Enlightenment has replaced skill and merit in banking, and San Francisco Fed Chief Mary Daly is the poster child for this pernicious trend.
A protege of Treasury Secretary Janet Yellen and shortlist candidate for Federal Reserve Vice President, Daly was supposed to oversee Silicon Valley Bank, but was apparently too busy playing politics and pushing woke agendas. to regulate rogue banks like SVB, the second largest bank. failure on file.
Daly had other priorities, including climate change, George Floyd and Black Lives Matter, black-white inequality, LGBTQ+ rights and a host of other woke social justice issues that had nothing to do with it. with banking and finance.
Daly’s Fed bio gushed that she is committed to “understanding the economic and financial risks of climate change and inequality.” Never mind the more existential threat from banks in its jurisdiction hoarding mortgage bonds with longer maturities that expose investors to higher interest rate risk.
In a recent LinkedIn post, Daly appeared distracted by racial justice, writing, “What black voices have I raised? Equity and inclusion starts with me. #GeorgeFloyd. She also posted selfies with local Black Lives Matter activists.
Meanwhile, Daly missed all the warning signs of runaway inflation, leading to sharp increases in interest rates that rendered SVB’s 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.
Moreover, early last year, Daly denied that the economy was suffering from painful inflation: “That’s not what I see.” She also saw no need to raise interest rates.
Then in August, she said inflation wasn’t affecting her personally, so what’s the problem? “I don’t feel the pain of inflation anymore,” Daly told Reuters.
“I am not immune to rising gas prices, rising food prices,” she added. “But I don’t find myself in a space where I have to compromise, because I’ve had enough, and many, many Americans have had enough.”
Easy for her to say: she earns more than $422,000 a year.
From his policy papers, speeches, and interviews, it’s clear that Daly thinks the Fed’s primary mission is not to control inflation but to achieve full employment — and raise interest rates. interest only undermines this objective. Her agenda is more jobs and higher wages for minorities, so sound money is not a priority for her – even though inflation is a huge tax on the working class and especially on minorities.
Until recently, Daly was opposed to the Fed’s hawkish move to tighten credit to fight inflation. His bank examiners no doubt shared his dovish mood and did not anticipate a rate hike, which may also explain why the alarm bells weren’t raised at SVB.
Daly has no experience in banking or risk management. After dropping out of high school, she worked at a donut shop before eventually earning her GED and entering college, where she fell in love with a socialist professor.
She said she was inspired by Marxist economist Gene Wagner, who “has mentored me all my life.”
Several years later, after earning a doctorate from Syracuse University, Daly landed a job as a labor inequality researcher at the San Francisco Fed, where she snuck up with the Fed’s president in the time, Janet Yellen, who helped her fail.
Daly called Yellen “an important mentor in my life. . . [S]he blew up my career. Daly quickly rose through the ranks, and in 2018 she was named president and CEO of Fed SF — but more importantly for wokesters, she was the Fed’s “first openly gay regional bank chief.”
Follow The Post’s coverage of the Silicon Valley Bank collapse
Another Daly cheerleader was Greg Becker, the chief executive who chaired the collapsed SVB. Until his ousting on Friday, he also served on the Fed’s board of directors. It was a big happy and awake family.
SVB’s board is filled with Hillary, Biden and Obama donors who hate Trump and are obsessed with “fairness and diversity.” One director, Elizabeth “Busy” Burr, has advocated hiring underrepresented “people of color” in banking to counter “four years of a president who has sparked a wave of racism and white supremacy.”
“It’s not enough to just report the numbers,” she said. “Instead, we must demand a thorough examination of corporate culture.”
While they were busy examining corporate culture, the equally awake Fed SF failed to notice that SVB was making risky bets on long-term mortgage bonds, even as the Federal Reserve Chairman , Jerome Powell, telegraphed his intention to raise interest rates by 75 basis points. increments.
Is Daly being blamed for not seeing the warning signs? Of course not. Daly made President Biden’s shortlist to fill the open vice-presidential seat on the Federal Reserve Board.
Biden, as usual, blames his predecessor Donald Trump for the SVB’s collapse. But he should look no further than Daly, the social activist posing as a banking regulator. Who regulates the regulators?
Paul Sperry is the former Washington bureau chief for Investor’s Business Daily and author of “The Great American Bank Robbery.”