While the failures of the Silicon Valley and Signature Banks got most of the oxygen today, the more important news of the day is likely the meeting in San Diego, California, between President Joe Biden, Prime Minister Anthony Albanese of Australia, and Prime Minister Rishi Sunak of the United Kingdom.
These three countries make up the new AUKUS security pact, announced on September 15, 2021, designed to provide a military counter to China’s influence in the Indo-Pacific region. (The Five Eyes alliance of those three countries plus Canada and New Zealand focuses on sharing intelligence.) Today’s meeting, and its announcement that AUKUS will create a new fleet of nuclear-powered (but not nuclear-armed) submarines, brings that pact to a new level.
At the meeting today, the U.S. announced it will share its nuclear propulsion technology with Australia and will increase U.S. submarine construction capacity. The U.K. announced it will increase its defense spending. And Australia will buy at least three nuclear-powered submarines from the U.S.
The U.K. and Australia will build new nuclear-powered submarines for their own navies. Sailors from the fleets will train together, and U.S. and U.K. submarines will increase their visits to Australian ports. Eventually, the alliance will create its own nuclear-powered submarines, the SSN-AUKUS.
Both Biden and Albanese were very clear about the distinction between nuclear-powered and nuclear-armed submarines, and they emphasized that the Australian submarines will not be nuclear armed. “Australia is a proud non–nuclear weapons state and has committed to stay that way,” Biden said. “These boats will not have any nuclear weapons of any kind on them.”
Nuclear-powered submarines are powerful pieces of a country’s arsenal because, unlike diesel-electric submarines, they do not have to surface frequently to refuel and so can travel secretly far longer than traditionally fueled vessels. This is the first time the U.S. has shared its nuclear technology in more than 60 years and illustrates the Biden administration’s focus on oceans, rather than land, for defense.
“This is a genuine trilateral undertaking,” Albanese said. While the U.S., the U.K., and Australia share a long, friendly history, he continued, what they “hold in common is more fundamental and more universal than our shared histories. We are bound, above all, by our belief in a world where the sovereignty of every nation is respected and the inherent dignity of every individual is upheld; where peace, stability, and security ensure greater prosperity and a greater measure of fairness for all; and where all countries are able to act in their sovereign interests, free from coercion.”
As National Security Advisor Jake Sullivan put it, what we are seeing is “a larger long-term investment by the United States in core alliances in the Indo-Pacific and also the actual concrete reflection of President Biden’s strategy of linking allies in the Atlantic with allies in the Pacific. And it also reflects his commitment to ensuring that there is burden-sharing among our allies, as we’ve seen in the way that Europe has stepped up in the war in Ukraine, as we’ve seen how Japan has stepped up with its defense budget.”
It is a message, he said, for the next several decades.
Meanwhile, the Pentagon’s proposed 2024 budget proposal, released today, is the largest peacetime budget in our history. It’s about $25 billion more than the $816 billion budget Congress approved for 2023. It modernizes U.S. weaponry and invests an unprecedented $145 billion in research-and-development projects. It reduces the size of the Army and upgrades Navy ships, scrapping older ships earlier than planned. It adds new aircraft to the Air Force. The budget signals a shift toward Biden’s plan for defense against China.
There was lots of fallout today from the bank collapses of the weekend, but the upshot appears to be that the damage has been contained, leaving plenty of room for finger-pointing over the crisis.
President Biden reassured the American people that the banking system was safe and said he would ask Congress and banking regulators “to strengthen the rules for banks to make it less likely this kind of bank failure would happen again, and to protect American jobs and small businesses.” Observers of Silicon Valley Bank’s failure note that the 2018 loosening of banking regulations that had been imposed after the 2008 crash paved the way for SVB’s troubles. One of the lobbyists for this loosening was Greg Becker, who until Friday was the person in charge of SVB.
Meanwhile, David McIntosh, president of the right-wing Club for Growth, retorted, “Changing the rules after the crash to prop-up liberal investors at the expense of taxpayers is pure crony capitalism,” a sentence that seems to mix a bunch of different concepts together. Florida governor Ron DeSantis and Trump-adjacent figures took a different tack, falling back on the culture-war lens they use for everything, blaming the failure not on the company’s poor business decisions but on “wokeness.”
In an opinion piece in the Wall Street Journal, Andy Kessler, who writes on technology and markets, echoed the culture warriors, writing that “in its proxy statement, SVB notes that besides 91% of their board being independent and 45% women, they also have ‘1 Black,’ ‘1 LGBTQ+’ and ‘2 Veterans.’ I’m not saying 12 white men would have avoided this mess,” Kessler wrote, “but the company may have been distracted by diversity demands.”
In other news, House Republicans have ended the congressional investigation into former president Trump’s financial records. Representative Jamie Raskin (D-MD), the top Democrat on the Oversight and Accountability Committee, on Sunday accused committee chair James Comer (R-KY) of coordinating with Trump’s lawyers to end the probe into Trump’s finances. On January 19, 2023, Trump’s lawyer Patrick Strawbridge wrote to the lawyer for Trump’s accounting firm, whose records the committee had subpoenaed in 2019, saying “my understanding is that the Committee has no interest in forcing Mazars to complete it and is willing to release it from further obligations under the settlement agreement.”
Instead of pursuing the investigation into Trump, Comer says he plans to look into “money the Bidens received from China.” Trump accused Biden of taking a $1.5 billion payoff from China without any evidence. Now Comer claims to have “documents to prove” that the Biden family has taken illicit money from China, but there is no evidence that this allegation is true. Raskin revealed Sunday that Comer has quietly subpoenaed 14 years of business records from Bank of America for three of Hunter Biden’s business associates.
Finally, Senate minority leader Mitch McConnell (R-KY), who was hospitalized last Wednesday night after a fall at the Waldorf Astoria Hotel in Washington, D.C., has been released from hospital to a rehabilitation facility for physical therapy before returning to his home.
You might want to call Republican efforts to smear President Biden and their Democratic political opponents 'Investigate-gate'. These congenital malcontents are absolutely pathetic. Investigating this. Investigating that. Making wild allegations but having no facts to back them up. It must be excruciatingly tiresome to have to get up in some committee meeting, and refute those false accusations, tit for tat. All that for a party that has no track record of probity or integrity. But they keep coming, like cockroaches looking for food under the sink or in the pantry. We can't let up on them, and it's draining our energy, attention, resources, and your sanity. Scandal does not slow them down a bit, even when the facts show them to be lying through their teeth, they're utterly shameless in their denials. I don't know how these people can live with themselves, or how their families can stand to be around them. Just being in the same room with them is toxic.
President Biden's handling of the spate of bank failures has been nothing short of masterful. The Club for Growth is complaining that this is an example of 'crony capitalism', when in fact it is the third-party depositors who are being saved by the FDIC out of the fund that is replenished by the banks themselves. Important to note is that investors holding stock in those failed institutions get nothing. There will be no residuals to divvy up. Senior management has been fired; what would be nice however, is to have those bonuses issued to selected employees before the banks went under clawed back. As I have said elsewhere, these individuals should be banned from the banking industry for the rest of their lives. They can go to work for Starbucks and become baristas and make their mortgage payments from their tip money.
We understand the importance of national security. But we wish we could spend that kind of big money to build modern high-tech net zero schools in our rural areas and low-income neighborhoods. Etc.