Nobel economist Paul Krugman says the Silicon Valley Bank collapse has led to 'apocalyptic rhetoric' in markets, but almost none of it is true
The collapse and rescue of Silicon Valley Bank has led to some bleak rhetoric in markets, but almost none of the most commonly voiced fears are correct, according to Nobel economist Paul Krugman.
Biden has promised the policy move was not a bailout and would come at no cost for taxpayers – but while that's wrong, and that it is a bailout, according to Krugman, he said markets are also off base in their fears that SVB's collapse and rescue could lead to economic doom, refuting four myths about the bank's demise.
While Krugman believes SVB's collapse wasn't another Lehman Brothers moment, the bank was still a crucial part of the tech sector, which justifies its rescue. He compared it to the bailout of General Motors and Chrysler in 2009, when regulators chose to rescue key players in the auto industry and the economy.
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