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March 15, 2023 - System Update - Glenn Greenwald
01:07:57
Russia Shoots Down US Drone, Escalating Fears of Hot War. Plus, David Sacks Argues SVB “Bailouts” Averted Financial Meltdown

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Good evening.
It's Tuesday, March 14th.
Welcome to a new episode of System Update, our live nightly show that airs every Monday through Friday at 7 p.m.
Eastern, exclusively here on Rumble, the free speech alternative to YouTube.
Tonight, a Russian jet struck a U.S.
spy drone over the Black Sea near Ukraine and knocked it out of the sky, a disturbingly direct military confrontation between, let us remember, the world's two largest nuclear-armed powers, once again demonstrating the severe risks The United States government is undertaking, for some reason, all in order to continue to intervene in what Florida Governor Ron DeSantis this week called a, quote, border dispute between Russia and Ukraine.
In just a few minutes we'll examine this incident, the newly expressed views of Republican presidential candidates on Biden's ongoing war policies in Ukraine, and the ongoing dangers from this seemingly endless conflict.
But first, The weekend decision by the Biden Treasury Department to take over and then guarantee the deposits of two failing mid-sized banks, the Silicon Valley Bank and Signature Bank, seems to have calmed the situation, at least for the moment.
Last night, we interviewed the economics and antitrust analyst Matt Stoller, who laid out the case for why so many Americans feel a sense of indignation in watching what appears to be yet another episode where the world's richest people get richer and richer as they gamble and win.
Only to immediately call on the federal government, run by the two parties they fund, to intervene and use taxpayer dollars to save them from losses whenever their bets turn bad.
Tonight, we will speak to Silicon Valley venture capitalist David Sachs, one of the most vocal advocates for U.S.
government action to save depositors and only depositors, about his rationale for why he believes the Biden administration acted correctly.
As we do every Tuesday and Thursday, as soon as we're done with our one-hour show here on Rumble, we'll move to Locals.
For our interactive aftershow to take your questions and comment on your feedback, to obtain access to our aftershow, simply sign up as a member to our Locals community.
For now, welcome to a new episode of System Update, starting right now.
In the last five days, the U.S.
government has taken into receivership two mid-sized banks, Silicon Valley Bank and the New York-based Signature Bank.
These were the two largest bank failures since the 2008 financial crisis.
As I just noted, at least for now, this seems to have had a calming effect on the markets, preventing further contagion.
Just a few hours ago, the New York Times reported, quote, for the first day since Silicon Valley banks unwinding, there were no widespread reports of customers being denied the chance to withdraw money from ATMs and bank branches.
It appeared that the worst fears of widespread cash shortages were contained for now.
As a result, said the Times, quote, after nearly a week of tumult, the specter of a billing crisis over the banking industry appeared to ease, at least for the moment, as the pressure began to lift on the midsize and regional lenders most in peril.
Indeed, many regional banks that saw their stock in virtual freefall on Friday and Monday have now done a reversal.
One of the most troubled banks, First Republic, saw its stock price more than double today.
Before ending the day up more than 25% after giving back some of the gains.
Still many questions remain.
Last night, we interviewed the economics and antitrust analyst, Matt Stoller, who explained in very impassioned terms why he regards this as, if not technically, at least in spirit, a repeat of the 2008 financial crisis and the resulting bailout in which the U.S. government acted to save a repeat of the 2008 financial crisis and the resulting bailout in which the U.S. government acted to save the world's richest people who called the crisis in the first place and then essentially abandoned everybody else, in turn, basically allowing the richest
Now, there are definitely significant differences between what just happened in the 2008 financial crisis, as I'm certain David Sachs is about to explain, including the fact that with these two bailed out institutions, the executives of these banks and their bonuses and the shareholders and it the executives of these banks and their bonuses and the shareholders and it seems like the We're basically wiped out.
Maybe not entirely, but essentially the protection was not for them as happened in many of the troubled institutions in 2008.
Instead, the idea here was not to protect the shareholders and creditors of the bailed out bank, but only the depositors.
Depositors, which allows them to keep their money, to meet payroll, and to essentially prevent the harm from expanding.
Still, There's no question that these transactions feature the kind of sleaze that made so many people enduringly angry about the 2008 financial crisis.
Take, for example, the instance of former Democratic Congressman Barney Frank, whose name appears on the legislation enacted after the 2008 financial crisis that was designed to prevent further crises in the first place, the Dodd-Frank legislation.
He was on the board of directors of one of the two banks that failed, namely Signature Bank.
And not only that, according to the Wall Street Journal, he lobbied the federal government to exclude his bank.
From the increased oversight and stress tests that Dodd-Frank was designed to impose on all of the banking system after that crisis.
As you recall, we discussed last night, the 2018 overhaul or at least reform of those regulations meant that all banks that had assets under $250 billion, it used to be $50 billion, were now exempt from the more rigorous and rigid oversight that larger banks were subjected to.
Bernie Frank was one of the people who, after getting $2.4 million from that bank over the last several years to serve as a director, used his contacts in the US government to successfully lobby for that bipartisan 2018 bill that rolled back a lot of these oversight protections when it came to the kinds of regional banks That are now failing.
So there's certainly a lot to talk about here.
We had on Matt Stoller last night as a ardent and vocal critic of what the Biden administration just did.
And as we promised, we would have on tonight someone with a different view, somebody who believed that federal government action was necessary not to protect rich people, but to protect the banking system as a whole.
He is the Silicon Valley venture capitalist, David Sachs.
He was an entrepreneur, an investor, and an author.
He was the founding chief operating officer and product leader of PayPal way back in the day, and went on to invest in some of the biggest names in tech, including Facebook and Uber.
He's now a venture capitalist and a Silicon Valley thought leader.
He has a podcast called The All In Podcast, which has become very widely watched and very popular.
He's an outspoken advocate, not just on banking issues, but on many issues, including Foreign policy as well.
I've been on his podcast before and I'm really delighted that he is now joining our show to talk about this obviously critical issue.
David, good evening.
Thanks so much for taking the time to chat.
Yeah, good to be here.
Good to be with you.
Absolutely.
So I want to obviously talk about the merit of the debate that led up to the government action and then the merit of the terms itself.
But before I get into that, I want to talk a little bit about the politics of what just happened.
As I'm sure you recall, most people, unfortunately our age, recall because we lived through it, the 2008 financial crisis in which there was a lot of very intense anger Over the perception, at least, the federal government immediately acted to protect the country's richest people who benefited for years off the system.
And then when the recklessness caused the collapse, they didn't pay any price, but to the contrary, they were saved with taxpayer money.
And it seems like, to a lot of people, even though there are important differences that we'll get into, some of which I mentioned, This is kind of a repeat in that, in that the world's richest people on the other side of the coast, on the west coast in Silicon Valley, had their personal banks suddenly imperiled.
They called on the federal government to save their deposits.
And even though the shareholders and the bondholders and the executives got wiped out, the depositors got protected.
Do you at least understand the perception that what keeps happening is that rich people benefit when they make winning bets and then have the government come in and save them when they make losing ones?
Yeah, absolutely.
I understand that story and that pattern, and I understand that's why I'm on the hard end of this debate.
I mean, I've been tweeting for a few days now, and there's a very angry mob of people fighting me on this, so I completely get it.
But I think there are important differences with 2008.
And I think a good place to start is, you're right.
In 2008, the banking system was in peril.
We were at risk of systemic failure.
And when the Fed did intervene in that case, there weren't any bondholders or stockholders who were wiped out.
And that was wrong.
But this case is a little different.
In this case, nobody's bailing out SVB.
Okay, the bondholders are getting wiped out.
The stockholders are being wiped out.
The executive stock options are being wiped out.
The CEO is going to be in litigation.
The executives are going to be in litigation for years.
They may have their stock sales clawed back.
So nobody who caused this mess is basically benefiting.
Their lives are basically ruined.
Their reputations are disgraced.
The question is depositors and what you do with deposits.
And, you know, I noticed in your introduction you described the behavior that the depositors of SVB engaged in as gambling, like they've been in a casino.
And this is where I push back.
Well, to be clear, I was referring to the people who ran the bank, not necessarily the depositors, but go ahead.
Yeah, fair enough, fair enough.
And I think you understand the situation.
But, you know, it's a very common description now in the media.
I think the common narrative is that somehow The depositors or the customers of SVB were doing something inordinately risky.
And I think it's important to understand that startups may be risky, but that's not why SVB failed.
SVB failed because it basically invested in a bunch of mortgage bonds that went toxic.
And the startups had nothing to do with that.
Okay.
The only decision that Sharpe's made was to basically open a checking account or open a deposit account at SVB.
And so their question comes down to, are you going to hold depositors liable?
For basically a bank that had a regulatory seal of approval, that was blessed by the FTC, that passed all its regulatory exams.
In fact, it had an A rating from Moody's just a week ago.
Are you going to hold depositors liable in that situation?
And my view is no.
And I think if we could just separate that issue, then I think everyone would understand that if we had a different set of depositors here, no one would even be debating this.
If it had been 40,000 farmers, for example, small business farms, who were depositors, and this bank wasn't called Silicon Valley Bank, but Farmers Bank, I don't think we'd be debating for a second that those depositors shouldn't be responsible for a regulatory failure, because this is what this was.
And I think it's because there's so much animosity towards tech.
And the tech industry, and I get it, you know, tech can be insufferable.
And especially for people on our side of the aisle, you know, they're repressing speech and doing woke, stupid stuff that we hate.
So I totally get the anger.
But I do think that if the reason we're holding depositors liable here is because we just don't like these depositors, I think that's a really bad policy.
So I want to get into all of that.
And before I do, though, I've seen some conflicting reporting online about the specifics of the actual receivership and the guarantee.
And maybe we haven't seen enough to say for sure.
There seems to be conflict about whether the bondholders really are getting wiped out, in part because there seems to be, in the bond market, some value still being assigned to the bonds that were being held by the bank.
Is that something you can shed light on one way or the other definitively?
Well, I think the reason why there's a question about that is because we don't actually know if SVB was fully insolvent or not.
So what happened was that there was a run on the bank because I think the bank engaged in very poor risk management.
We can certainly discuss that.
And their communications were terrible.
And so because of that, there was a, I think, rational and legitimate fear that the bank might fail.
And so basically, depositors sought to take their money out.
At the end of the day, until all of SVB's assets are sold off and liquidated, we don't really know if their balance sheet has, it might ultimately have 100 cents on the dollar, it might have 90 cents on the dollar, it might have 85 cents on the dollar.
I've seen analyses all over the place.
This backstop by the federal government might not cost tax - well, taxpayers aren't on the hook anyway, we can talk about that, but it might not even cost the FDIC anything.
So we just don't know until all of the SVB's assets are liquidated what the real balance sheet looks like.
So I get your point completely that if this weren't called Silicon Valley Bank, if this were called Signature Bank, if this weren't a bank serving Silicon Valley tech startups but instead, you know, any other industry, the kind of reflexive reaction would be different.
At the same time, it is hard not to notice that it is Silicon Valley Bank.
And I think a lot of people are wondering, and I definitely include myself in that, is it just like a giant coincidence that the first bank where there was a bank run and that failed in this way just so happened to be Silicon Valley Bank that is the most intimately connected with, you know, entrepreneurs from Silicon Valley and funders, very sophisticated and wealthy people?
Or is there something specific about this bank and the way that it conducted its business that caused this to happen?
Well, sort of.
And let me explain that in a second.
But you'll notice that Signature Bank, basically the run on Signature Bank started on Friday and the regulators seized it on Sunday.
And there were a bunch of other banks under pressure as well, like you mentioned First Republic, even Trading in Schwab, a $100 billion giant, was halted on Monday and there were a dozen other regional banks that were under enormous stress.
If Signature Bank had gone a day before SVB instead of a day after, again, I don't think we'd be having the same debate.
But to answer your question directly, let me just explain why this whole thing happened.
And you really have to go back to Monday of last week.
That's when the chair of the FDIC gave testimony explaining That there were $620 billion of unrealized losses in the banking system.
Now, what does that mean?
It means that banks, and especially regional banks, bought long-dated treasuries and long-dated mortgage bonds.
Basically, 10-year treasuries, 10-year mortgage bonds.
And they were sitting on those.
And over the last year, because of the spike in interest rates, which was caused by the Fed's reaction to inflation, The face value of those bonds had plummeted.
They became toxic assets.
They were never supposed to be toxic assets.
T-bills and mortgage bonds are supposed to be the safest assets there are.
That's why SVB had an A rating from Moody's.
Nobody thought they were getting into a high-risk situation.
This is not like in 2008 where there's all these complicated derivatives nobody can understand.
They thought they were buying safe assets.
But what happened is that because SVB caters to community startups who are volatile in terms of their cash needs, there were more drawdowns on deposits.
And because there was a near-term drawdown in deposits, and they had $80 billion invested in 10-year bonds, there was what you would call a duration mismatch.
And they would need to sell those bonds to pay off withdrawals.
And because of, I think, a really stupid regulatory rule that says that banks don't have to recognize losses on bonds until they sell them, that basically what was going to happen is that SVB announced that, hey, we're going to start selling off these bonds to pay off these withdrawals.
And then all of a sudden, you're going to see that we have these giant unrealized losses and we don't have enough regulatory capital.
And that's when they announced we need to do an emergency fundraise.
That happened on Wednesday.
And then that is what triggered the run on the bank on Thursdays.
Everyone wondered whether they were insolvent or not.
So there's a lot to unpack there.
I don't know.
You know hopefully that wasn't like too technical.
But the bottom line is that What SVB did is being done and was done by banks all over the country, which is they simply bought T-bills and mortgage bonds that became toxic.
And again, you have to go back to why.
And fundamentally, the reason why is because we had the worst inflation in 40 years.
And that led to the fastest spike in interest rates we've basically ever seen over the past year.
So that is why they got caught off sides.
I remember, even as someone who doesn't pay a huge amount of attention to such matters, that this increase in interest rates as a way of staving off inflation was very vocally telegraphed.
I mean, it's not like the bank executives and managers were taken by complete surprise.
It was within their capacity had they been managing this bank responsibly to have adopted, say, less riskier or less high risk, high reward strategies for adapting to what they knew were going to be these interest rates as a way of staying off inflation.
Isn't that a fair critique of the bank?
Totally.
And I'm not defending the bank.
I think they engage in very poor, very foolish risk management.
They deserve to be wiped out.
The CEO is going to be in the hot seat for years, probably.
They deserve, maybe, to have stock options clawed back.
That bank deserves to fail.
So they engage in very poor risk management.
But let's get to the heart of what they did wrong.
If you had to pinpoint a single thing, It actually wasn't wokeness.
And, you know, and I loathe wokeness as much as anybody on earth.
This is like the Republican narrative that's emerged because they were too woke.
Listen, if wokeness was the problem, the whole Fortune 500 would be bankrupt right now.
OK, all these banks are woke.
The problem was not that.
It was that if you want to know the truth is they believe that inflation would be transitory.
When Biden, Yellen and Powell said, Basically, in 2021, that don't worry about inflation, it's going to be transitory.
They believe them.
They listen to them.
And they didn't basically buy the hedge on interest rates that they should have.
Now, I think that was incredibly stupid.
I never believed Biden, Yellen and Powell.
And you didn't believe Biden, Yellen and Powell, because we're skeptical.
But that was really their mistake.
And I think that Washington really needs to take some responsibility here for creating this whole mess.
If it wasn't for the Biden administration, Spending trillions and trillions in an unprecedented way starting in 2021.
The economy was already hot and already recovered from COVID.
And Biden started printing trillions and the Fed kept going with QE and printing even more.
And that led to this unprecedented wave of inflation.
That led to the spike in interest rates.
And that is why all these banks have so many toxic assets on their books.
So ultimately, this is a banking crisis that originates first and foremost in Washington.
They're the ones who deserve the blame here.
That's who Republicans should be training their fire on.
And it's really stupid to be training your fire on the depositors.
The depositors.
Listen, there's three groups of people in this whole mess.
There's the Washington policymakers.
There's the management of the bank, and then there's the depositors.
The least culpable group are the depositors.
They didn't have any agency over any of this.
They just made a decision over where to open a checking account.
Now, I don't know about you, but when I go open a checking account that's been blessed by Moody's and the FDIC, I'm not in a position to assess that bank's balance sheet.
How am I supposed to know if the balance sheet is healthy or not?
That's what I expect the Feds to do.
That's what the FDIC is supposed to do.
How in the world am I supposed to figure that out?
I mean, Bill Ackman is a super sophisticated investor, and I'm an investor too.
He says he can't figure it out.
I can't figure it out.
Nobody can figure it out.
So we need regulators to tell us when a bank is safe.
OK, great.
So then here, I think, is where we get into a kind of stickier issue again, which is the ideology coming out of Silicon Valley.
And I don't want to overgeneralize.
There's a lot of people in Silicon Valley with a lot of different political views.
But in general, a lot of people in Silicon Valley tend to be people who strongly oppose government intervention in the free market, who hate government regulation.
And this bank in particular, which is not just an ordinary bank, it has a lot of extremely powerful people who are connected to it in all sorts of ways, actively lobbied the Trump administration to reduce the amount of regulatory scrutiny to which they were subjected.
And they succeeded in large measure because of the very expensive lobbyists they paid, that included people like Barney Frank, who did it for his own bank too.
And by raising the Dodd-Frank cutoff from $50 billion to $250 billion, the amount of regulatory scrutiny to which these banks were subjected decreased significantly.
I guess we'll never know the counterfactual of whether in a world where Dodd-Frank still includes these banks and the regulators are being a little more aggressive, whether this would have been discovered.
But there's at least a viable argument that one of the things these banks did wrong, and the reason why there weren't regulators there wasn't because the Biden administration was lax, but because the Trump administration crafted together a bipartisan majority in 2018 to roll back the regulations that arguably would have been sufficient to but because the Trump administration crafted together a bipartisan majority in 2018 to roll there.
Okay, well, there's a couple of things going on there.
First of all, I do think that the regulators here were asleep at the wheel.
Like I mentioned, Monday of last week, the head of the FDIC testified about the $620 billion of unrealized losses.
They knew that since the end of 2022.
They've known that for almost three months.
What have they done about it?
Nothing.
And Powell testified in Congress two days before the SVB bank failure.
He was asked directly, do you see any stress in the banking system as a result of this sharp rate increase that you've basically engineered?
And he said, no, I don't see any stress.
So they, you know, their eyes were closed, their ears were closed.
They didn't know what was going on.
They were completely asleep at the wheel.
Now, as to your question about the lobbying, let me just say, I wasn't part of that.
I don't support it.
I don't know exactly what happened there.
Maybe there is a lot of blame to go around.
We need to go back and revisit those rules, for sure.
But I can tell you this, you mentioned the libertarian mindset of Silicon Valley.
I don't think it's as libertarian as you think, but even those of us who do have somewhat, you might say, libertarian leanings, Understand that preventing bank failures is a core federal responsibility.
If you go back in American history, you know, 100 years, bank runs used to happen all the time.
There's like a panic every 10 years and bank runs would happen all the time.
And the reason is, it's just the game theory of it's pretty obvious, which is if you hear a rumor that a bank might be going under, You don't lose anything by transferring out and you might save all of your money.
And so that's why bank runs happen all the time.
And that's why there's an important federal role in stepping in and preventing bank runs.
And that's why FDIC was created in 1933.
You gotta be a real, I don't know, like a sort of dinosaur to think that FDIC was wrong.
I mean, I don't know any libertarians who don't really believe that that is not a good thing for the government to be involved in.
So, look, I believe that the government should stop bank runs.
It's always been my view.
And that is what we were dealing with last week.
The dominoes were starting to fall.
On Thursday, you had the run on SVB.
It was seized on Friday.
Friday, you start to see the runs on other banks.
Signature was seized over the weekend.
FRB was about to go down.
On Monday, and really the whole regional banking system was in crisis.
And let me just tell you where we are right now, Glenn, and this is partly as a result of 2008.
And this is why I don't think a lot of Republicans or people who are sort of more anti-establishment have thought through at all, which is we now have a two-tier banking system as a result of 2008.
We have the too-big-to-fail banks, which the Fed has now canonized as being too-big-to-fail.
They call them SIB, Systemically Important Banks.
The Fed has basically said, these banks can't fail or take down the whole economic system.
Then you've got the regional banks, basically everybody else except for the SIBs.
And what they've now done is said that if your money is in a SIB, it's completely safe.
But if your money is in a regional bank above the $250,000 FDIC, then all your money is is an unsecured loan to that bank.
Now, if all your money is an unsecured loan to that bank and it's not guaranteed, why would you ever use one of those banks?
If there's even a chance, a 1% chance, you might lose your money by putting it in a regional bank.
You're never going to put your money there.
So let me tell you the path we were on last week.
Before Sunday night before the Fed intervened is the whole regional banking system was about to go down.
And what we would have been left with is four of these systemically important banks.
And let me tell you who would have loved that situation more.
No one would have loved it more than Jamie Dimon who runs JPMorgan Chase, the largest of these SIBs, the biggest bank in the country.
He was licking his chops.
And he's still licking his chops because where are all these cash flows going right now?
To the biggest banks.
And Glenn, if we don't support, I think, immediate regulatory action, which started Sunday night but is probably not over, This regional banking system is not going to be saved.
We're going to end up with four SIBs, four of these globally systemically important banks that are run by people who are politically connected in Washington and Davos.
That is where this is all headed.
And if you are concerned about individual freedom, if you don't want a social credit system that allows them all to control us, then you want a vibrant, diversified banking system.
And I know that everyone might hate Silicon Valley Bank because it's got the name Silicon Valley in it, but SVB, and Signature and First Republic and the 20 other banks that are about to fail are part of that vibrant, diverse regional banking system.
And our priority right now should be on saving that, saving the regional banking system.
And I think the steps that the Fed took on Sunday night were absolutely essential.
Or not only would we be in a financial panic and calamity right now, but there would be no regional banking system left.
So the assumption of that argument is that essentially there was nothing unique about Silicon Valley Bank that every other regional bank either was in a similarly difficult position or had Silicon Valley Bank been allowed to fail,
including the depositors getting wiped out above $250,000, including the depositors getting wiped out above $250,000, that the contagion and fear and panic of everybody running to their community bank and regional bank and putting it into Bank of America or Wells Fargo would have collapsed the system even if those banks had been fundamentally sound in the first place.
I've heard a lot of people contest that proposition and say that they think that these other banks were far more sound than Silicon Valley Bank and Signature Bank and a couple of these others.
And so if you're a bank regulator, if you're Janet Yellen, why not wait?
Why not say, let's see what happens.
My guess is that two or three banks are gonna go down and those depositors, those wealthy depositors in Silicon Valley are gonna get wiped out and we'll lose a couple of banks and we'll go from there.
Why couldn't we wait until we change these rules that everybody's aware of that if you have more than $250,000 in a bank account, That money is not insured.
Well, Glenn, that's what all the people who were criticizing me were saying when I started tweeting on Friday afternoon.
By the way, I didn't start tweeting about this until SVB was ready in receivership, and I could see with my own eyes the stress that was being placed on the banking system, because I talked to a lot of business leaders, lots of CEOs.
They were all frantically wiring money out of all of these different kinds of banks.
I could see with my own eyes.
So I started tweeting.
You mean banks other than Silicon Valley Bank?
You mean other regional banks?
Yes, absolutely.
First Republic and on down.
The lesson that they understood, which was very clear, is get into a SIB right away.
So I started tweeting and warning about this on Friday afternoon.
And people started saying just what you said, including presidential candidate Vivek Ramaswamy, who wrote an editorial In the Wall Street Journal, which hit at about, I think it got published about noon my time on Sunday, saying that this is just a Silicon Valley problem, it's just let them go under, it doesn't pertain to the rest of us.
Two hours later, Signature Bank was seized, utterly refuting that theory.
And I knew it was wrong because I was seeing the cash flows.
And then look what happened on Monday morning.
Despite the Fed action on Sunday night, the stock prices of about 20 of these regional banks started plummeting and the stock market had to halt trading.
I have no doubt that this was a full-fledged bank panic.
It was underway.
Now, it's so easy, now that we've sort of nipped it in the bud for now, it's so easy for people to go back and armchair quarterback this and say, oh, we overreacted.
No, I'm telling you, we didn't overreact.
We reacted at the last possible minute to avert catastrophe, and you can see it.
By the signature bank on Sunday, and not only that, by the fact that the Fed had to extend an emergency lifeline to FRB over the weekend.
It was going down on Monday.
It was absolutely the next domino to fall.
And then by what you saw in trading in the market on Monday.
And the only reason why these stocks have partially bounced back today Alright, so let me ask you about that then.
So, to me it seems like it's one of two things.
trading was halted, people finally processed the emergency actions that the Fed took on Sunday night and they're beginning to believe it's going to be okay.
All right.
So let me ask you about that then.
So to me it seems like it's one of two things.
Either all these other banks were similarly reckless or imperiled by as a result of these rate hikes as Silicon Valley Bank, maybe not quite as much but still within the same category.
In which case we should still see be, we should still be seeing a collapse of other banks because none of those fundamental problems that these other banks on their balance sheets have actually been fixed.
Or, we now have a policy in the United States that has been retroactively applied to Silicon Valley Bank, it's a signature bank, that this $250,000 limit no longer applies, that every single one of the pennies that you deposit into a bank account in the United States, no matter how high that number goes to $1 million, to $10 million, to $100 million, is now federally insured.
Number one, does the United States government have the capacity to do that?
And number two, if that's what we're going to have, why not just now allow every ordinary American to just go and open a bank account at the Federal Reserve since it seems like what we're saying now is basically the banking system is nationalized.
The U.S.
government now guarantees every deposit to the last penny for everybody who has money in a bank.
Well, OK, so first of all, let me just be clear that I think that SVB's risk management was exceptionally bad.
But I think the problems at SVB are maybe a matter of degree, not different in kind from all these other regional banks.
That's why they started plummeting in value.
And I think that it's not just a matter here of whether each individual bank is solvent.
It's also a matter of confidence in the system.
And people were starting to really question whether they could be confident about what was happening in these regional banks.
Now I want to note that the Fed took two actions really on Sunday night.
One was to make sure it was to guarantee deposits at SVB and Signature.
And by the way, taxpayers are not having to pay for that.
That is being paid for out of a fund, basically an insurance fund, where the premiums were paid into by other banks.
So it's basically a bank insurance fund.
But it's likely to be a pass-on, right, to consumers or to customers.
I mean, it's likely to end up as a payment that in some way the American taxpayer or the American consumer will end up absorbing, even if it isn't technically and directly a tax.
I mean, if the government is stepping in with that level of funding, someone's going to have to pay for that down the line.
Well, but I would argue that having an insurance pool that's paid into by all these regional banks is a good idea, and they should be insuring each other, and then, yes, if they have to pass the cost on at some point, fine, but they should have that insurance.
I think that's actually a good idea.
But putting that aside, the other thing that The Fed did, which was really important, is they created a new facility that said that with respect to these sort of unrealized losses, these long-term T-bills, these long-term mortgage bonds, we are going to give you credit at par value.
So in other words, You know, you would have gotten your money out at par value in five years or 10 years.
We will basically give you that value now.
We will then hold those bonds in our books until they mature.
So yes, costing the government the time value of money, but no one's going to lose money in nominal terms.
And that basically solves the problem of this unrealized loss problem.
So it doesn't necessarily mean we won't see any more bank failures, but it does mean that this specific issue of the unrealized losses on assets that were supposed to be safe and became toxic because of the spike in interest rates that the Fed and the Biden administration has caused, that that I think has now been addressed.
I guess one of the things that I've seen people accusing Silicon Valley of fear mongering over, aside from the gravity of the problem, which I think you've addressed thoroughly in terms of, you know, laying out all your arguments, is the question of whether it was really true laying out all your arguments, is the question of whether it was really true that all these startups were
That essentially, if the FDIC had come in and taken receivership of these banks, of Silicon Valley Bank in particular, but not guaranteed the deposits, what would have happened is they would have begun to sell off its assets.
The depositors pretty much immediately would have begun to have access to 20%, 25%, 30%, 35% of their deposits.
And then over time, they would have received a lot more.
And sure, maybe a few of these startups would have ended up failing as a result, but that the danger in which these depositors, in particular startups, were at risk was wildly overstated, given that even without a guarantee above $250,000, there's still access to those funds more or given that even without a guarantee above $250,000, there's still access to those funds more or less I...
So I think there's some truth to the argument that these startups could survive if there was just a haircut on how much they're going to get back.
And I said, listen, if you give startups back $0.85, $0.90 on the dollar, fine.
Just tell us what it's going to be.
The problem, Glenn, is speed.
SVB had 40,000 small businesses on its payroll.
10,000, not payroll, but on their accounts.
And 10,000 of them had payroll coming up on Wednesday.
And under California law, if a startup basically goes under and has unpaid wages, the directors are personally liable for those wages.
And what I can tell you is that the conversations happening on the board of directors, emergency board meetings were happening all over Silicon Valley, trying to figure out how they were going to furlough or fire There are employees on Monday or Tuesday because of these unpaid wages.
There were also attempts to try and find bridge loans, and VCs were potentially going to loan money to their portfolios.
So there was a whole panic and maelstrom of activity to try and solve this problem.
But the thing that Silicon Valley really needed was speed and certainty.
And this was the problem with trying to come up with a more fine-tuned solution of, oh, it's going to be $0.93 on the dollar or whatever.
You could argue about, is that more fair maybe?
But really, what the ecosystem needed was total certainty on Monday that their funds would be available.
And that ultimately is the solution they got.
And listen, I mean, you can quibble with that.
Maybe it should have been $0.95 on the dollar or something like that.
But the time it would have taken to figure out that discount, it would have been too late.
You would have seen, I think, thousands of companies potentially shutting down.
So just a couple more questions quickly, because I know you've been under a lot of fires.
I also want to give you the opportunity to address every argument that has been made against you.
One of the things Matt Stoller said on our show last night was that Well, yes, it may be true that this is kind of endemic to the banking system and what happens to commercial banks when interest rates rise at this very rapid rate, that a lot of this has to do with the very specific culture of Silicon Valley.
And that even though you don't necessarily want to blame depositors, because of course, even if you're a sophisticated startup, you get a big Series A investment.
You put your money in Silicon Valley Bank, you just assume it's a credible institution that's been around for 40 years.
As you said, it has the FDC sign on it.
No one expects you to do an investigation of the bank.
Nonetheless, there are all kinds of perks and rewards that people in Silicon Valley get as a result of having a relationship with this specific bank, facilities, and other things that politicians often sometimes get that are considered bribes if they come from banks.
And that basically what happened is, this is not just a regular bank.
This is a bank with extremely wealthy people.
I don't know what the percentage is of people with over $250,000 in their account, but it's much higher than a lot of other banks.
And his argument was that, essentially, they were there.
Everybody knows if you have funds in excess of $250,000, it's uninsured.
And that they did it, and they kept it there because they were getting benefits from having their funds in Silicon Valley Bank.
And now, essentially, they are being rewarded for what In reality was either reckless behavior or behavior from which they were benefiting.
Is there any truth at all to the idea that it's something about Silicon Valley and the connection to this bank in particular that was at least a contributing factor?
I think the only aspect in which being part of Silicon Valley was a contributing factor is that the deposit base of this bank was very volatile.
It went up or down very quickly and therefore was particularly stupid of them from a risk management standpoint to invest in long dated securities.
That duration mismatch we're talking about.
But, you know, the decision to invest in 10-year mortgage bonds, again, two years ago, that was seen as a very safe investment.
It only became toxic because of the Fed's reckless, not reckless, but well, it was reckless back when they did QE.
Their reckless actions, and I would argue the Biden administration's reckless actions.
So that is really the only sense.
The thing to keep in mind when everyone's talking about rich people is this was a business bank, okay?
Just like Signature, commercial bank.
And this is why the $250,000 FDIC limit just is totally inadequate.
I mean, I think what we really need here is a much greater level of FDIC insurance for business banks.
And in exchange for the offering that product, the bank needs to be very limited in terms of what it can invest in.
So, you know, that's sort of the quid pro quo.
I think we absolutely have to look at banking regulations.
And you mentioned, you know, is it the case that de facto everything now is FDIC insured?
I think that what we have to do is, well, I think there is some truth to that in the sense that If you look at bank failures in the past, it's been very common that the FDIC provides full protection even beyond FDIC.
You look at the savings and loan crisis.
You look at WAMU.
It's very common.
In practice, it's a very hard thing to do to say to the depositors that you made the mistake.
This is on you.
Because the truth is, it's not on them.
It's on regulators.
It's on the bankers.
I mean, what I analogize this to is if a patient experiences medical malpractice, Do you blame them for not shopping for a better doctor?
I mean, really, when you go set up a bank account somewhere, even if you're a small business, and you go set up a checking account, is it really the case that you're in a position to evaluate whether this is a trustworthy bank or not?
I don't see how any of us can possibly understand that.
Think that unless you want to convey to Americans that opening a bank account is an investment decision.
It's not an investment decision.
It's just a service provider.
But if you want to convey to them that this is a gamble, that this is like being in a casino, you will dramatically undermine confidence in the American financial system.
So listen, when you go to a bank, it's got to be safe.
It's got to be like Look, if the regulators bless this, I can put my money here.
And if that means the regulations have to get a lot tougher on these banks, then so be it.
That's the system we need.
So, last question.
One of the things I cover a lot that interests me a lot is the changes that primarily came from Trump's emergence in the Republican Party, but a lot of it predated it.
He sort of recognized it, smelled it like a good kind of opportunist does.
There's been a lot of ideological changes, distrust of the U.S. security state, a desire to see a lot less interventions and the kind of war machine, trade policy, lots of things that used to be Republican orthodoxy that now among the Republican base, especially the MAGA base, are really held in a lot of suspicion. especially the MAGA base, are really held in a lot One of the things that has not quite made it there yet is the idea that government regulation of the free market is inherently bad.
That you always want to keep government out of the free market.
This is an idea popularized by Ronald Reagan.
It was kind of gospel in Republican politics for decades.
One of the things that happened over the last couple of years is Biden made some nominations of people who say things like, I think we need to be a lot more aggressive in regulating banks.
And those are the people who have a lot of trouble getting confirmed by the Senate.
It's the people in both parties who say, let's keep regulators away from the free market.
Let's let banks, you know, prosper and thrive.
Those are the people who get sort of passed through the Senate without any problem whatsoever, bipartisan support.
Can we take away from this lesson in your view the idea that we need to kind of get rid of our allergy toward government regulators at least with regard to certain industries like banking and that at least in this case we probably could have benefited from more regulation or oversight at least and not less?
Look, I think definitely, I would view it on a case-by-case basis to see if the regulations make sense.
And again, my starting point for thinking about this is that if you go back to before 1933, you had bank runs all the time.
You needed FDIC to stop that.
I believe that the federal government has a key responsibility in ensuring the integrity of the banking system.
There is no other way, I believe, for a banking system to operate Other than for the federal government to make sure that the banks are safe and to backstop it.
Otherwise, you get panics and bank runs.
Now, as the quid pro quo for FDIC, you have to regulate what the banks can invest in.
Because if the banks make stupid decisions, they're going to lose basically money.
They're going to lose now the government's money, which is backed by FDIC.
So yeah, there is a quid pro quo there, Glenn.
And I think, yes, we have to have sensible banking regulations.
And one of the things I just tweeted, Ro Khanna had a tweet storm.
He's a progressive.
From Silicon Valley.
From Silicon Valley.
And he saw the need to basically nip this panic in the bud.
And he tweeted, I would say some progressive ideas on banking regulation.
And I retweeted it saying that, listen, I don't agree with every detail here, but I think he is smart, thoughtful, and good faith.
And he needs to work with Republicans who are smart, thoughtful, and good faith.
And they need to come up with some smarter regulations here.
Because I think the situation we have right now, like I referred to, is there's going to be a perception that only the systemically important banks, the SIBs, the biggest of the big, are safe, and all the regional banks are unsafe.
And if that perception continues, then I think we're only going to see more centralization and more consolidation of the banking system.
And so this is a case where, you know, I'm normally, what I'm skeptical of regulation is because I don't want everything controlled by Washington.
But in this case, I think smart regulations help us avoid Yeah, absolutely.
All right, well, David, I know from experience it's not always easy to keep sticking your head up when you're sort of public enemy number one from a lot of different people, so I appreciate your coming on and being willing to engage in this conversation.
I think that's always the best way to handle these controversies, and I really appreciate your doing it.
Thanks so much.
Yeah, absolutely.
Thank you.
All right, have a good evening.
All right.
Thanks.
Thanks.
So from the start of the Russian invasion of Ukraine and the escalating decision by the United States to become increasingly involved in that war, notwithstanding the fact that the position of the federal government for decades, including under President Obama, was that Ukraine was never and will never be a
vital interest to the United States, whereas it always has been and always will be a vital was that Ukraine was never and will never be a vital interest to
The obvious concern, one of them at least, aside from the gigantic sums of money that the United States' government is spending, while its banking system, as you just heard, seems to be teetering on the brink of something, is that there is a very real likelihood of a direct hot war between Russia and the United States, the two countries which possess, still, the largest nuclear stockpiles on the planet, ones capable of destroying the world many times over.
It's extra disturbing because that's all happening in the context of a worsening diplomatic relationship, which is basically non-existent at this point, between Washington and Moscow, where even decades-old arms treaties, arms control treaties, that were heralded by no one less than Ronald Reagan, who called the Soviet Union the evil empire, and at the same time emphasized the importance to humanity in negotiating arms control treaties.
Basically, this entire arms control framework has now been disregarded, has now been allowed to all fall apart.
There's basically just a bunch of nuclear warheads aimed at each other's cities with no open communication, no dialogue.
And from the beginning, the concern has been, as it always is with nuclear war, not that two countries will suddenly go insane or a leader will get suicidal and just want to blow up the world on his way out, although that's possible.
So that's not the most likely scenario of concern Instead, the concern is unintended escalation by the kinds of things that can happen when two countries are involved in a very complex and sophisticated war right on top of each other.
Even if they're not directly engaged, you can find them, by accident or miscommunication or misperception, getting engaged in the kind of conflict that can cause escalation to happen very quickly.
We've already had several of those incidents where US jets have been brushing up against American military hardware over the years and now we have a very specific example, a very dangerous example of one that happened just today.
Here you see the Wall Street Journal Headline which reads, quote, Russian jet collides with a US drone over the Black Sea.
It just happened today.
Details are pretty sketchy.
My guess is a lot of journalists are relying on not necessarily the most reliable sources, but the Wall Street Journal's a more careful newspaper than most major outlets.
So let's look at their rendition.
Quote, a Russian jet Struck a U.S.
spy drone over the Black Sea and knocked it out of the sky Tuesday, the Pentagon said, in one of the first direct military confrontations between the two nation's forces since the war in Ukraine began more than a year ago.
The collision demonstrated how closely the U.S.
and Russia are operating on the margins of a conflict zone, even as they aim to avoid incidents that could inflame tensions between them and widen the war in Ukraine.
While the U.S.
has provided Kiev more than $30 billion in military aid and equipment, as well as intelligence, and there's about another $70 billion authorized for other sorts of aid as well, it has said it wanted to avoid conflict with Russia.
Tuesday's incidents demonstrated the challenges of supporting the war while, as the U.S.
warned Tuesday, avoiding potential, quote, unintended escalation.
Early morning local time on Tuesday, two Russian Su-27 jet fighters and the U.S.
MQ-9 surveillance drone, originating from Romania, flew near one another for about 30 minutes in international airspace, a U.S.
defense official said.
Let's remember this is the U.S.
government's anonymous version of events, which has proven many times to be less than fully trustworthy.
In an incident that lasted a matter of seconds, about 7 a.m., one of the Russian jet fighters flew past the drone, dumped fuel on it, and pulled away.
The second jet then sought to do the same but collided with the drone, a defense official said.
The collision knocked off a piece of the MQ-9 drone, and the operators guided it down to the water.
The U.S.
hasn't recovered the wreckage and officials declined to discuss any operations to recover it.
The U.S.
no longer sails its ships in the Black Sea following a Turkish prohibition on warships imposed after Russia's invasion of Ukraine last year.
A Pentagon official described the incident as a, quote, But accidental move by the Russian pilots, the Russian jets landed shortly after and Russian-held Crimea, a defense official said, and when one plane was damaged, it appeared operable.
The drone captured the incident on video, which the Pentagon intends to declassify and release to the public, said a Pentagon spokesman, Air Force Brigadier General Pat Ryder.
Quote, this incident demonstrates a lack of competence in addition to being unsafe and unprofessional, said U.S.
European Command, which is responsible for U.S.
military operations in the region.
The Wall Street Journal using government officials, U.S.
government officials, that's the U.S.
government version of events.
I'm certain Russia will have a much, much different version of events, but whatever else is true, this is direct contact, unintentional otherwise, between military hardware on the part of the Russians and the military hardware on the part of the United States.
Something that you absolutely do not want when you're talking about two nuclear-armed powers with very little Channels for communication to resolve these sorts of things.
Now...
Let me show you a map, just in case, I guess our people in the studio had a little bit of fun.
Here's the world map, just so you can see where all the countries are located.
Here, showing in this orange, this red arrow is the Black Sea, which is where the incident took place.
You can see it's quite far away from the United States, but it is very, very, very, very close to Russia.
Here we see Russia, just to emphasize its proximity to the Black Sea as far as this incident is concerned.
And there you see the United States, which is extremely far away from the region where it took place, just in case anybody is trying to look for who is the provocative country here.
Yeah, it's very outstanding art on the part of our system update team, really, really top notch.
But it actually does make the point in an important way that so often this is what happens.
I mean, I can show you maps, they can show you maps, or you just move the arrow around and you can see, you know, hundreds of arrows pointing to US military bases or other military assets operating very close to Iran, very close to China.
Whereas Iran and China or Russia have very, very, very few in this region over here of the United States.
And so oftentimes what happens is you have this kind of weapon-free zone here, which You won't find any Iranian military assets.
Russian military assets are Chinese.
And then you have things like this, which is the Black Sea right there.
Here's Russia right here.
There's all kinds of American planes and ships all over there.
Here you have China and the South Sea.
You have the US assets in the Philippines all throughout the region.
Very important to China, but no Chinese military assets.
All over here.
That is the narrative of provocation that we're constantly fed, that these other countries over here, the ones that essentially have made the mistake of being surrounded by US military assets, are the ones that are somehow provocative, and the United States is just over here minding its own business in the other side of the world.
Now, beyond this Russian incident, there was something I found extremely interesting, which is that Fox News host Tucker Carlson decided to do what is unquestionably something of journalistic value.
He decided to ask all of the presidential candidates, declared or likely, seeking the Republican nomination for what their view is on the conflict in Ukraine and whether they would support or depart from the Biden administration's policy.
And unsurprisingly, people like Mike Pence and I believe Mike Pompeo, though he didn't respond, though he said it before, have said that they believe that the Biden administration is either doing exactly the right thing or should be even more aggressive in supporting Ukraine.
And really, that's not a surprise.
Nikki Haley feels the same way.
That's the neocon wing of the Republican Party, still doing what they always do.
We had Vivek Raviswani, who's a presidential candidate for the Republican Party, who we interviewed earlier today.
We're about to show you that full interview tomorrow on Tomorrow Night Show, probably.
And he, as part of this question, responded by saying essentially that the United States has no business prioritizing Ukraine and devoting military assets and resources to the war in Ukraine.
He said he thinks that instead the priorities for the United States are its border and China.
You'll hear that interview tomorrow.
But the one person whose views on foreign policy are really kind of a mystery It's Florida Governor Ron DeSantis.
We've talked about that on the show before, in part because he's been the governor of Florida for the last four years, and rightfully so.
His attention has been devoted to domestic issues involving the state of Florida, and he hasn't been running around opining on national issues of foreign policy.
He did have a voting record in the House for the, I think, three, four, five terms, four terms that he served.
As a member of the House representing Florida that I've said in the past was similar to Mike Pompeo and being very kind of classic hawkish pro-war establishment Republican voting record except, it's a pretty big exception, Governor DeSantis when he was in the House opposed the CIA regime change operation in Syria while Mike Pompeo supported it.
That was supported by Marco Rubio and John McCain and Lindsey Graham and that whole crew.
And just this week, Matt Gaetz introduced a resolution, as we reported on the show before, to require the withdrawal of all troops from Syria.
It got in excess of 100 votes in the House, although it failed by 200 votes.
The establishment wings of the Republican and Democratic Party united to block that resolution, but You had people on both the populist left and populist right who voted for it.
It was roughly even.
Maybe eight or nine more Democrats voted yes on Congressman Gates' bill to remove troops from Syria.
This was a position Ron DeSantis had back during the Obama administration when he had to vote yes or no on this military operation in the House.
So it's a little bit unclear, after the Trump presidency that changed so much, how Governor DeSantis, A, is going to position himself when it comes to foreign policy if he does decide to run, as it looks likely, and B, beyond the rhetoric, what his actual views are.
So yesterday, as I said, or this week, Tucker Carlson Asked the Republican candidates what their views are on the war in Ukraine, and last night on his show he reported everybody's statements.
As I said, most are easily predictable.
Trump is vehemently opposed to the U.S.
involvement, as is Vivek.
Mike Pence is aggressively in favor, and here is what Governor DeSantis said.
And then maybe the most newsworthy response that we received was from Florida Governor Ron DeSantis.
DeSantis has well-known views on many topics, of course, but until tonight, no one could really say with precision where he stood on the war in Ukraine, which is arguably the most important topic in the world.
And now we know.
DeSantis is adamantly opposed to the position that most Republicans in Washington have taken on Ukraine.
DeSantis is not a neocon.
Who knew?
Quote, while the U.S.
has many vital national interests, DeSantis writes, securing our borders, addressing the crisis of readiness within our military, achieving energy security and independence, and checking the economic, cultural, and military power of the Chinese Communist Party, becoming further entangled in a territorial dispute between Ukraine and Russia is not one of them.
Let me just go back here because, understandably, Tucker, as part of his show, had to skip over for time constraints, so I just want to read that last sentence he skipped over.
Just after he said, quote, the Biden administration's virtual blank check funding.
of this conflict for quote as long as it takes he's quoting Joe Biden and his administration there without any defined objectives or accountability distracts from our country's most pressing challenges so he seems to be in a kind of mild way at least but I would say reasonably clear expressing opposition to the official position of the Biden administration although they deny it's a blank check it's certainly been stated as we are there for as long as it takes what Governor DeSantis seems to be saying
Again, using pretty mild language, that distracts from our country's most pressing challenges.
Then he goes on. - We're entangled in a territorial dispute between Ukraine and Russia is not one of them.
Without question, he writes, peace should be the objective.
The U.S.
should not provide assistance that could require the deployment of American troops or enable Ukraine to engage in offensive operations beyond its borders.
F-16s and long-range missiles should therefore be off the table.
These moves would risk explicitly drawing the United States into the conflict and drawing us closer to a hot war between the world's two largest nuclear powers.
That risk is unacceptable.
DeSantis goes on to oppose the policy of regime change in Moscow, which is very popular in Washington, and he points out that the Biden administration has created an alliance between Russia and China, and that's a disaster for the United States.
Quote, we cannot prioritize intervention in an escalating foreign war over the defense of our own homeland, especially as tens of thousands of Americans are dying every year from narcotics smuggled across our open border, and our weapons arsenals, critically for our own security, are rapidly being depleted.
So that's DeSantis' position.
Now, Tucker said there quite definitively that Ron DeSantis is not a neocon.
I'm most definitely not anywhere near ready to make that statement.
It certainly is true that if you look at former President Trump's statement that he provided Fox News and Tucker Carlson on this question, I would say it was much, much stronger in his opposition.
He, President Trump, has repeatedly expressed that opposition throughout the year in a very aggressive and assertive way.
So at the same time, President Trump was actually the president of the United States for four years and has a record that includes providing lethal arms to Ukraine.
But at the same time, how much Donald Trump kind of allowed that to happen versus wanted that to happen is very much up in the air, although what happens during his presidency is his responsibility.
And if he lacks the ability to control the people he appoints or he appoints People who have bad ideologies like he unquestionably did repeatedly, that's a big flaw.
And whether he's able or willing to correct that flaw if he were to become a president again is a very open statement.
A question to me no matter how good his statement is, but his statement is quite good.
I would say it's better than DeSantis's.
But nonetheless, Tucker is right that DeSantis took a clear position.
Not a crystal clear position.
I have people I respect who are arguing that it's purposely kind of crafty in its way of pretending to oppose the Biden administration's policy without actually really doing so.
But the fact that he challenged the fundamental precepts of the war as Washington sees it, that he's talking about it as a border dispute unrelated to the vital interests of the United States, I think it's very encouraging.
And I think the thing to note is that this is not actually the first time Governor DeSantis has expressed A kind of, let's say, narrative opposition, at least, to the war in Ukraine.
We reported on this at the time just a few weeks ago, February 20th.
He appeared on Fox News and I think surprised the Fox hosts when he was asked about his views on the war in Ukraine.
My understanding is he didn't know he was going to be asked about it.
This was kind of a spontaneous answer, which I put a lot more stock in than a prepared statement, and this is what he said then.
Well, they have effectively a blank check policy with no clear strategic objective identified.
And these things can escalate, and I don't think it's in our interest to be getting into proxy war with China, getting involved over things like the borderlands or over Crimea.
So I think it would behoove them to identify what is the strategic objective that they're trying to achieve.
But just saying it's an open-ended blank check, that is not acceptable.
So Governor, what does a win look like for us in Ukraine?
For Ukraine?
Well, I think it's important to point out, I mean, you know, the fear of kind of Russia going into NATO countries and all that and steamrolling, you know, that has not even come close to happening.
I think they've shown themselves to be a third-rate military power.
I think they've suffered tremendous, tremendous losses.
I got to think that the people in Russia are probably disapproving of what's going on.
I don't think they can speak up about it for obvious reasons.
So I think Russia has been really, really wounded here.
Um, and I don't think that they are the same threat to our country.
Even though they're hostile, I don't think they're on the same level as a China.
Right.
Governor, you're doing something very important.
You're announcing a tour.
So I found that answer actually more interesting and more revealing than that written statement, in part because I do feel like it had some spontaneity to it.
And as a result, he kind of revealed his foreign policy instinct, which we haven't seen much of.
And to me, that really kind of spoke of a foreign policy realism.
The idea that it's much less important to figure out who the good guys are and who the bad guys are.
There's always bad guys running around.
You can't go around the world getting rid of all the bad guys.
It's childish and self-destructive to try or to think that you can understand the world that way, that you have to think about interest and power.
And he actually sounds a lot like President Obama when it comes to Ukraine and Russia, which, in retrospect, I think is a compliment.
Mainly that President Obama constantly emphasized that it's absurd to risk war with Russia over a country like Ukraine that we don't have any vital interest in.
And in both that spoken answer and in the written answer, Governor DeSantis emphasized the dangers, as President Trump has repeatedly done, of the dangers of escalation between these two very powerful countries.
Powerful in the sense of nuclear weapons, not in the sense of conventional military.
And today we see the very embodiment of what that risk is as a fighter jet collides with or runs into or purposely destroys or the drone purposely ran into the fighter jet.
We have no idea what happened.
But it seems like they're keeping cool heads about it.
The US officials who talked to the Wall Street Journal are saying it's immature, it's childish, but it's not a big deal.
It didn't seem purposeful.
But these kinds of incidents, much less, has led to escalation and to very, very unintended but horrific wars.
And to be playing these games, Over a region that is not of significant interest to the United States and that I really believe increasingly is essentially due primarily to the ongoing anger of the United States Democratic Party in blaming Russia for the 2016 loss
By Hillary Clinton, which is an insane reason to risk these kinds of escalations, and in part just the kind of DNA instinct of the Republican establishment to want to just fund wars all the time because it benefits their donors, because they feel strong from doing it.
The kind of unholy alliance, yet again, between the establishment wings of both parties is what is creating this extremely difficult and dangerous situation.
And to hear both President Trump and Governor DeSantis in the same week Lay forth some of the insanity involved in this at the same time that we saw a bipartisan coalition in the House led by Congressman Matt Gaetz but supported by the Squad and House Progressives on the one hand and Marjorie Taylor Greene
And Jim Jordan and Nancy Mace, on the other, demand a withdrawal from Syria, I think, are encouraging signs, at least in the discourse, which reflects what they know Americans want to hear, which is that they're tired, Americans are, of supporting dangerous wars that are not in the interest of anybody other than the arms dealers and the U.S.
security state.
And if this isn't a warning to you and to Washington of the insanity of allowing this war to continue, I really don't know what is.
So that concludes our show for this evening.
As always, thank you so much for watching.
Because it is Tuesday night, that means that we will have our live interactive after show on Locals, where we take your questions and respond to your feedback.
If you're interested in watching that show or in having access to other parts of our journalism, all you need to do is click the Join button right below the video in the red, that's the red button right below the video on the Rumble page, and you will become part
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