The awakening has replaced competence and merit in the banking sector, and the head of the San Francisco Fed, Mary Daly, exemplifies this pernicious trend.
A protégé of Treasury Secretary Janet Yellen and a candidate for Federal Reserve Vice Chair, Daly was supposed to run a Silicon Valley bank but was apparently too busy politicizing and pushing through plans to regulate fraudulent banks like SVB, the second-biggest bank. denial of entry.
Daly had other priorities, including climate change, George Floyd and Black Lives Matter, black-white inequality, LGBTQ+ rights, and a host of other social justice issues that had nothing to do with banking and finance.
Daly’s Fed biography says she is committed to “understanding the economic and financial risks of climate change and inequality.” Not to mention the greater threat to the existence of banks in its jurisdiction accumulating mortgage bonds with longer maturities, exposing investors to greater interest rate risk.
In a recent LinkedIn post, Daley appeared to digress from racial justice, writing: “What black voices have I raised? Fairness and inclusion start with me. #GeorgeFloyd. She also posted selfies with local Black Lives Matter activists.
Daly, meanwhile, missed all the warning signs of runaway inflation, which sent interest rates skyrocketing, rendering SVB investments worthless.
In 2021, she said: “I don’t think we have unwanted inflation around the corner. I don’t think it’s a risk.”
What’s more, Daly denied early last year that the economy was suffering from painful inflation: “I don’t see it.” She also saw no need to raise interest rates.
Then in August she said that inflation hadn’t affected her personally, so what’s the big deal? “I no longer feel the pain of inflation,” Daley told Reuters.
“I am not immune from rising gas and food prices,” she added. “But I’m not in a space where I have to make compromises because I have enough, and many, many Americans have enough.”
It’s easy for her to say: she makes over $422,000 a year.
From her policy papers, speeches, and interviews, it’s clear that Daley believes the Fed’s primary mission is not to control inflation, but to achieve full employment, and raising interest rates only harms that goal. Her agenda is more jobs and higher wages for minorities, so safe money is not a priority for her – even though inflation is a huge tax on the working class and especially minorities.
Until recently, Daley was opposed to the Fed’s hawkish approach to tightening credit to fight inflation. Her bank inspectors no doubt shared her dovish mindset and weren’t expecting a rate hike, which could also explain why the SVB didn’t raise the alarm.
Daly has no experience in banking or risk management. After dropping out of high school, she worked in a donut shop before eventually getting her GED and attending college, where she fell in love with a socialist professor.
She said she was inspired by the Marxist economist Gene Wagner, who “mentored me all my life”.
A few years later, after earning her PhD from Syracuse University, Daly took a job as a labor inequality researcher at the San Francisco Fed, where she ingratiated herself with then-San Francisco Fed President Janet Yellen, who helped her fail.
Daly called Yellen “an important mentor in my life. . . [S]he made my career kind of an explosion.” Daly quickly rose through the ranks, and in 2018 she was named president and CEO of the Federal Reserve Bank of San Francisco, but more importantly for the trailblazers, she became the “first openly gay” head of the Fed’s regional bank.
Follow The Post’s coverage of the collapse of Silicon Valley Bank
Another Daly cheerleader was Greg Becker, the chief executive who ran the floundering SVB. Prior to his dismissal on Friday, he also sat comfortably on the board of directors of SF Fed. It was one big happy waking up family.
The SVB’s board is filled with Trump-hating Hillary, Biden and Obama sponsors obsessed with “fairness and diversity.” One of the directors, Elizabeth “Busey” Burr, advocated hiring underrepresented “people of color” in the banking industry to counter “four years of a presidency that unleashed a wave of racism and white supremacy.”
“It’s not enough to just report the numbers,” she said. “Instead, we need to demand deep learning about corporate culture.”
While they were busy studying corporate culture, the equally awake SF Fed did not notice the SVB making risky bets on long-term mortgage bonds, even as Federal Reserve Chairman Jerome Powell cabled his intention to raise interest rates by 75 basis points. increments.
Daley is accused of not noticing the warning signs? Of course not. Daley was on President Biden’s shortlist for the position of Vice Chairman of the Federal Reserve Board.
Biden, as usual, blames the collapse of the SVB on his predecessor, Donald Trump. But he must look no further than Daly, a public figure posing as a banking regulator. Who governs the regulators?
Paul Sperry is the former Washington bureau chief of Investor’s Business Daily and author of The Great American Bank Robbery.