Opinion by George F. Will: With the Silicon Valley Bank rescue, welcome to capitalism without risk
, treating the securities as though they were worth their original value — even though higher interest rates have eroded the market price of such bonds” . And the Fed might now abandon, as too risky, its actual job: fighting inflation with higher interest rates.Here comes capitalism without risk: profits private, losses socialized. Americans shall forgo the creativity of capitalism’s “” by avoiding the destruction.
Do not worry about moral hazard : Government will make Capitalism Without Hazard an entitlement for the innumerable entities government will deem too big to fail, for “systemic” reasons. This socialization of risk approaches a semi-nationalization of banking, so: Why should bank CEOs be paid more than civil servants?; its annualized rate is triple the 2 percent target the Fed’s fine-tuners seek.
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