Verdict with Ted Cruz - Don't Call It A ＂Bailout＂, But It's a Massive Big Tech & China Bailout

00:00:00.000 This is an iHeart Podcast.

00:00:02.560 Guaranteed human.

00:00:05.280 Welcome.

00:00:05.980 It is Verdict with Senator Ted Cruz, Ben Ferguson with you.

00:00:09.300 And Senator, the biggest news story of the week,

00:00:11.980 many Americans are concerned about their banks.

00:00:15.200 They're concerned about banking.

00:00:16.920 They're concerned about what's happened with the fallout of Silicon Valley Bank.

00:00:21.700 This wasn't a little bank.

00:00:22.940 This was a big bank.

00:00:24.220 It was one of the top three failures of my lifetime.

00:00:27.460 I want to get your initial reaction to this.

00:00:29.820 And what you've heard, at least from those in Washington,

00:00:33.280 that were supposed to be keeping an eye on this bank and many others every day.

00:00:37.040 Well, this has been a very chaotic time in the markets.

00:00:40.900 We've seen two different banks fail,

00:00:43.040 including the 16th largest bank in the United States, Silicon Valley Bank,

00:00:46.880 with $210 billion in assets.

00:00:49.640 That has called into question a lot of the financing for the tech industry.

00:00:55.540 It's called into question a lot of the financing for venture capital.

00:00:58.900 And it has potentially imperiled a significant number of mid-sized banks.

00:01:05.560 In response to this, the Biden administration rolled out a major bailout,

00:01:11.980 conveniently bailing out the politically connected friends of the Biden White House

00:01:18.000 in a way that will have lasting repercussions for the economy

00:01:22.880 and will almost certainly incentivize future bad conduct by other banks.

00:01:32.080 When you look at this from a standpoint of it being called a bailout,

00:01:36.700 a lot of people have been calling it that,

00:01:38.740 but this administration keeps saying this is not a bailout.

00:01:42.260 Is this a bailout?

00:01:44.080 Are the taxpayers going to have to foot the bill for this?

00:01:47.080 Is this a delayed bill for taxpayers?

00:01:49.780 How should the American people be reacting to this?

00:01:52.980 This is 100% a bailout.

00:01:55.460 And the Biden administration is spinning like crazy trying to pretend that it's not.

00:02:01.040 What they are arguing is the money, there's $120 billion in a fund that is paid by banks.

00:02:09.280 And they say, well, that's not taxpayer money.

00:02:12.140 Well, the last time I checked, banks are taxpayers.

00:02:14.820 Banks pay quite a bit in taxes.

00:02:16.380 Not only that, but the fees that the banks are paying into this fund,

00:02:20.580 they get from, in turn, extracting revenues from consumers.

00:02:25.840 And so it comes from you and me at the end of the day.

00:02:29.240 This money didn't grow on a magic money tree that the Biden administration has,

00:02:34.040 that they decided to spend well over $100 billion in response to this.

00:02:39.000 And here's what happened.

00:02:40.580 So Silicon Valley Bank has $210 billion in assets.

00:02:45.220 And a big chunk of its portfolio was held in securities and, in particular, long-term government debt.

00:02:57.520 And, in fact, it had the highest securities portfolio as a percentage of total assets of any bank.

00:03:06.440 And it took long-term government debt.

00:03:10.460 But then the Fed's policies, raising interest rates, made that government debt, made those bonds go down in value about 20%.

00:03:21.340 And what happened is that the bank was required to mark-to-market those securities at their current valuations.

00:03:31.060 Now, if it held those government bonds to maturity, it would get the full payout.

00:03:37.060 But they're worth about 20% less because the interest rates they were taken out at are significantly lower than where interest rates are today.

00:03:47.540 That, in turn, caused an old-fashioned run on the bank, which is depositors, and, in particular, venture capital companies and tech companies, began removing their funds en masse.

00:03:59.180 And it was one after the other after the other that began pulling their funds out.

00:04:05.240 Now, look, we all know from classic movies like It's a Wonderful Life that a bank doesn't have all of the deposits just sitting there in cash,

00:04:16.080 that it, in the case of an S&L or a mortgage bank, it is loaning them out.

00:04:23.520 In this instance, the bulk of the funds were in securities, including, in particular, both government debt and mortgage bonds.

00:04:32.820 And so when a ton of the depositors are saying, give me my money back, they ran into real trouble because there was a liquidity mismatch.

00:04:42.280 In other words, the assets they had available to give the depositors back were less than the demand from the depositors to get it back.

00:04:52.380 And so California stepped in and shut the bank down on Friday.

00:04:59.240 And what happened next was a series of things.

00:05:03.620 So one consequence, the FDIC, the Federal Deposit Insurance Corporation, insures deposits up to $250,000.

00:05:13.640 So if you or I have our checking account or savings accounts, most of us presumably have less than $250,000 in our checking or savings accounts.

00:05:23.140 Those are entirely insured by the government.

00:05:25.620 And that's true for anyone that has less than $250,000.

00:05:28.780 That's also true for smaller businesses, for mom and pop businesses, smaller businesses.

00:05:32.780 But above $250,000, that is not supposed to be insured by the FDIC.

00:05:40.300 And in the case of Silicon Valley Bank, a massive amount, 96% of their deposits were uninsured.

00:05:50.200 In other words, it had a bunch of big, big, big deposit accounts way above the $250,000 insurance cap.

00:05:58.640 The folks that had deposits in Silicon Valley Bank that were above the $250,000 insurance cap include a ton of politically connected venture capital firms in Silicon Valley and startups.

00:06:15.940 So, for example, Circle, the payment technology firm, had $3.3 billion in Silicon Valley Bank.

00:06:26.420 That's a bunch of money.

00:06:27.460 $3.3 billion is way, way, way above $250,000.

00:06:32.980 There were a total of 1,074 private equity and venture capital funds that were banking with Silicon Valley Bank.

00:06:41.300 And if you look at some of the players, in addition to Circle, Roku, the streaming service, had $487 million in Silicon Valley Bank.

00:06:52.440 The crypto lender BlockFi, which is now defunct, had $227 million.

00:06:58.840 Roblox, the online gaming platform, had $150 million.

00:07:07.440 And BuzzFeed, the online media platform, had about $56 million in cash and cash equivalents at the end of 2022, the majority of which was held at Silicon Valley Bank.

00:07:20.440 So you have a lot of big players with huge amounts of money.

00:07:24.620 Now, these players chose to deposit it knowing what the FDIC limits were.

00:07:30.200 They didn't seek to insure it.

00:07:31.880 They didn't seek to find any other way to protect it.

00:07:35.760 They counted on, number one, that they believed Silicon Valley Bank was too big to fail.

00:07:41.080 But number two, what happened is the White House very quickly responded to Democrat politicians and tech firms and VC firms expressing dismay.

00:07:54.220 And the Biden administration said, you know what?

00:07:58.080 We're going to guarantee every deposit doesn't matter how big.

00:08:01.360 That was, any way you look at it, a massive bailout.

00:08:08.220 And it was a bailout that was done with no authorization from Congress.

00:08:15.340 You know, you think back to the financial crisis that we saw in 2008.

00:08:23.160 2008, there was a financial crisis and there was a massive bailout.

00:08:26.460 And what happened there, the George W. Bush administration went to Congress and they sought to pass what was called TARP, the Troubled Asset Recovery Program.

00:08:36.760 And the first time, in fact, the House of Representatives voted it down and didn't give the Bush administration the bailout it asked for.

00:08:44.100 Then ultimately it did. And actually, the response to TARP prompted, in significant part, the Tea Party, the enormous wave of fed up voters that were very unhappy why rich connected bankers were getting billions in government money.

00:09:03.660 It's striking here.

00:09:05.020 The Biden administration didn't go to Congress, didn't think Congress had anything to say at all.

00:09:09.700 They just announced it. We're giving away money. Why?

00:09:13.400 Because these are Democrat donors and people we listen to.

00:09:17.700 And you know what? Mom and pop across this country are going to pay more. 0.98

00:09:21.900 Local community banks in Texas and all across the country are going to end up paying more because the Biden administration decided to bail out Silicon Valley Bank

00:09:32.380 and to ignore the FDIC cap and give unlimited guarantees on deposits.

00:09:39.700 Senator, I want to ask you a question, and this really is a political one, about the money that was coming out of Silicon Valley Bank.

00:09:49.180 We've now been told that apparently they've given more than $73 million in donations to Black Lives Matter and related organizations.

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00:10:58.020 So you see and you go back to what you're mentioning about how the FDIC works, right?

00:11:02.520 You're supposed to have a limit to the first $250,000 of your deposits in a bank.

00:11:07.600 But what Biden basically said is, hey, this is a woke liberal bank and we cover it all, even though the people that were putting the money in the bank knew that they were overly leveraged here,

00:11:18.500 that they didn't have as sound of a lending practice as many other banks.

00:11:23.700 They didn't care.

00:11:24.420 So are we now at the point where we have a government that says, OK, you can act recklessly in the financial industry, specifically in banking,

00:11:34.140 as long as you are in the right side of giving to Democrats or to parties, we'll cover you no matter how reckless you are, no matter how big you are.

00:11:43.340 And as long as you're on our team and donating to things that we believe in, we'll get your back up to 100 percent of all of your deposits.

00:11:51.360 Look, there are an awful lot of folks that are going to take exactly that message from this.

00:11:56.940 This was an act of cronyism.

00:12:00.960 It was also critically, you're right, that Silicon Valley Bank was one of the most woke banks in America.

00:12:06.740 It was very into ESG.

00:12:08.420 It was very into climate change.

00:12:10.340 It was very into Black Lives Matter.

00:12:12.060 It was very into everything except apparently having a risk management process to protect its depositors' deposits.

00:12:18.800 And in fact, stunningly, Silicon Valley Bank, for a year prior to this, didn't even have a chief risk management officer at a bank.

00:12:29.680 That's pretty damn important.

00:12:31.420 They didn't have this hedged against interest rate risk.

00:12:37.200 They were gambling that the Fed would not raise rates, even though they'd been screaming from the mountaintops that they were going to raise rates.

00:12:43.680 A bank that is being prudent can hedge its investments against interest rates rising by investing also in counterbalancing investments that will go up when interest rates go up.

00:12:56.120 They didn't do that.

00:12:57.560 They were focused on virtue signaling.

00:13:01.680 They were focused on showing just how woke they are.

00:13:04.960 And it's important to understand also, look, the bank here, these bank officers were bad actors.

00:13:13.040 Let me tell you two data points that have been vastly underreported.

00:13:18.740 Number one, hours before the bank was shut down, Silicon Valley Bank gave very substantial bonuses to all of its employees.

00:13:30.680 They just began writing checks to everyone hours before they were shut down.

00:13:39.480 Data point number two, in the two weeks prior to their being shut down, the CEO and the CFO sold large amounts of stock.

00:13:52.160 The CEO ended up making over a $2 million profit from selling stock less than two weeks before the bank was shut down.

00:13:59.520 Both of those indicate corrupt intent.

00:14:04.240 I'll tell you, I had a conference call in the last 48 hours with all 100 senators were invited to participate and Treasury and the FDIC was on there.

00:14:17.380 And I asked, I said, look, is it true that they gave bonuses to their employees, number one?

00:14:23.620 One, if so, I think it is outrageous.

00:14:27.180 And number two, has there been any investigation into clawing back those bonuses?

00:14:33.540 Because they're literally this, as far as I'm concerned, this is like Bonnie and Clyde.

00:14:38.520 They're robbing the bank as they know their customers' deposits are about to get blown up.

00:14:44.120 And much of the media coverage has ignored the exceptionally bad conduct by the bank's officers.

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00:15:23.540 You look at Joe Biden, and one of the things that I think is very concerning about this Biden bailout, that's what it is.

00:15:31.300 We should call it that, is the question now is, is this a big step towards government control of the banking system?

00:15:39.540 Because if the government can choose winners and losers, and those are supposed to be giving oversight of the banks are not doing it, that's another huge problem here.

00:15:50.980 And many people may not understand this, and I want you to explain it for people.

00:15:54.940 The San Francisco Fed was who was supposed to be supervising this bank.

00:15:59.160 They either were asleep at the wheel or didn't care that they were acting this way.

00:16:05.680 And if this is what the government's going to do, is this almost a play where they say, hey, we're just going to have a United States government now that is in total control of the banking system.

00:16:15.980 That would be terrible for this country.

00:16:18.000 Well, the banking system right now is already heavily regulated, and bank regulators are deeply involved in examining the books, and they should be involved.

00:16:28.540 There is a very important role for bank regulators to make sure that banks are being honest and have sufficient liquidity and are sufficiently financed.

00:16:38.520 I will note that this crisis, number one, was heavily encouraged by government policy.

00:16:44.260 And in particular, the Fed, for years, pursued an easy money policy of quantitative easing of virtually 0% interest rates that was flooding the system with cash.

00:16:56.100 Number two, the federal government also treated long-term government debt as essentially risk-free, zero-risk government debt.

00:17:06.180 Dodd-Frank, rammed through by the Democrats, heavily encouraged banks to invest in long-term government debt.

00:17:13.400 Now, one thing that does is it helps finance the massive debt that the Democrats are racking up on their spending spree.

00:17:20.620 They want banks incentivized to buy that debt.

00:17:23.700 But number two, that may make sense in a non-inflationary environment.

00:17:30.000 But when inflation exploded under Joe Biden and the Fed was forced to raise rates, suddenly that long-term government debt, you had a spread there that severely reduced the value of those bonds.

00:17:44.600 And it was government policies that encouraged it on the front end.

00:17:48.320 But then on the back end, you are absolutely right.

00:17:50.960 The regulator of Silicon Valley Bank was the San Francisco Fed.

00:17:55.180 The San Francisco Fed bears an enormous amount of responsibility for what happened because this wasn't subtle.

00:18:01.580 This was out in the open.

00:18:03.500 This was – it was obvious.

00:18:06.160 Silicon Valley Bank was not hiding from the regulators that it had massive amounts in long-term government debt.

00:18:13.300 The Fed obviously knew that the Fed was raising interest rates, and yet this exposure – and the Fed presumably knew that this interest rate exposure was not hedged.

00:18:27.120 And so you have to ask, what the hell happened at the San Francisco Fed?

00:18:33.320 You know, you go look at the San Francisco Fed's website.

00:18:36.560 They again, like Silicon Valley Bank, have all sorts of woke things on there about ESG and climate change and Black Lives Matter.

00:18:45.020 That was their priority.

00:18:46.660 But actually doing their job, it is striking that the San Francisco Fed did nothing until it was too late.

00:18:55.360 Will there be any accountability for the government regulators, specifically in San Francisco, on this?

00:19:02.020 And is there anything that Washington can actually do to hold them accountable?

00:19:06.340 Because if you basically simplify this, you pretty much had a group of wealthy speculators that got really upset that their money ended up being locked into a 10-year obligation at less than a 2% return.

00:19:18.840 That's how one person put it.

00:19:20.140 So then they basically said, all right, we'll convince the government it was in everyone's best interest to help them out of their jam at the expense of everyone else.

00:19:27.780 And the Fed, who's supposed to be looking at this, watching this bank, they just didn't do a darn thing.

00:19:34.280 Well, there needs to be accountability, and I do have a high level of confidence that at a minimum there'll be accountability in the House, that the House is going to hold the regulators to account.

00:19:44.320 What Joe Biden and the Democrats and what the corporate media are trying to do is, of course, blame it all on Trump, because that's their answer for everything.

00:19:53.860 But if you look at who the bank regulators were that were in charge of it, it wasn't Trump.

00:19:57.540 Trump's been out of office for over two years.

00:19:59.540 It was the Biden administration asleep at the wheel.

00:20:04.660 And when you look at it also, look, the moral hazard this will create is dangerous.

00:20:12.780 And it's a basic principle.

00:20:14.480 When you socialize the risk and you individualize the benefits, you always get bad behavior.

00:20:23.420 Silicon Valley Bank was behaving according to the incentives that they were getting from the Biden administration.

00:20:32.480 They believed they'd be bailed out.

00:20:33.880 And in particular, look, it's worth noting the bailout is not even directed at Silicon Valley Bank and its stockholders.

00:20:42.680 They have not been bailed out, at least not yet.

00:20:45.820 The people who were bailed out were all of the depositors that had tens of millions or hundreds of millions or even billions of dollars in Silicon Valley Bank.

00:20:56.420 By the way, among among many of those depositors, billions of dollars worth were Chinese companies.

00:21:03.820 Silicon Valley Bank, one of the things it specialized in was was doing banking for foreign companies, foreign investors.

00:21:11.140 And so this was also a bailout of China by the Biden administration.

00:21:16.660 But, you know, what ordinarily happens when a bank fails and listen, we've seen banks fail.

00:21:22.100 That's part of how the system operates.

00:21:24.400 When the bank managers take on too much risk, the bank should fail because you don't want to incentivize.

00:21:32.140 You don't want to have everyone taking on too much risk.

00:21:35.520 But what ordinarily happens when when a bank fails is, number one, they try to find a private buyer and and they did try to do that over the weekend.

00:21:45.060 And apparently they were unable to do so.

00:21:47.620 There were several bids submitted, but the Biden FDIC refused to take any of the bids.

00:21:53.920 They found the terms unacceptable.

00:21:55.300 Now, we don't know what those terms were.

00:21:57.500 I can tell you in the call with the senators, we asked them and they didn't tell us.

00:22:01.580 They didn't want people to know what the terms were, but the Biden administration turned down a private buyer that could come in and take over the bank, which is ordinarily what happens.

00:22:11.580 Also ordinarily what happens when a bank fails is that everyone's deposits up to two hundred and fifty thousand dollars get held completely harmless.

00:22:20.720 And those are guaranteed by the FDIC and the larger deposit holders.

00:22:25.580 Typically, they're not blown out there.

00:22:28.400 Their larger deposits are not typically worthless, but they usually take a haircut somewhere in the 15 to 20 percent range.

00:22:35.440 And that's what ordinarily happens when you put a whole bunch of money in one place at risk without it being insured.

00:22:43.240 All of the depositors knew that, but they also knew that with their friends in the Biden administration, that they could count on higher returns from Silicon Valley Bank playing fast and loose.

00:22:55.700 And if things went south, I think they were confident that Democrats in Washington would have their back.

00:23:02.740 Last question on this for you, Senator.

00:23:04.980 They're obviously having two banks back to back collapse is going to make people uneasy.

00:23:10.500 When you guys were on these calls, did anyone talk about other banks or there's still concerns that other banks may have been following and doing the same exact thing that Silicon Valley Bank was doing?

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00:24:46.340 Now, other banks do, in fact, have hard times over the next week or two.

00:24:51.880 Is the policy now officially of the Biden administration to bail out those banks, ensure 100% of the deposits no matter what,

00:24:59.400 because of the precedent that they just created out of thin air?

00:25:03.560 So, possibly.

00:25:05.400 But when you look at other banks, look, there's always a risk of contagion.

00:25:09.700 And that is a serious concern.

00:25:11.460 It's a concern that regulators need to take seriously.

00:25:13.600 It's a concern that Congress needs to take seriously.

00:25:16.420 We need our banking system to be safe and secure.

00:25:20.000 There are very few, if any, banks, though, that are similarly situated to Silicon Valley Bank.

00:25:26.980 Number one, it was almost exclusively big tech and venture capital companies that had deposits in Silicon Valley Bank.

00:25:39.080 And the way Silicon Valley Bank would work is they'd bank a big venture capital firm.

00:25:45.860 And the VC firm would require that all their portfolio companies – so a venture capital firm is a firm that takes investments from individuals and institutions

00:25:55.620 and then invest, typically, in the tech space, early stage in startup companies.

00:26:02.100 And so a VC firm could have dozens or even hundreds of tech startups that it's invested in.

00:26:10.880 And many of the VCs would require every one of the tech startups it had.

00:26:16.600 They had to bank at Silicon Valley Bank.

00:26:18.600 And so you ended up having a very high concentration.

00:26:22.720 That degree of sector exposure makes a bank quite vulnerable, that it was so intertwined with tech that tech has been hard hit lately.

00:26:34.340 And in particular, the higher interest rates, much – when you look at startups, they are often heavily funded by debt.

00:26:40.560 And a startup, it could often be a pretty long ramp up before they have significant revenue.

00:26:46.240 And so Silicon Valley Bank had greater exposure because they were so sector-concentrated in one area, number one.

00:26:54.760 Number two, the fact that 96 percent of their deposits were uninsured.

00:27:00.120 That is an unusually high number.

00:27:04.040 They were not – their business was not having lots and lots of depositors under the FDIC insurance cap.

00:27:10.400 It wasn't a lot of mom and pops.

00:27:11.940 It was big firms with hundreds of millions or billions of dollars.

00:27:17.920 And number three, as I mentioned, they had the highest securities portfolio as a percentage of total assets of any bank.

00:27:24.520 And so they ended up with their investment strategy.

00:27:28.840 They were particularly vulnerable to this interest rate risk.

00:27:32.800 As I mentioned, for a year, they didn't even have a risk officer.

00:27:36.320 They didn't hedge significantly against this risk.

00:27:39.080 And so their behavior invited this.

00:27:42.520 Now, there is a risk of other, particularly mid-sized banks, facing a run on the bank.

00:27:48.280 And so we don't want that.

00:27:50.040 Any bank is potentially vulnerable to a run on the bank.

00:27:53.940 We want people to have confidence in our banking system.

00:27:57.700 But you asked about the moral hazard.

00:28:00.540 Will others behave recklessly because of this?

00:28:02.900 And I think the odds are quite high.

00:28:06.300 Now, a second element that was created is what's called a Fed Emergency Lending Facility.

00:28:13.920 It's also known as a 13-3 facility because that's where the authority appears in the Federal Reserve Act,

00:28:19.840 in which case the Fed said they will loan money for a year to back up long-term government debt,

00:28:30.900 and they will value that money not at its current market value but at its original purchase price.

00:28:38.660 That's yet another bailout.

00:28:41.100 I mean, let's be clear.

00:28:42.440 That is billions and billions of cash that is on the hook to go out from the Fed.

00:28:50.380 And it really is striking.

00:28:52.100 Look, we could have a reasonable public policy debate listening to economists examining what needs to be done to ensure stability in the banking system.

00:29:02.600 But the Biden administration didn't want that reasonable debate.

00:29:06.940 It didn't want the input of Congress.

00:29:08.440 It didn't want the public to have any say in it.

00:29:10.860 It just wanted political cronies to make that decision.

00:29:15.100 And I think that is a very dangerous dynamic.

00:29:19.880 Yeah, it is concerning.

00:29:21.440 And it seems like the new policy of the Biden administration is be a woke bank and support and advocate and give donations to woke ideology,

00:29:29.380 and we'll back you up no matter what.

00:29:31.400 And if that's what they're going to do for the next two years, that's going to be very concerning and should be an issue moving into the next presidential election.

00:29:38.200 No doubt about that.

00:29:39.000 I want to talk also about China and really what's happening with climate change and with regulations.

00:29:47.740 There are a couple of different Biden administration clips that have emerged recently highlighting just how much the Democrats are in bed

00:29:58.220 and idolizing the Chinese Communist Party.

00:30:03.180 These were moments that when you hear them, you're kind of in shock because you've got the Biden administration officials who are actually saying that they think China is amazing.

00:30:15.780 You have Jennifer Granholm.

00:30:16.780 You also have another individual with the Biden administration.

00:30:21.040 And here's a montage of what they've been saying.

00:30:23.580 We're hopeful that, you know, we can all learn from what China is doing.

00:30:27.800 But the amount of money that they're investing in clean energy is actually, you know, encouraging.

00:30:33.480 The United States does not seem to decouple from China.

00:30:36.200 We enjoy trade with China, and that will and should continue.

00:30:40.540 So this isn't about decoupling.

00:30:42.360 This isn't about decoupling.

00:30:44.000 Now, that's not the only Democrats that seem to be idolizing the Biden administration, or excuse me, China from the Biden team.

00:30:52.160 You have former Speaker of the House Nancy Pelosi, who also came out saying this about China.

00:30:58.920 But here's the thing.

00:31:00.580 You can't just go after China with a cudgel. 0.55

00:31:03.580 You have to say we have to live on this planet together.

00:31:08.180 How can we work together to save the planet from climate change?

00:31:12.580 They're essential in that discussion.

00:31:15.160 How can we try to work together with them on issues where we can find common ground?

00:31:21.740 Senator, China, just so people understand this, they're one of the biggest, if not one, the biggest polluting industrialization in the world. 0.97

00:31:29.060 They don't ever play by the rules that we are, that these Democrats are trying to force us to play by.

00:31:34.820 And not only are the Chinese laughing at us on all of our global warming issues that are just stifling our economy and manufacturing, but they're making money off of these bad policies and polluting at record levels that we've never seen before. 0.99

00:31:51.900 And now you've got Democrats praising them.

00:31:54.760 You know, it really is striking that in the same week that the Biden administration does a bailout for their politically connected friends in tech, including billions of dollars of a bailout for Chinese tech companies and Chinese investors, that you have a coordinated pivot from the Democrats to embrace China.

00:32:19.100 Those three clips you played, the first one was from Jennifer Granholm, the energy secretary.

00:32:24.340 The second one was from Gina Raimondo, the commerce secretary.

00:32:28.340 And the third one was from Nancy Pelosi, the former speaker of the House.

00:32:32.640 All of them are saying almost exactly the same thing.

00:32:35.440 They're all saying, we've got to work with China as our partner in fighting climate change.

00:32:41.660 Now, those are the talking points, and I will give Democrats credit.

00:32:45.900 Democrats have incredible message discipline.

00:32:48.360 The fact that you see all three of them saying almost word for word the same thing is clear.

00:32:53.360 They've got a message.

00:32:54.300 They're sticking to it.

00:32:55.600 It just so happens the message is laughably absurd.

00:32:59.540 So never mind all the human rights abuses, the torture, the murder, the genocide, the concentration camps.

00:33:05.520 Never mind the culpability for COVID and millions of lives lost and trillions in damage done to the global economy.

00:33:15.180 Never mind the intellectual property theft that China pursues as a business, as a state policy.

00:33:23.200 Set all that aside.

00:33:23.960 But just focus on the environment.

00:33:27.600 Communist China is the single biggest polluter on the face of the planet.

00:33:32.620 Year after year after year, it's the biggest polluter on the face of the planet.

00:33:37.220 But wait, Ben, you might say.

00:33:39.020 Nancy Pelosi just says they're doing great things on the environment.

00:33:43.860 Let me read you an amazing statistic.

00:33:47.020 China right now is in the process of building more new coal capacity than all of the existing U.S. coal plants combined.

00:34:00.300 I want you to pause and think about that for a second.

00:34:04.880 So U.S. capacity right now, we have 198 gigawatts of coal-fired electricity generation capacity.

00:34:16.020 That's of the end of 2022.

00:34:18.420 198 gigawatts.

00:34:20.320 How much do you think China is building, has planned and is building right now?

00:34:25.700 No clue.

00:34:26.340 So it has 115 gigawatts under construction, and it has another 250 gigawatts planned.

00:34:35.940 So all told, that is 365.

00:34:39.880 It is nearly double the current U.S. capacity.

00:34:44.580 That's what they are building and planning right now.

00:34:48.740 And these plants are designed to last 40 years or longer.

00:34:53.180 And so to watch the Democrats pivot in, look, this has nothing to do with the environment.

00:34:58.420 We've talked before about how today's Democrat Party is structurally pro-China.

00:35:03.980 Why?

00:35:04.640 Because their major stakeholders, big tech, big business, big universities, big Hollywood, all of them are in bed with China. 0.97

00:35:12.940 And so when you have Pelosi and the Democrats reading the CCP's talking points about how great they are on the environment, it is both deeply dishonest and laughably absurd.

00:35:26.500 One other thing on China, you look at this moment and in history, I think this is going to go down as an extremely pivotal moment because it's not just this administration basically fanboying over China and rewriting history of what China is doing on climate change.

00:35:44.520 But they're also allowing for China to really take advantage of what's happening with Russia and Ukraine.

00:35:52.220 You combine these two things together on top of what they're doing with TikTok and spying and what they've been able to do with just stealing anything they can get their hands on through hacking in this country and stealing trade secrets.

00:36:05.740 The list goes on and on.

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00:37:15.180 Now, Senator, this administration so far, and correct me if I'm wrong, has still to date not one time stood up to China on any significant issue.

00:37:26.400 I would even say probably any basic issue.

00:37:30.700 What is the reasoning behind them being so obsessed with allowing China to just continue to grow, do whatever they want to do, and putting Americans second to China in this policy?

00:37:40.960 Well, number one, that's been Joe Biden's policy his entire life.

00:37:45.480 He has been an advocate on behalf of China for decades.

00:37:49.820 If you remember the video of him saying, come on, man, China's our friend.

00:37:54.700 Come on, man.

00:37:56.380 He has been arguing that for a long time.

00:37:59.480 Number two, by the way, he's also been perfectly happy to be personally enriched and for his family to be personally enriched.

00:38:06.720 Because as we've talked about at length on this podcast, Hunter Biden made millions of dollars monetizing his father's political connections.

00:38:15.740 And that included, as we know from the Hunter Biden laptop, 10% for the big guy for Joe Biden himself.

00:38:21.220 So he's had a personal financial stake in doing business with China for a long time.

00:38:26.560 But number three is the structural reality of the Democrat Party today.

00:38:32.140 They're not willing to stand up to China because the people who fund them depend upon China.

00:38:39.760 The people who form the core of the Democrat Party today are deeply intertwined with China.

00:38:46.320 And actually, the Silicon Valley Bank situation illustrates that perfectly.

00:38:50.700 Biden was all too eager to bail out his buddies in tech.

00:38:56.780 But in doing so, he's providing billions in bailouts for China as well.

00:39:02.300 And that's because the two are deeply intertwined.

00:39:07.140 I'll point out on top of that, if you say, well, wait a second, you know, isn't that an exaggeration?

00:39:14.600 In the last Congress, I forced a vote on the Senate floor on my amendment that said the federal government should be prohibited from buying electric vehicles or batteries manufactured using slave labor in concentration camps in China. 0.96

00:39:36.140 You would think this would be an easy vote.

00:39:38.120 You would think this would be 100 to nothing.

00:39:39.400 Every single Democrat except one, every Democrat except Joe Manchin voted no.

00:39:46.140 And that is a structural dynamic of how today's Democrat Party is organized.

00:39:52.820 Yeah, it's certainly not looking out for the American people first and foremost.

00:39:56.740 And we're seeing that whether it's the bank, whether it's China, whether it's climate change, the list goes on and on.

00:40:01.080 Senator, always a pleasure.

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Verdict with Ted Cruz - March 15, 2023

Don't Call It A ＂Bailout＂, But It's a Massive Big Tech & China Bailout

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