Political author Dick Morris waged on Newsmax that the rush to rescue depositors of Silicon Valley Bank or, more precisely, a bank directly associated with Silicon Valley, which he terms as the "Democratic stronghold of the world," is as big a "crony payoff as you possibly can have."
"I think that the Silicon Valley Bank is enjoying a charmed life because it's in Silicon Valley," Morris told "American Agenda" on Monday.
"It's the Democratic stronghold of the world. And 99% of their people are probably Democrats and depositors that raised hell they're all democratic donors, so this is as crony a payoff as you possibly can have."
Morris's statement comes after Treasury Secretary Janet Yellen proclaimed to CBS's "Face the Nation" on Sunday that the government's assistance to depositors is not a bailout, which some experts have deemed a game of semantics in order to quash fear of spreading contagion.
"We're not going to do that again," said Yellen, regarding the 2008 financial crash. "But we are concerned about depositors and are focused on trying to meet their needs."
In a recent report from ABC, "the Federal Reserve, Treasury Department and Federal Deposit Insurance Corporation (FDIC) announced Sunday that they will make additional funding available to ensure all Silicon Valley Bank deposits, both insured and uninsured, will be paid in full."
The FDIC relies on banks paying an insurance premium, in case of such collapses, and is responsible for insuring deposits in the event of a bank failure. However, it does not have the authority to bail out a failing bank.
But if a bank becomes insolvent — which Silicon Valley Bank has, according to officials from the California Department of Financial Protection and Innovation — the FDIC's role is to take over the bank, sell off its assets, and use the proceeds to pay off the bank's creditors, including insured depositors.
"The precipitous deposit withdrawal has caused the [Silicon Valley Bank] to be incapable of paying its obligations as they come due, and the bank is now insolvent," the California Department of Financial Protection and Innovation wrote.
In other words, the FDIC is indirectly funded by taxpayers, as the U.S. Treasury is ultimately responsible for providing financial support to the FDIC, if needed.
Nonetheless, President Joe Biden stressed on Monday that "no losses will be borne by the taxpayers. I'm going to repeat that — no losses will be borne by the taxpayers. Instead the money will come from the fees that banks pay into the Deposit Insurance Fund."
© 2025 Newsmax. All rights reserved.