Posobiec, who was joined by Knox County, Tennessee Mayor Glenn Jacobs, asked his guest, "When we're looking at something like this, for the folks at home sitting back, you've got money in your bank accounts, people are starting to wonder, 'should I go check take the money out of my bank?' Can you contextualize for us where things are from your perspective and how we got here?"
Jacobs, also known by his WWE wrestling name "Kane," comes from a libertarian economic perspective, as a proponent of the Austrian free-market school of thought.
"Well, unfortunately, if we look at the big picture, really the overall banking system and overall finance system is built on a fraud," the mayor responded. "It's built on fractional reserve banking. In 1971, Richard Nixon took us off the gold standard, which just allowed all sorts of undisciplined actions coming out of the federal government from the Federal Reserve. And this is what happens in all the booms and busts that we see throughout our economic history, are the result of printing money and then inflation starts to take off and it's causing pain to the consumer."
Jacobs went on to describe the causes and effects of bad economic policy, saying, "So then you start contracting the money supply, which causes a crash, and then you look at the investment going to parts of the economy where it shouldn't, and what economists call malinvestment."
According to the WWE star, no one is "immune from what could potentially happen."
"I think you're exactly right," Posobiec responded. "That idea of malinvestment — it's this thought that 'we're just going to sure up a couple of banks, we're going to sure up a couple of institutions.' But at the same time, what you're doing is, you're throwing good money at bad investments… I hear a lot of people on the right say 'Well, we got to protect the companies, we got to sure things up,' but that's not actually a free market system, is it?"
"No, absolutely not," Jacobs replied. "...It's almost like people [who said] when the car manufacturers were bailed out, 'Well if we don't do this, they're all going to go away.' No they're not. What's going to happen is those assets are actually going to be able to be acquired much more inexpensively by better operators."
"In a market, losses are as important as profits," he asserted. "Because what loses reveal are mistakes that are being made, have been made, and also incompetence in management."
"At some point, you can't keep papering things over, which has been happening for a long time, especially since 2008," the mayor added.
"Our system doesn't reward caution ... it rewards risk," Jacobs argued, slamming the political elite for "socializing the risk and privatizing the profit."
According to the Human Events host, banks are more "focused on going woke, they're focused on pronouns," more than making good financial decisions.
As The Post Millennial has previously covered, SVB had been putting effort into multiple LGBTQ diversity programs, including a "safe space," just before the company folded. Jay Ersapah, the head of Financial Risk Management at the bank's UK branch, spearheaded SVB's "woke" projects, which some Twitter users pointed out was time that may have been better spent on assessing financial risk.
As the discussion continued, Posobiec brought up "the perspective of the regular guy out there," who he said views SVB as an "elite bank… that obviously, a lot of political donations go through here."
"They're getting bailed out. Meanwhile, prices — and we just saw the CPI index this morning — are going up across the board, especially for guess what, oh, housing and essentials, right… And it just feels like it's another squeeze on the little guy."
The latest consumer price index from the Bureau of Labor Statistics released on Tuesday saw a rise in the prices of food, energy, and furniture, continuing on from the inflationary pricing seen last year.
"The food index increased 0.4 percent over the month with the food at home index rising 0.3 percent," the bureau announced.
Libertarian analyst Gene Epstein of Reason noted that the report indicates that consumer prices are "still at a 41-year high."
Jacobs concurred, saying he doesn't think it's "fair for the average person out there."
"I mean, we're talking about $250,000, and everybody knew that going in," he said. "I feel bad for the depositors. You know, obviously, when you put your money in the bank, you think that it's going to stay there forever and be safe. But we should all be aware that with your FDIC insurance, it's a $250,000 limit, and that is what it is."
Jacobs slammed the elites who are advocating for higher insured deposit limits, saying "I've seen things of up to $10 million for FDIC coverage, but here's something to keep in mind. The FDIC doesn't really have much money…I think in total, it has access to about $225 billion. The problem is the banking system is $22 trillion. So right now, the FDIC, hopefully, this will never, ever happen... can only cover about 1.26 percent of bank accounts across the country. Well, look, it's never going to work if you're talking about increasing that deposit limit by 40 times."
"And the average person just doesn't have the political ability to say, 'Well, what about us…what are you going to do about all the issues that we're suffering with?'"
The collapse of SVB marked the largest bank failure since the closure of Washington Mutual during the 2008 financial crisis, and the second-largest bank failure of all time.
"Yeah in the case of SVB there were some serious issues, but I don't think any bank is immune," Jacobs said.
