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US politicization is the problem: CNN

By Al Mayadeen English
Source: CNN
14 Mar 2023 16:41

The main issue in the US is the hyper-politicized reaction to the drama in Washington.

President Joe Biden meets Australian Prime Minister Anthony Albanese at Naval Base Point Loma, Monday, March 13, 2023, in San Diego. (AP)

The collapse of Silicon Valley Bank has proven one thing for certain: the United States' greatest systemic risk is not in its banking system but in its polarized politics.

The Biden administration's frantic effort to help the California bank appears to have been effective. On Monday, there was no bank run because the federal government chose to guarantee deposits at SVB and another failed bank, though future failures cannot be ruled out.

However, the hyper-politicized reaction to the drama in Washington and on the Republican 2024 campaign trail, in which key figures twisted the situation to further predetermined political goals, indicated that if a true financial crisis does erupt, it may be beyond the government's ability to fix it.

How secure is the banking system?

Several prominent Republicans, led by Florida Gov. Ron DeSantis, a potential White House candidate, swiftly blamed the bank's failure on a supposed obsession with "woke" socially progressive investments rather than its questionable financial strategy.

Other Republicans, such as former South Carolina Gov. Nikki Haley, a declared 2024 candidate, chose to open a new front in the perennial conservative-liberal debate over the role of government in the economy.

“Joe Biden is pretending this isn’t a bailout. It is,” Haley said on Monday.

Furthermore, two previous Democratic presidential candidates, Massachusetts Senator Elizabeth Warren, and Vermont Senator Bernie Sanders have renewed their calls for increased banking sector regulation. And when trouble arises, some Democrats, including President Joe Biden, have turned to an increasingly common gambit: blaming it on Trump and his regulatory purges, according to CNN.

The SVB debacle is not the first time in recent weeks that a catastrophe has been followed by a bitter and polarized blame game within hours.

The derailing of a freight train in Ohio last month sparked an organized GOP effort against Transportation Secretary Pete Buttigieg, a former and potentially future Democratic presidential candidate. Democrats, for their part, blamed Trump's regulation rollbacks, according to CNN.

While the former president's loose rules may make accidents more likely in general, the regulations in issue do not appear to have applied to the train that derailed in East Palestine, Ohio. Such differences, however, would be lost in campaign rhetoric. The trend repeated itself in February when a suspected Chinese spy balloon floated across the United States.

The crisis revealed deep divisions among US leaders and prompted yet another blame game, raising doubts about Washington's ability to agree on a coherent policy on the most pressing foreign policy issue of the century: a brewing Cold War with China, according to CNN.

Growing US divide on country's future

Earlier this year in January, a CBS News/YouGov poll showed that most US citizens are deeply concerned about the country's future under President Joe Biden in 2023.

71% of Americans said they are "scared" or "angry" about the country's course in 2023. 49% indicated they are "scared," while 22% said they are "angry". Only 11% stated they were "enthusiastic". Only 7% say things are doing very well under Biden's leadership. 30% stated things aren't going well.

On the economic situation, 56% of respondents believe Biden's economy is deteriorating. Only 21% believe things are improving.

It is worth noting that Bloomberg has recently estimated that inflation will cost American households an extra $5,200, or $433 per month, in 2022. According to Moody's, such a figure would be $5,520 per year.

Respondents also said that Congress' main priority should be to control inflation (76%), reduce crime (63%), and move toward American energy independence (54%).