> I hope so. I don't expect the sellers to have done anything different. Corporations, however, have a responsibility to manage their finances effectively.Just so I understand correctly, if the seller has an LLC they made through legalzoom.com for their Etsy bowl business (which is very common and highly recommended), then does your sympathy for them immediately evaporate since they now have a “responsibility to manage their finances effectively”? Why exactly is the Etsy seller off the hook in this scenario? Is it a headcount requirement? If the Etsy seller LLC is 3 people (two sisters and their mom), now are they irresponsible for using Etsy? Are all those 3 person startups in YC different somehow? Only in that they make “useless” things and the Etsy people make “useful” things, and that translates to whether a corporation needs to be responsible?
> Here's the question. Now that this happened, do the rest of us just accept that this is how it works? Because if we do, nothing changes, and we just get to sit back and wait for the whole system to unspool again.
Accept that what is how it works? It depends on the solution. If the solution is providing temporary backstops to depositors so that a sale to another private bank can be more attractive, then I don’t think that’s anything earth shattering to accept? Especially considering it would probably result in a private solution happening faster at little to no cost to the taxpayer. If congress empowers the FDIC to claw back SVB share sales to help make depositors whole, I think that’s also not anything that people would have a problem accepting? Like part of the problem here is that completely different parties are lumped together and in this fury the only acceptable answer is “no help!” No one is arguing for SVB to be bailed out. Those shares are going to zero. That is a sufficient market result. Enabling a bunch of assets that still have value to be maximized to avoid the philosophical dilemma of our Etsy seller doesn’t seem to be the “end all” nightmare scenario it’s being chalked up to be here. If anything, maybe the focus should be on plummeting interest rates to zero making precisely the kinds of “full liquidity paid for checking accounts” become an endangered species in the first place. Or maybe then raising rates at break neck speed despite having questionable results on the inflation they’re targeting, while clearly affecting random pieces of the economy.
> Or, we could stop treating the machine in California like it's better than a Vegas slot machine for most players and start building something better.
It seems like choosing a random 30% of Silicon Valley companies to put in hard mode is a close approximation to the Vegas slot machine than fad imitating zero interest checking accounts that were in no way high risk irresponsible investments that had the chance to wildly benefit the depositors if the bet would have “paid off” vs. if it crashed to zero. Especially given the high likelihood that there are sufficient assets to make depositors either whole or almost whole, it seems even more the case that those disproportionately affected will be workers, and not companies. Not to even mention the fact that those most responsible (Thiel) aren’t going to suffer, nor are the mega tech companies that can easily survive this, and may even end up just absorbing some of these companies and consolidating even more.
I am super curious as to what “something better” looks like though. Because right now, the world 6 months from now where a random subsection of tech and wine workers had their year ruined, while big tech companies and VCs are still doing just fine, doesn’t exactly seem like fertile ground for whatever amazing new system you have dreamed up.