Republicans have a scapegoat for Silicon Valley Bank’s collapse: ‘Woke banks’

Right-wing media and GOP officials falsely turn to catch-all boogeyman after historic financial failure

Alex Woodward
New York
Monday 13 March 2023 22:43 GMT
Donald Jr rants at ‘woke’ bank after his business account abruptly shuttered

For months, right-wing media figures and Republican elected officials have blamed a “woke” agenda for what they perceive is the collapse of American institutions, from its schools and workplaces to the banks that facilitate their businesses.

The historic failure of Silicon Valley Bank is likely the result of a host of compounded factors that have nothing to do with so-called “wokeness,” from Donald Trump-era cuts to regulations that were put in place during the last financial crisis to the bank’s untenable concentration in an explosion of venture capital firms and tech startups as it careened into reality, rising interest rates and panic.

Yet Republican lawmakers have continued to return to their catch-all scapegoat – using “woke” as an umbrella term for anything related to diversity, progressive political platforms, LGBT+ inclusivity, antiracism initiatives or environmental activism – while advancing a nationwide legislative agenda singularly devoted to its destruction.

On Fox News on 12 March, House Oversight Committee chairman James Comer called SVB “one of the most woke banks” because of its investment in “ESG-type policy,” one of two acronyms along with “DEI” that have dominated the GOP’s war against “woke”.

Former Trump adviser Stephen Miller called on House Republicans to subpoena SVB officials to learn how much time and money was spent on the “scams” of environmental, social and governance (ESG) and diversity, equity and inclusion (DEI) initiatives.

“SVB is what happens when you push a leftist/woke ideology and have that take precedent over common sense business practices,” according to Donald Trump Jr, who blamed a “woke bank” after one of his business accounts was briefly and mistakenly offline earlier this year.

Home Depot co-founder Bernie Marcus baselessly asserted on Fox News that “everybody is focused on diversity and all of the woke issues and not concentrating on the one thing they should, which is shareholder returns.”

A columnist for The Wall Street Journal even claimed that the bank “may have been distracted by diversity demands,” despite a board that is overwhelmingly white, wealthy and less diverse than that at any of the nation’s top five banks, according to their own annual reports.

Black Americans invoked the term “woke” to signal awareness of racist patterns and systemic abuse, but the word was largely lost meaning as the American right reappropriated the term as a boogeyman.

Chris Rufo, a surrogate for Governor Ron DeSantis and an architect of the right-wing war on “critical race theory”, admitted the goal has been to “recodify” the term “to annex the entire range of cultural constructions that are unpopular with Americans.” Following a wave of copycat legislation aimed at “critical race theory” and restricting speech in classroom and workplaces, GOP state lawmakers across the US have introduced proposals to dismantle “DEI” and “ESG” initiatives using similar rhetoric.

In a speech in October, the former president railed against “big banks like Chase and Bank of America” who have “done much less for the Hispanic community than they should” because they have “gone woke”.

“And they should be penalised very severely for it,” he added. “The banks have let the community down, let the country down.”

After PNC Bank accidentally closed one of his business accounts earlier this year, Donald Trump Jr took the stage at the closely watched Conservative Political Action Conference to blame a “woke” opeation for the outcome.

“The Left doesn’t think you should be able to exist, much less thrive, in society,” he wrote on Twitter. “It should be illegal to discriminate based on political affiliation!!!”

“Woke corporations are using their terms and conditions like a guillotine over the head of every conservative entrepreneur,” his business partner Taylor Budowich told Fox News.

Trump Jr told Fox that his news aggregation app was intended to “provide curated stories that are being silenced and or suppressed by big tech and the mainstream media”.

“However, as this shows, it’s not just the media that’s become plagued by the woke agenda,” he added. “It’s banks, it’s the entire corporate America.”

The New York Post also suggested that SVB collapsed while a UK-based financial risk management chief developed company initiatives for LGBT+ inclusivity. Jay Ersapah was not in the US, however, and there is no evidence that her role had anything to do the company’s failure.

Nevertheless, far-right Georgia congresswoman Marjorie Taylor Greene claimed that “the fools running the bank were woke and almost became broke.”

Two months before Hurricane Ian swept parts of Florida in one of the state’s worst disasters in decades, Governor DeSantis called ESG a “woke ideological agenda”. The governor – whose book calls for the demise of “woke capital” – has also blamed “DEI and politics” for the collapse of SVB while his state uproots honest discussions of race and gender in state schools.

“I mean, this bank, they’re so concerned with DEI and politics and all kinds of stuff,” he told Fox News on 12 March. “I think that really diverted from them focusing on their core mission.”

In West Virginia, Republican lawmakers moved to prohibit institutions like BlackRock, Goldman Sachs and JPMorgan from entering into banking contracts with the state treasurer’s office or any state agency.

“We’re not going to pay for our own destruction, we’re not going to subsidise that,” treasurer Riley Moore told Fox News last year. “They have weaponised our tax dollars against the very people and industry that have generated them to begin with. That is why we’re pushing back against this ESG movement.”

Members of Congress who warned for years about the potential consequences of Trump-era moves that weakened regulations argued that rolling back those protections “contributed to a costly collapse,” according to US Senator Elizabeth Warren.

US Senator Bernie Sanders said the bank’s collapse is a “direct result” of the former president’s 2018 law effectively repealing parts of the 2010 Dodd–Frank Wall Street Reform and Consumer Protection Act.

“Let us have the courage to stand up to Wall Street, repeal the disastrous 2018 bank deregulation law, break up too big to fail banks and address the needs of working families, not the risky bets of vulture capitalists,” the senator said in a statement.

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