Trust and truth in banks and elections

Amidst all the things we’re arguing about these days, it would be easy to miss the news that the second and third largest bank failures in American history occurred the past couple of weeks. That seems like a big deal. The first was set in motion March 8 when Silicon Valley Bank, the nation’s 16th largest, announced it needed to raise $2.25 billion because of failing bond investments.

The next day, its customers began withdrawing their money, sort of like the townsfolk did in the bank run scene in “It’s a Wonderful Life.”

As George Bailey explained in that movie, financial institutions use deposits to make loans and other investments. They don’t keep their customers’ money in a vault.

The system enables us to have free checking accounts and prevents us from having to hide our cash beneath our mattresses. It works great as long as two things are happening. One is that those investments must make money, which was not happening with Silicon Bank.

The other is that investors must trust their money will be safe and available to be withdrawn. That’s why the federal government guarantees depositors’ first $250,000 will be protected.

Unfortunately, 94% of Silicon Valley Bank’s deposits were larger than that. Too many people got scared and tried to get their money all at once. In response, the Biden administration said it would protect the deposits larger than $250,000. It was afraid panic would spread past those two banks, the other being in New York.

It’s not just in banking that trust these days is endangered. Pick any institution, and many Americans, in many cases the majority, have lost faith in it. Part of it is justified. Part of it is the result of the divisive culture war.

Part of it is the fact that everything has gotten so big and complicated and out of our control that we take refuge in cynicism. And part of it is the speed with which information, and disinformation, can spread these days. The House Financial Services chair, Rep. Patrick Mchenry, said Silicon Valley Bank’s collapse was “the first Twitter-fueled bank run.”

If that’s true, then there easily could be another one.

Like banks, elections only work if citizens believe in them. After all, whether we use electronic ballots or paper ones, we must trust the votes will be counted because we can’t all count them ourselves.

That’s why what’s happened the past two-and-a-half years has been concerning. Court cases, recounts and investigations have found nothing that would contradict the fact that President Biden won the 2020 election. Nevertheless, polls show many Americans believe the election was rigged against President

Trump, largely because he’s been telling them so since before the election occurred.

It is true that we are not well served by naive, blind allegiance. Sometimes, distrust is justified and can lead to justified action. The civil rights movement was a necessary response to a time when elections widely were used – and legally were rigged – to continue discrimination. But the evidence is clear that the 2020 election, as well as last year’s, do not belong in that category.

It’s a dangerous game when large percentages of people don’t accept the legitimacy of legitimate elections. If you really believe your side was cheated last time, then you can justify bad actions of your own, because turnabout is fair play, right? Then the two sides can stair-step each other, each time taking things a bit farther. Battle lines can harden. Retribution becomes a goal.

If we stop believing in elections, some people will start looking for alternatives – which exist in many parts of the world, by the way, if we want one.

We’re nowhere near that point, but we have moved a little bit in that direction. Let’s turn down the volume, value truth even above victory, and accept losses gracefully, knowing another election will be coming.

The next one, in fact, is already getting in gear. We can be sure imperfections will occur because flawed human beings will be involved. But unless we have true information indicating otherwise, we still can have faith that this is the United States, and here, the candidates who receive the most votes, or Electoral College votes in the presidential race, will win.

Truthfully, we’re banking on it.