Social Media's Tragic Impact on Teens

Amid years of mounting evidence of the negative impact on teenagers, social media Goliaths continue to peddle their addictive platforms, placing profits ahead of young people's mental health.   Tech firms operate with legal impunity, ignoring the studies documenting the harm caused by social media.

At the outset, let's stipulate that social media also has positive aspects.  Platforms have facilitated communications, enabled social connections and provide access to a myriad of information and perspectives. However, tech giants have failed their responsibility to clean up the content sewage. 

Teen social media usage soars every year, turning casual usage into an addiction. A Pew Research Report shows the top social media platforms used by young people 11-to-17 years old are:  Youtube, 95%; TikTok, 67%, Instagram, 62%;  Snapchat, 59%; Facebook, 32%; and, Twitter, 23%.

A study by Jean Twenge, psychology professor at San Diego State University, discovered that students who spent five or more hours a day online were 71% more likely to have a least one suicide risk factor. Those include depression, thinking about suicide or attempting suicide.  

Research shows that the average young person spends an average of three hours a day on social media.  The study by Twenge found that the overall suicide risk factors rose "significantly after two or more hours a day of time online."  

A 2018 Children's Mental Health Report documented the negative effects of social media on  adolescents, aged 11-to-17.  Thirty-five percent of participants were classed as poor sleepers and 47% were classified as anxious.  Higher levels of anxiety correlated with increased usage.

While social media companies argue there are benefits to their platforms for teenagers, actual research underscores the dark side of social media.  A Common Sense Media survey of social media users found 70% of teens "feel left out or excluded when using social media."  

The evidence is unequivocal.  

It is no coincidence that teen suicides and depression are rocketing higher.  The Centers for Disease Control and Prevention (CDC) reported that suicides in females aged 15-24 have spiraled 87% over the past decade.  Suicides jumped 30% among males in the same age group.

Overall, 22% of high school students in a recent survey said that had seriously considered suicide; 18% admitted they had a suicide plan; and, 10% reported they had attempted suicide at least once.  Female students were at higher risk with 30% claiming they had considered attempting suicide.

Social media apologists will point out there is no direct link between suicide and social media usage.  However, a previously unpublished study from Facebook found Instagram to have harmful effects among a portion of its millions of  users, particularly teen girls.  

Findings indicated that Instagram makes body image issues worse for one in three teen girls. Among teens who reported suicidal thoughts, 6% traced them back to Instagram.  Instagram and Facebook are both owned by Meta.  

Congress has hauled the likes of Meta Chairman and CEO Mark Zuckerberg and other social media bosses to Washington for hearings. Senators and representatives pound tables, haranguing  the executives. Yet there is never any legislative action to hold social media firms accountable.

Zuckerberg hired an army of lobbyists to influence senators and representatives. Since 2017, Meta has poured $100.6 million dollars into lobbying efforts.  As added protection, Zuckerberg funneled an unprecedented $419 million into non-profits aimed out turning out Democrat voters in 2020.

Other big tech firms have parachuted into Washington, reinforcing their lobbying activities.  That's why no legislation will ever be passed to rein in Instagram, YouTube, Facebook, Snapchat or TikTok. Spreading money like fertilizer in Washington turns antagonists into allies.  

Who will make the profiteers change their algorithms that feed an addiction that is killing teenagers?

Turns out the parents of teens are the ones fighting back against steep odds.  The number of families pursuing lawsuits against social media titans has soared to more than 2,000.  Another 350 lawsuits are expected to move forward this year, according to reporting by CBS News "60 Minutes."

Kathleen and Jeff Spence, interviewed on the program, recounted a harrowing story of how their 12-year-old daughter sank into depression and developed an eating disorder after opening at Instagram account.  The teen logged on at age 11, although Instagram requires users to be 13.

The daughter searched instagram for fitness routines that sent her into the ugly underbelly of social media.  Her feed was bombarded with photos of very thin, sickly girls promoting eating disorders.Those disturbing images were delivered by Instagram's algorithms, which push content. 

Her life began a downward spiral by 12 when she began spending five hours a day scrolling through anorexic body images.  Her weight dropped and she drew a picture of herself in her diary, surrounded by her laptop while writing:"stupid, fat....kill yourself."

She began struggling with mental health, depression and her body image. "It made me hate myself," she confessed to a "60 Minutes" reporter.  Her sophomore year she posted on Instagram that she didn't deserve to exist. A friend shared her post with a school counselor who called her parents.

Her parents got help for their daughter.  But in some cases plaintiffs lost their child to suicide. The previously noted Facebook internal document reveals employees knew Instagram was pushing girls to dangerous content, the "60 Minutes" investigative reporter revealed.

If Congress won't protect vulnerable teens, then perhaps the lawsuits will finally force social media platforms to reform their algorithms, built to force feed inappropriate content to users. However, the social media platforms have buildings full of attorneys to protect their profits. 

And the parents' cause suffered a blow when the Supreme Court handed social media titans a major victory in a recent decision.  The justices unanimously rejected two cases aimed at piercing the legal shield adopted 27 years ago to protect internet companies from liability lawsuits.  

That leaves the parents' lawsuits against big tech as the last, best and likely only chance to hold social media firms accountable for their actions.  

Backlash Against Corporate Social Activism

Burgeoning numbers of companies are bombarding consumers with social issues in business and product advertising. But one company, Anheuser-Busch InBev, waded too far, triggering a rebellion that has damaged the brand, torpedoed sales and torched millions of dollars in shareholder value.

The Belgian-based firm's Bud Light marketing vice president  unveiled a tribute to Dylan Mulvaney, a transgender "influencer" who was invited to the White House by President Biden. Not only did Bud Light tout Mulvaney's transition, but the ad guru preceded to bash its customer base.

The veep insulted Bud Light's top consumers, calling them too "fratty," an apparent reference to beer swilling males. The marketing veep gushed that attracting transgender males would expand the customer base, boosting sales.  The decision may go down as the greatest marketing blunder ever.

Compared to last year, retail sales of Bud Light nosedived 25% in the week ending May 13,  That surpassed the 23.3% slump in April. Anheuser-Busch InBev shares plunged 5%, leading to a loss of $6 billion in market value.  Several financial analysts downgraded the stock as sales skidded.

Anheuser is in full retreat. The V-P marketing is on leave as is her boss.   Executives are labeling the Mulvaney linkage "just one influencer, one post and not an ad." Bigwigs all the way to the top of the corporate ladder are making like Pontius Pilate, washing their hands of this smelly muck. 

In a retrenchment, A-B is wrapping itself in the flag.  The company is set to launch a line of camouflage aluminum bottles that promotes the "Folds of Honor" program, which provides scholarships for families of fallen and disabled military service members and first responders.  

For good measure, another A-B brand, Budweiser, is planning a launch of limited edition beer cans featuring images inspired by motorcycle manufacturer Harley-Davidson.  The LGBTQ activists are now threatening their own boycott of the firm for backing away from Mulvaney.  

The usual media suspects--NPR, The New York Times, Washington Post and LA Times--are serving up baloney calling out current Bud Light drinkers for being trans-phobic.  The media echo chamber pompously downplays the loss of market share as trivial to discourage product boycotters.

You could surmise the Bud Light kerfuffle might dissuade other consumer firms from embracing social issues.  Never underestimate corporate herd mentality.  Within weeks, Adidas debuted a transgender model posing in a women's bathing suit. There is a noticeable bulge in the crotch area.

The reaction has been swift among women who are increasingly angered by what they view as misogyny.  Transgender males are increasingly usurping female roles. Why deliberately alienate the people who buy your product?  Sound marketing has been scrapped for social issue signaling.

This is clearly not about sales. Transgenders are not a large, lucrative market. A Pew Research poll conducted in May, 2022, found that 0.6% of American adults are transgender. That is not a typo: 0.6%. Including non-binary adults inches the needle to 1.6%.

These firms are appealing to those who embrace the transgender ideology. Many are being cajoled by big investment firms such as BlackRock, State Street and Vanguard. Others are influenced by activist groups whose clout exceeds the number of members.  

In other cases, a corporation's employees  are increasingly goading leadership into supporting a social cause.  When the Florida legislature passed a bill prohibiting teaching sexual orientation and gender identity to elementary children, employees within Disney insisted the firm take a public stance.

Disney management acquiesced and stirred up a political hornet's nest.  An acrimonious war-of-words has ignited an ongoing feud between Disney and the state's Governor Ron DeSantis and the Republican legislature.  In the process, Disney has lost some of its family entertainment sheen.

Corporate political interference is nothing new.  A case in point: The CEO's of Delta Airlines and Coca-Cola, both based in Atlanta, voiced strong opposition a Georgia voting law in 2021, Despite the corporate pressure, the Republican Gov. Brian Kemp signed it into law.

Allegations of the law's effort to suppress voting proved to be patently false when Georgians turned out in record numbers to vote in the 2022 midterm elections.  Don't expect Coca-Cola or Delta Airlines to issue a mea culpa.  Corporate cowards never admit they were wrong.

Not too long ago corporate America was assiduously apolitical. Businesses lobbied state legislatures, Washington's politicians and local officials, often outside the public's view.  Corporate advertising was reserved for selling products or buttressing the firm's image with its customers.

The larger the firm today the more likely it will be fronting social and political issues.  CEO's feel insulated because few customers ever complain and boycotts have proven short-lived.  However, the Bud Light episode may serve as a red flag that the tide may be turning, if only slowly.

That would be a refreshing development for our democracy. Unelected corporations today carry as much clout as political parties to advance social and political positions.  Consumers hold the power to vote with their dollars against corporate influence. Now they need to use it.    

Opinion: America's Alarming Surge in Bad Behavior

What has happened to civility?  Fisticuffs erupt on airline flights. Rowdy fans are booted from sporting arenas. Road rage turns violent. Classroom scuffles are no longer rare. Office behavior ruffles workers. Online bullying spirals out of control.  Americans are seemingly seething with anger.

As personal conduct has cratered, the establishment blames our political divisions.  Stop and think.  America's politics are a reflection of its voters.  Not the other way around.  American history its replete with political nastiness.  What's changed is the behavior of its citizens.  

Another convenient scapegoat is the pandemic.  Social scientists claim Americans were cooped up so long that it was inevitable that once we emerged from our masked cocoon we would forget our manners. This theory hardly explains the rudeness that pervades our society.

While we are dismissing excuses, quit faulting the frenetic pace of everyday living.  Give me a break. Americans have never earned more, acquired more, spent more, traveled more, felt more entitled and indulged themselves more.  Somehow we believe that previous generations never faced a lick of stress.  

So let's dispense with any justification for incivility.  There is no legitimate reason for disrespectful, aggressive, harassing behavior.  At this point, you might be thinking, "Oh come on, some people have always acted up."  You're right.  But it has become all too common and too widespread.

When a flight attendant gets two teeth knocked out by a furious passenger, that does not reflect behavior even a decade ago.  The Federal Aviation Administration documents that complaints about airline passenger misbehavior is at an all time high.  And it's not improving. 

Just a few weeks ago, a grown man yelled and threatened flight attendants because a baby was crying.  Who gets enraged by an infant that cannot be soothed to your personal expectations?  An angry individual.  One who feels entitled to a flight cabin devoid of humans or at least little colicky ones.

Fan behavior at indoor and outdoor sporting events is turning uglier every day.  People, almost exclusively men, spit on players, throw water bottle missiles at their heads or dump a beer on an unwary player.  Assault and battery charges are a part of an increasing number of games.

Even company offices have evolved into dens of incivility.  A Harvard study conducted over the past 14 years has documented a steady rise in disrespect.  A total of 98% of workers reported experiencing harassment, rudeness, bullying and crude interactions.  The work culture is toxic.

In a strange dichotomy, a recent survey found 62.3% of workers report they are satisfied with their jobs.  Go figure.

Even neighbors get into ugly fights that escalate into violence. A San Antonio man accidentally dumped tree limbs in a neighbor's yard. A argument ensued and ended with a neighbor being stabbed.  Once neighborhoods were safe harbors.  Now ordinary disagreements detonate conflict.  

By comparison, neighborhoods are less intimidating than schools.  A recent report in Education Week counted more than 200,000 assaults by students against teachers in a two-year period.  In the most recent, a middle schooler cursed and attacked his teacher after she confiscated his cell phone.  

These are not isolated incidences.  Such outbursts have been reported in schools across America.  When youngsters feel emboldened to assault their teachers, there should be unholy outrage.  It is an indictment of parenting and schools.

And college age students are not much better behaved.  Speakers on campuses are hectored, shouted down and cursed for expressing viewpoints they consider offensive to their tender sensibilities. What's mystifying is this behavior is tolerated by administrations, which just invites more outrage.

Some experts link these spike in incivility at schools to the sewage known as social media.  Study after study has for years documented the aggressive, disrespectful behavior and harassment on Facebook, Twitter, TikTok and Instagram.  Youngsters rancor toward others online feeds anger offline.

Road rage has reached epidemic proportions.  The AAA Foundation for Traffic Safety released data that 80% of drivers "expressed significant anger, aggression or road rage" at least once during the previous 30 days. Road rages deaths have doubled in the last four years. What's fueling the rage?

Pent up fury is unleashed daily as human beings kill other humans. The media focuses on the instruments of death, failing to consider what roils a person to end the life of another.  More often than not irrational hatred, resentment and revenge motivate the slaughter of innocents, including children.

It is evil by any other name.  Yet society and the media sometimes paint the killers as victims.    

Why doesn't society care more about this simmering violent temperament that percolates the lives of many Americans?  It is a question that goes begging for answers and analysis.  We can't keep blaming mental illness for every killing.  What triggers a "normal" person to murder another?  

The root cause for these madness is elusive and complex.  There is no simple answer.  But one thing is certain, there is no longer a fear of punishment.  Young people and adults appear to be oblivious to the consequences of their actions.  The perpetrators act first without regard for the ramifications.

We live in an era when shared values are tearing asunder.  Society preaches personal values with no norm.  Individualism trumps common societal behavioral expectations. Another person's values are of no concern to an increasing number of Americans. They consider their values more righteous.  

Likewise, society renounces morality as a personal compass.  Our secular world rejects moral guideposts because it suggests a religion or a God controls our lives.  In fact, it is considered immoral to impose any morals on anyone. We each decide for ourselves what is moral and what is not.

Whatever your view on causes, we cannot ignore the alarm bells that our society is descending into chaos.  America can no longer dismiss worsening civility as some phase that will pass.  We need a national conversation about the breakdown of civility.  It it has to start with us. 

Biden's Plan To Takeover Auto Industry

In one breathtaking regulatory fiat, the Biden Administration revealed its plan to seize control of the nation's automobile industry. General Motors and Ford will no longer be free to sell cars and trucks consumers want.  The government will compel the auto firms to manufacture and sell electric vehicles. 

The industry takeover is disguised as new Environmental Protection Agency (EPA) emission standards for automobiles and trucks.  The proposal authored by unelected bureaucrats would effectively force automakers to increase their sales of electric vehicles, while eliminating gasoline powered models.

Under the EPA directive, the agency anticipates that the emission standards will result in two-thirds of the vehicles sold in the U.S. to be electric by the 2032 model year.  The federal bureaucrats forecast the stringent standards will mean 46% of medium duty trucks would be electric.

The EPA directive, styled after California's punitive edict, stops shorts of outlawing gas-powered vehicle sales.  California's policy bans gasoline trucks and cars sales in the state by 2035.  The Draconian measure will lead to higher prices for electric vehicles and fewer consumer choices.  

Agency administrator Michael Regan bragged his proposal exceeds the administration's own 50%EV  target by 2030.  Environmentalists cheered the ambitious target but others warned the goal is unrealistically achievable.  Electric cars represented less than 6% of the total new vehicle sales in 2022. 

In nine years, the $1.53 trillion automotive industry will have to retool manufacturing and supply chains while building an ecosystem that doesn't exist at scale today.  But Washington's desk jockeys likely have never set foot in an automobile manufacturing plant.  They don't see any flaw in their scheme.

Office bureaucrats are impatient with the free market auto industry. Although the transition to electric vehicles is moving relatively fast, they believe auto makers are making too many gas models to satisfy customers.  Consumers are just too dumb to embrace electric, the bureaucrats surmise.

The feds are growing restless after offering generous tax credits for years to seduce customers into scrapping their gas vehicles for electric cars.  Taxpayers are footing the bill for this benevolence, which currently includes subsidies ranging from $2,500 to $7,500 depending on the electric model. 

The average cost of an EV in 2022 was $61,448 compared to $49,507 for a gasoline powered vehicle, according to GreenCars, an EV industry source.  The cost disparity would have been even more if Tesla had not lowered some prices by up to 24% last year.  Price remains a barrier to wide adoption

Administration officials claim there are 3 million EV's on the roads today, but data indicates the number is closer to 2 million.  In addition, there are currently 6.8 million hybrid (gas and electric) vehicles. EV's are a tiny number of the nation's 284 million vehicles. The average age of a vehicle is 12 years.

If the EPA successfully reaches its electrification sales goals, it will create a challenge for the nation's already stressed power grid. Experts believe a complete transition to electric vehicle will require as much as 1.25 trillion kilowatt-hours of electricity each year. It means increasing grid capacity by 30%.

Not to worry claim the green car crowd.  The government will issue rules on what day and at what time you can charge your shiny EV. This will ease the strain on the grid while ending the pretense of freedom of choice for consumers.  This should concern even New Green Deal activists.

The Biden electric revolution is a gift to China. The Communist nation has cornered the market on most of the rare minerals required to make electric car batteries.  The key minerals include copper, graphite, nickel, cobalt, manganese and lithium.  China has built a global dynasty of battery metals.

The World Bank estimates supplies of these key metals would need to increase by 500% by 2050 to meet the global electric vehicle forecasts.  That works out to 3 billion tons of these rare metals.  Mining those metals creates an environmental nightmare that Biden's troops never talk about.  

China already accounts for nearly 75% of global EV battery production.  Tesla will manufacture 40% to 50% of its cars in China this year, according industry sources. Ford announced earlier this year that it would collaborate with a Chinese supplier on building a $4.5 billion electric battery plan in Michigan.

It is beyond ironic that China, the world's top emitter of greenhouse gases, will reap the most benefit from the administration's top-down management of the electric vehicle industry.  Let that sink in.  

As if those obstacles are not steep enough, consider millions of electric vehicles traveling America with a sparse network of charging stations to provide juice for the batteries. Tesla years ago began building its own charging network with its own money.  How quaint--a private sector initiative.

Now the federal government has appropriated $7.5 billion of your tax dollars to build out a national network of EV chargers.  Democrats are already clamoring for $85 billion more. It will take more than several decades to match the ubiquity of gasoline stations on highways and roads in America.

The media echo chamber, led by The New York Times and The Washington Post, are in full throated support mode.  The media giants are publishing articles assuring skeptics that solutions will be found to solve the electric grid, rare mineral scarcity, charging stations and dependence on China.

Never bet against American ingenuity to create technological solutions to solve conundrums. But it will require years of research and development.  There are no magic bullets or shortcuts. Mandating electric cars before these issues can be solved is a recipe for an epic boondoggle.  

But if you say it out loud the New Green Deal activists will accuse you of denying climate science and wanting to end life as we know it on planet Earth.  Government has never been better than private industry at producing anything.  Which is why the Biden prescription needs a dose of reality.   

Trump Indictment: Justice Is Partisan Not Blind

Christmas came early for Democrats with the indictment of former President Donald Trump.  The party's irrational obsession with jailing Trump knows no legal or ethical bounds.  Proof is the feeble case cobbled together by Manhattan District Attorney Alvin Bragg.

Most honest legal scholars, liberal pundits and even the left's media darling The New York Times have labeled the case flimsy.  Bragg, who campaigned on prosecuting Trump, fashioned his case on a dubious legal theory. The indictment is littered with prosecutorial holes  and sidesteps the statute of limitations.

Bragg, who owes his election to George Soros, let the case against Trump lay fallow for nearly 18 months before unveiling the 34-count felony indictment. Bragg burnished his Democratic Party political credentials with the first ever criminal prosecution of a former president in the 245-year U.S. history. 

The news media salivated at the prospect of a Trump mug shot.  But they were disappointed after the former president appeared in a Manhattan court to plead not guilty to falsification of business records without ever being photographed in an orange jumpsuit.  

Utah GOP Sen. Mitt Romney, who twice voted to impeach Trump, awkwardly sided with his nemesis. "The prosecutor's overreaction sets a dangerous precedent for criminalizing political opponents and damages the public's faith in our justice system." You have to work hard to make Trump a martyr.

UCLA campaign finance law expert Richard Hasen was quoted in Politico as writing: "In this vein, it is very easy to see this case tossed for legal insufficiency or tied up in courts well past the 2024 election before it might go to trial."

Bragg's prosecution is strictly political. His predecessor, Cyrus Vance, Jr., reviewed Trump's alleged hush-money payments and opted not to indict.  The prosector for the Southern District of New York chose not to pursue the case in 2019.  The Federal Election Commission reviewed the allegations in 2021 and did not take action.

A member of the Manhattan DA office resigned in February, 2022, after Bragg refused to charge Trump with financial crimes.  The attorney, Mark Pomerantz, was championing the investigation into the former president.  Bragg deemed the facts did not support an indictment.

Six years have passed since the underlying conduct alleged in the indictment, exceeding the statute of limitations. More puzzling is how Bragg elevated the "falsification of business records" charges into felonies, a move that required evidence Trump attempted to conceal a second crime. 

Bragg left the question of the second crime dangling without explanation. He  refused to offer specifics.  Instead he promised reporters to reveal "more evidence made available to the office and the opportunity to meet with additional witnesses."   In other words, he has nothing.   

So what changed Bragg's mind about prosecution?  The view here is Bragg was pressured by Democrats to file charges.  The timing of the indictment is suspect.  With the presidential campaign drawing closer, Biden's handlers have made it clear they are frothing over a rematch against Trump.

What better way to hamstring Trump than the public spectacle of an indictment?  The former president already faces the prospect of a host of legal problems.  But those may take months or longer to reach fruition.  Democrat political calculations favored a Bragg action, far removed from Washington.

The Department of Justice is investigating Trump's handling of secret documents. But a DOJ indictment would have smacked of partisanship. Better to have an administration outsider deliver the judicial coup. This charade smacks of a banana-republic style political vendetta.    

Most Americans had never heard of Alvin Bragg until his bombshell indictment.  He was elected Manhattan DA in 2021, riding to victory by outspending his opponents.  Billionaire Soros funneled at least $500,000 to one Bragg's political action committee and donated $1 million for voter turnout. 

Bragg is just one of a bevy of Soros district attorney serfs financed by the Hungarian-born businessman.   Soros has backed candidates who coddle criminals in the name of judicial system reform. It's no coincidence that Soros also was a mega donor to the Biden presidential campaign. 

Bragg has earned the moniker of a soft on crime district attorney. The data backs up that sobriquet. Bragg in 2022 downgraded 52% of the felony cases to misdemeanor, compared to his predecessor's rate of 39%. Even the cases Bragg prosecutes end in not guilty verdicts.

Records show that his office's conviction rate is 17%.  There have been high profile instances of repeat offenders committing felonies after Bragg granted bail. No wonder crime is soaring in Manhattan this year. Crime rates are up 38% in Manhattan South and 17% in Manhattan North. 

Bragg bellowed no one is above the law in justifying the Tump indictment.  In Bragg's Manhattan, some convicted felons receive better treatment than a former president. 

The non-stop, one-sided coverage of the indictment is succor for Democrats.  But using a Manhattan DA as a Trump foil may backfire. Republicans also can find friendly district attorneys willing to bring indictments against Hunter Biden, for instance.

Politically motivated prosecutions of campaign opponents by either party is a bad idea. Anyone who claims to want to preserve democracy should be the first to condemn Bragg's prosecutorial hijinks.   

An Anatomy of a Banking Crisis

The abrupt collapse of the nation's 16th largest bank sent shudders throughout the industry.  Fears escalated after the crisis spread to other institutions, raising the specter of a banking contagion.  The instability is raising questions about the safety and liquidity of all banks, both in the U.S. and overseas.

The chain reaction began after Silicon Valley Bank received a visit from Moody's Investors Service on March 2.   Moody's team informed the bank it was considering downgrading the bank's rating.  SVB moved quickly, announcing it was raising $1.75 billion in capital on March 8.

The news sent the bank's stock in a tailspin as investors worried about the institution's solvency. Panicked customers began withdrawing deposits at lightning speed. In a last ditch effort to save the bank, executives sold $21 billion worth of long-term securities at steep discounts.

Less than two weeks before the looming failure, SVB executives sold millions of dollars in company stock, according to filings. Chief Executive Officer Greg Becker unloaded $3.5 million in SVB stock.  He wasn't the only top brass to act. Chief Financial Officer Daniel Beck dumped $575,180 in shares.

Insiders knew the bank was doomed. Likely, bank chatter leaked to major depositors who spurred the run.  On a single day, March 9, clients withdrew $42 billion in deposits.  When SVB ran out of funds, regulators stepped in and shuttered the 40-year old bank, making it the largest bank failure since the 2008 financial upheaval.    

Silicon Valley, a darling of the tech start-ups, catered to venture capitalists, entrepreneurs and the wealthy. Newly minted businesses looking for investors ran into the welcoming arms of SVB bankers. The bank featured a blue-ribbon board, many with political connections to Democrats.

Unlike traditional commercial banks, nearly 95% of SVB clients had deposits of more than the $250,000 limit guaranteed by the Federal Deposit Insurance Corporation (FDIC).  The bank's dependence on outsized, uninsured deposits meant a turbulent run would put the institution in jeopardy faster than most banks. 

After regulators assumed control of the bank, it became clear mismanagement wrecked the institution.  Executives stowed deposits in long-term assets, including U.S, Treasury notes and bonds.  Asset values plummeted as interest rates rose. The sinking values created a classic asset-liability mismatch.

Bank executives failed to hedge the risks inherent in their low yielding asset holdings.  This would have given the bank some protection on its bond portfolio.  But the bank's chief risk officer, who presided over the bond-buying spree, left in 2022 with a $7.1 million severance package, according to SEC filings.

For eight months, the bank operated without a risk officer, whose responsibility includes analyzing the institution's exposure to portfolio risks and assessing the bank's ability to weather adverse scenarios. As current market value of the bank's bond portfolio dipped, executives should have acted quicker to bolster capital. 

The FDIC swooped in and announced it would guarantee clients deposits, including those that exceded the government insured $250,000 limit.  This was good news for large tech clients, such as Etsy, Rocket Labs and Roku.  However, bailing out uninsured deposits set a worrisome precedent. 

Following the SVB demise, Signature Bank in New York crumbled. At the time, the FDIC had a total of $128 billion in its insurance fund. Those reserves could not accommodate many more bank hiccups.  

Treasury Secretary Janet Yellen hoped the bailout of depositors at both institutions would stem the banking turbulence. She stepped into the breach, assuring the country the banking system was safe.  Yellen appeared to signal the FDIC would continue to bailout uninsured deposits before later hedging.    

As bank stocks and the overall markets nosedived, President Biden tried to soothe the public's growing fears about banks. Then Silvergate Bank, a crypto friendly institution, succumbed.  Panic soon ensnared regional banks, including First Republic Bank.  Eight banking behemoths, led by JP Morgan Chase, shipped $30 billion in cash to avoid a liquidity catastrophe at First Republic. 

Republic's upheaval triggered anxiety among customers of regional and community banks. Federal Reserve data shows that deposits at small banks--defined as those smaller than the biggest 25--dropped $119 billion. Meanwhile, deposits at large institutions soared $67 billion in the week ended March 15.  

Fleeing clients forced Charles Schwab, which operates the nation's tenth largest bank, to reassure its client base.  The move was critical after Schwab  disclosed it had $11 billion in unrealized losses on its bond portfolio. It was a sign that size no longer matters when 20% of your customers yank deposits. 

Frantic bank customers plowed $5.4 trillion in deposits into money-market mutual funds, the fastest pace since the start of the pandemic.  As deposits dwindled at a rapid clip, a stampede of banks borrowed an average of $117 billion each day for a week from the Federal Reserve's discount window. 

When the crisis spread overseas to 167-year-old Credit Suisse Bank, Switzerland, and Germany's largest bank, Duetch Bank, it heightened concerns of a full-blown global banking pandemic.  Reassurances are being drowned out by the realities of banks failure to adjust for portfolio risks.

Jittery Americans with bank deposits began to wonder aloud: "Could this contamination spread to my bank?"

"No bank is immune from a deposit run.  I can say that unequivocally," says Howard Manning, a former Federal Reserve bank examiner whose career in the banking industry spans five decades.  "Banks cannot turn illiquid assets fast enough regardless of size.  We're going to see more turmoil."

Some in Congress, most notably Massachusetts Senator Elizabeth Warren, are blaming the bank debacle on Federal Reserve Chairman Jerome Powell, who has overseen a regime of steady interest rate hikes.  Manning calls the senator's criticism disingenuous, since Warren voted for trillions in federal spending, fueling runaway inflation,

"The Fed signaled in 2022 that it would have to begin raising interest rates," Manning reminds. "From that point onward, banks and financial institutions should have been hedging their long term assets.  Bankers should have written down the value of bonds as interest rates rose.  It was total mismanagement."

Whether you agree with the pace and timing of Powell's interest rate hikes, the Fed can hardly be blamed for addressing blazing inflation. Trillions of dollars in federal spending forced the Fed's hand. All that money sloshing around the economy triggered too many dollars chasing too few goods.

The fallout of the banking plague will hit every American.  With FDIC reserves dwindling, banks will be on the hook for higher insurance premiums.  Institutions will pass along those costs in the form of increased fees to customers. You will be paying for the bailouts, irregardless of the claims to the contrary by Yellen and Biden.

Americans, especially small businesses and entrepreneurs, will find it more difficult to secure bank loans on favorable terms.  Banks inevitably will implement more stringent lending standards to protect capital.  The result will be a slowing of an already wobbly economy.

Management mistakes usually are the culprit when financial institutions go belly up. Blaming the Federal Reserve is a cop out. Bank examiners, especially those at the San Francisco Fed, also are accountable for not raising alarms sooner.  But the financial system is showing some cracks.    

Biden's Bloated Budget and Massive Tax Grab

• Biden's fiscal 2024 budget will increase deficits and hike the national debt
• His tax proposals for business will result in offshoring of operations
• The president's plan targets energy production which will drive up prices
• The tax scheme includes a dubious effort to tax phantom income 

The most shameless political gimmick is to shriek: "Tax the rich!" Pandering politicians know few Americans will argue with the logic. Taxpayers dream soaking the wealthy will lower their own taxes. It never does. Still bashing billionaires is a sure-fire re-election gambit.

President Biden recently unveiled his massive $4.7 trillion tax plan with an eye toward his 2024 campaign. His complex proposals are designed to roll back President Donald Trump's tax cuts while daring Republicans to oppose a tax blood-letting of big businesses and billionaires

The president's strategists are counting on Americans tax illiteracy. The top one percent of America's wealthiest earners paid 42.3% of all federal income taxes, according to the most recent data.  The top 50% paid 97.7% of federal individual income taxes.  The bottom half paid 2.3%. Facts matter. 

Despite Biden's rhetoric, America's most prosperous are paying their fair share.  It is disingenuous and not factual to claim otherwise.  If the president was honest with Americans, he would simply admit his   massive tax hikes are needed to fund his deficit-busting $6.5 trillion federal budget for fiscal year 2024. 

Biden's claims his budget will cut deficits is a sham. The non-partisan Congressional Budget Office projects deficits will average $2 trillion per year from 2024 to 2033. Since his first budget, Biden's spending will increase the nation's public debt to $50.7 trillion by 2033, nearly 106.3% of GDP.

Under the Biden tax plan, American businesses and high-earners would pay among the highest taxes in the developed world.  Although the president tosses word salads about going after those filthy rich billionaires, his tax increases are aimed at Americans earning $400,000 and up.   

The non-profit, independent Tax Foundation weighed the impact of the proposals against tax rates of member countries in the Organization for Economic Co-operation and Development. The comparisons underscore the titanic nature of Biden's tax regime. 

America's corporate marginal rate on corporate income would increase from 25.7% to 32.2%. The OECD average, excluding the U.S. is 22.8%.  The combined integrated rate on corporate income would climb from 47.3% to 66.9%, compared to the OECD average of 41.%.

This means U.S. firms will be at a competitive disadvantage with companies in other countries.  As past history shows, American corporations will be incentivized to move operations offshore where taxes are lower.  The result will be job losses in the U.S. at a time when companies are already cutting payrolls.

The plan raises the current top marginal rate on individual income to 45.4%, compared to the OECD average of 42.6%.  Many households earning $400,000 and over will face top tax rates of 50% when the federal rate is combined with state income taxes. 

The marginal tax rate is the amount of additional tax paid for every additional dollar of income. As an example, a 10% marginal rate means that 10 cents of every additional dollar earned is confiscated by the government.  An average tax rate is the total tax paid divided by the total income earned.  

The Biden tax scheme includes nearly doubling the tax on capital gains income from 29.1% to 49.8%.    Americans who sells stocks, bonds, real estate or other investments will have to give Uncle Sam almost one-half of any gains.  That will discourage individual investments in stocks. 

Perhaps, the most odious part of the Biden blueprint is a tax on phantom income.  This contrivance calls for taxing unrealized capital gains with a 25% minimum tax.  What this means is that if you hold investments that have increased in value, that amount will be taxed even though you haven't sold any.

Biden's daft plan also punishes the oil, gas and coal production sectors with $100 billion in tax increases. For example, his deal with the tax Devil includes repeal of expensing tangible drilling costs for labor, equipment, surveys and other items.

Those are just the highlights.  There are a myriad of other taxes aimed at businesses, the economic engine of the American economy.  Higher taxes on business are always paid by the corporation's customers through higher prices on products and services. 

The gross (pardon the pun) total of all those tax increases is $4.7 trillion.  That is the largest tax hike in history in terms of dollars.  Media fact-checkers are trying their best to cover up for Biden by claiming it is not the largest if you compare the new taxes as a percentage of GDP.  

However, even if you accept the fact-checkers skewed logic, the only plan that ranks higher as a percentage of GDP is the Revenue Act of 1942.  Those taxes were needed to pay for the military buildup after the U.S. declared war on Japan and Germany.  That makes the comparison unreasonable.

If President Biden is serious about tax fairness, he should offer a plan to simplify taxes. His reform does the opposite. Even worse, the tax hikes on businesses will cripple economic growth, encourage U.S firms to ship jobs overseas, raise energy prices and burden consumers with even higher prices.

The president's political budget and tax stunt deserve an ignominious burial in the halls of Congress.  Then serious work can begin on a bipartisan fiscal budget that maintains tax equity, reduces deficits and supports a prosperous economy for all Americans.