The last free post*

*Ok, that's a lie, I'll still do free Bits and Bobs and the occasional Really Important Thing. But, friends, I'm going paid. Enjoy this last ride!

First, I want to say a resounding thank you to all of you readers who have pledged actual money for this newsletter, who have told me that you are in fact willing to pay for these insights and ramblings and recommendations and rants. I am humbled, grateful, and committed.

Let’s set some expectations! I intend to use the paid newsletter to dig into climate-related insights, advice, consumer trends, finance and investment trends, solutions and the occasional rabbit hole (like how turning climate into a culture war is just bad business and how we got here). Also, tips and tricks from my personal quest to decarbonize and probably an excessive amount of conversation about EVs. If you’re new here, you should know this now: I’m a car geek.

Bring me your EVs, friends. Bring them all to me.

I also plan to keep writing about tech stuff, writ large, and culture stuff, because I can’t help it, and TV and book recommendations and my plan is to keep a lot of that stuff free, because I do just like to talk to you sometimes.

And with that in mind, can we talk about SVB for a minute?

The Transcript @TheTranscript_

@buccocapital Powell on $SIVB: "At a basic level, Silicon Valley Bank management failed badly. They grew the bank very quickly. They exposed the bank to significant liquidity risk and interest rate risk. Didn't hedge that risk...it's clear we do need to strengthen supervision & regulation"

Obviously, in these moments, there are a lot of calls for regulation and new rules. Supervision, blah blah blah. The rest of the conversation from here until eternity will be about whether there should be new regulations, whether the old ones were enough or not enough, whether rolling back some of them caused this behavior, etc. etc. and it will be political and business football that completely misses the larger point.

We keep confusing regulation with accountability.

We all know the story about the 2008 financial collapse at this point, which led to a bunch of new rules, most of which just made it harder for people to get loans. And no bank CEOs and hardly any high-ranking members of the finance community went to jail. I actually believe this started a crisis of accountability in this country that persists to this day, and it engendered so much anger and resentment among ordinary Americans that a populist rebellion in the form of one Donald Trump was basically inevitable.

And now we have a bank that failed arguably because its executives failed at their one big job, which was managing risk, and we’re still talking more about regulation than accountability. Yes, some executives were removed from their position at the bank. I love to hear President Biden saying bank executives who screw up this badly should be banned from banking, and that we should claw back stock sales and bonuses and other compensations who run their business into the ground and leave either other banks, taxpayers, or depositors holding the bag.

But he had to ask Congress to even make that possible because currently, we don’t actually have a legal structure that enforces accountability like that! And as Jesse Eisinger wrote so infuriatingly well about in 2017’s “The Chickenshit Club,” prosecutors in this country don’t have a lot of appetite or will to come down hard on white-collar crime and corruption.

As a pretty obvious result, we have a lot of white-collar crime and corruption, and it costs our economy hundreds of billions of dollars and contributes to all sorts of other knock-on problems, including leading to rules and regulations that actually hurt individuals and small businesses more than they hurt white-collar wrongdoers.

Want to raise the amount of FDIC deposit insurance? That’ll be passed to consumers in the form of either higher fees or lower savings rates. Although it’s true that taxpayers won’t bear the cost of the intervention that guaranteed that SVB depositors got all their money back, the pool of money that was fronted to those depositors came from bank fees. From CNBC:

The Deposit Insurance Fund is part of the FDIC and funded by quarterly fees assessed on FDIC-insured financial institutions, as well as interest on funds invested in government bonds.

It’ll be a tangled web, but you can bet that somehow, somewhere, some future junk fee is going to show up on our bank statements to help pay for this.

You know what seems simpler than any of that?

The executives should get in actual trouble.

I’m not Little Miss Law and Order over here, but for crying out loud, sometimes the simplest solution is the best solution, people. Instead of arguing over whether the repeal of byzantine, hard-to-enforce, easy-to-loophole rules is the problem and introducing some more byzantine, hard-to-enforce, easy-to-loophole rules that will inevitably get lobbied out and watered down, what if like, stay with me here, people who cause great financial harm get fined, lose their money, and, where appropriate, get prosecuted?

Regulations are not the same thing as accountability, and we need to reject the framing that more rules are the answer, when enforcement is the real answer, and a handy deterrent to boot. Do the crime, do the time.

Bits and Bobs:

TV: I caved. Shrinking is the best. Although it did cause me to have a moment of paranoia about how my therapist perceives me. Hm. I asked him and he dodged. I guess that’s professional of him, but I can’t be the only one asking.

Books: Hooboy. I just read Clade by James Bradley and you’ll know more why soon but let’s just say it imagines a climate future that is a little too real, given the IPCC report and the 12th atmospheric river (actually maybe the 29th atmospheric river depending on how you measure them?) to hit California and the game of car-Frogger I played dodging downed trees and power lines the other day going to and from school.

And honestly, in terms of activity that isn’t constant conversations with people and figuring out the ins and outs of starting a company and networking and going to things and making lists and burn/runway spreadsheets, I don’t have many. But I will leave you with this one thing: Logo.com is a literal godsend.

More to come, friends, and I’ll see you on the other side of the paywall!