by other members of the same race, color, sex or national origin.”
Why Republicans are targeting Silicon Valley Bank
Waging war against “corporate wokeness,” from critical race theory to environmental, social and governance principles has helped DeSantis, a likely GOP presidential contender, build a national following.
“I mean, this bank, they’re so concerned with DEI and politics and all kinds of stuff,” DeSantis told Fox News. “That really diverted from them focusing on their core mission.”
Despite traditional alliances between the GOP and big business, the GOP has a turbulent relationship with the banking and tech industries.
It doesn’t help that Silicon Valley Bank – whose name refers to both – is a regional player in a heavily Democratic area that caters almost exclusively to wealthy venture capital and private equity firms and the startups they back.
Bailout is new line of GOP attack
The bailout of Silicon Valley Bank has become the new focus of the partisan attacks.
“These SVB guys spend all their time funding woke garbage (‘ climate change solutions’) rather than actual banking and now want a handout from taxpayers to save them,” Missouri Sen. Josh Hawley tweeted.
Republican presidential hopeful and “Woke Inc.” author Vivek Ramaswamy told USA TODAY “wokeness” helped secure the government bailout.
“The real role it played was in winning the bailout in the end,” he said. “If this were a midsize, no- name bank for oil companies in Oklahoma, the uninsured depositors wouldn’t have gotten bailed out. But SVB – and Silicon Valley in general – is an ESG darling.”
“The FDIC will bail out Silicon Valley billionaires, forcing community bankers in Kansas to pay for the abysmal failures of a woke California bank,” U. S. Sen. Roger Marshall, R- Kan., tweeted.
Democrats say ‘ woke’ didn’t cause Silicon Valley Bank collapse
Democrats scoffed at the idea that Silicon Valley Bank succumbed to corporate “wokeness.”
“The main problem in the banking system is wokism and ESG and DEI and no I do not know what those words mean but I’m a very serious financial person,” Sen. Brian Schatz of Hawaii tweeted sarcastically.
“Count me in for all the ‘ woke means everything I don’t like or understand,’ content,” tweeted Sen. Chris Murphy of Connecticut. “Woke! It’s all woke!!”
Environmental, social and governance principles had nothing to do with the bank’s failure, according to Lindsay Singleton, chief development officer of public affairs firm Rokk Solutions.
“Blaming the opposing political party will almost certainly win more votes than blaming a misunderstood investment framework,” Singleton said.
William Crittenden, associate professor of finance at Texas State University, says Silicon Valley Bank did a poor job of managing its interest rate risk which gave rise to its liquidity issues and a deposit run.
Silicon Valley Bank was one of the first banks to have a clean energy sustainable finance department. Last year it pledged to make $ 5 billion in loans to technology companies trying to combat climate change by 2027. But Crittenden said the lender hadn’t had a chance to make those loans yet.
“The failure had nothing to do with the quality of any ‘ woke’ bank loans,” Crittenden said.