I suppose I should explain my “hierarchy of blame” first. For nearly any given problem I think the blame lies on in more or less descending order of importance:
- The civil bureaucracy
- The president, primarily for failing to provide proper guidance to the civil bureaucracy, bucking them if necessary
- Corporate management
- Human nature
You may wonder where the electorate is in this hierarchy. I’ve lived in Chicago for almost all of my adult life. Maybe it’s different elsewhere but when you have three (or ten) candidates running and they can all be expected to do the same things, I find it hard to blame the electorate. Take the Chicago mayoral election, for example. I realize it’s a sort of cottage industry for Republicans to chortle that Chicagoans are getting what they deserve but there hasn’t been a Republican candidate for mayor in some time. Maybe it’s tough to get elected as anything but a Democrat in Chicago but it’s impossible to get elected if you don’t run.
The grimly entertaining aspect of the whole Silicon Valley Bank debacle is how neatly it fits into that hierarchy. If Silicon Valley Bank had been more closely scrutinized, wouldn’t its exposure have been revealed? Why didn’t they receive more scrutiny? Congress raised the threshold for such scrutiny from $50 billion to $250 billion, presumably responding to the squawks of bankers who complained that they couldn’t make any money if they followed the rules. Why not blame the bankers? Because they were just doing what anyone would have done in their circumstances, based on their incentives. Just as in the financial crisis of 2007-2008 banks, depositors, and even Congress are just responding based on their incentives. We really need to change the incentives. That Congress values political contributions so highly is the root of much evil.