The venture capitalist's dilemma

This seems to be the telling quote - and is to me the point.

We are missing democracy in control over at least half of the spend in society. It's going to be weird, but we need democratic control over companies, as well as government. No idea what it's going to look like - but we'll figure it out.

Do more wealthy VCs and firms have more tooling available to be able to properly vet their capital storage houses before deciding to reside there? Sure. But unless we decide that banks should be public facilities with the aim of strictly housing money, I’m not sure any amount of vetting could actually guarantee a depositor’s safety at a bank. And I just don’t think it should be your fault if your bank’s investment branch are nincompoops. You have no control over that, and certainly no degree of control from a quarter to quarter standpoint where the personnel of your bank might shift and change far past your vetting.

So would I have lost sleep if VCs lost their deposits? No. But am I glad they were made whole, even if I think they shouldn’t have that much money in the first place? Yes.

1) This is presenting a bank run like it is a bad outcome for the people involved. It isn't obvious why that would be so; SVB is now one of the safest banks to park money in, and the dust hasn't settled but it seems plausible to me that the bank equity holders and directors are part of some incestuous Silicon Valley relationship where they are also major equity holders in the companies banking at the bank - ie, they've benefited hugely from the de-risking even if nominally they are getting wiped out.

2) "No libertarians in a bank run" - what, did libertarians suddenly become self-sacrificing when I wasn't watching? Libertarianism is recognising that people shouldn't be forced to pay taxes to fund these bailouts and that people should be allowed to avoid the dollar while conducting business if they wish. If the game is set up so that everyone rich gets a bail out, you'd have to be an idiot not to take the bailout. Since these libertarians aren't idiots, they took the bail out. They aren't dignified, sure, but they never pretended they were going to hold themselves up as sacrifices.

3) "the Fed’s not-a-bailout of Silicon Valley Bank and Signature Bank seems ultimately to be the right choice "

I mean, if you concede that then ok but is anyone naive enough to believe that the wealthy took everyone else's money hostage by accident? It has been clear for a decade that as long as it is a crisis rich people will get free money. Therefore, the powerful have arranged their affairs so they won't lose money except in a crisis. The easy approach is letting the rules play out to their logical conclusions. People overestimate how important the banking sector is, it makes more sense to plan how to transition through a collapse and rebuild it than it does trying to hold up all the idiots currently in charge of all the important decisions. They aren't competent, that is why the system keeps trying to purge them!

Note the remarkable resiliency of the crypto system because it keeps jettisoning all the parts that go bust without rescuing them. Bitcoin's value is more resilient than the banking system right now sans-bailouts.

Only when looking in hindsight.

Unless those extremely wealthy people knew that in the eventuality of a bank run the government would offer them shelter, as the government normally does for the ruling class. But that is not in a sense part of her criticism?