On the latest episode of the Drill Down podcast, Government Accountability Institute President and New York Times bestselling author Peter Schweizer and GAI Vice President Eric Eggers tackle the recent failure of Silicon Valley Bank – and reveal California Gov. Gavin Newsom’s personal interest in the bank’s bailout.

SCHWEIZER: It’s what you call an incestuous relationship between government and business.

“This was ‘the elite’ —this was the ‘Silicon Valley elite,’ Schweizer says of the SVB depositors, adding that much of SVB’s cash was invested in Environmental Social Governance initiatives which, in many cases, didn’t even make a product.

“Maybe people are right to be worried,” Eggers says of SVB’s demise.

On the other hand, Eggers stresses that if some of the cutting-edge tech companies doing business with the bank were allowed to fail, China could swoop in and buy everything “on the cheap,” putting America in a potentially compromised, weakened position.

“I think we should restrict China from buying up any of these companies,” Schweizer confirms adamantly.

“[ESG] businesses generally don’t make money,” Schweizer says, adding that SVB got caught with its pants down with too much money in too many green businesses.

Schweizer and Eggers expose California Governor Gavin Newsom’s personal interest in bailing out Silicon Valley Bank, including Newsom’s business connections to SVB and his shakedown for his wife’s charity. At Newsom’s request, the bank donated $100,000 to his wife’s charity, the California Partners Project, and later advocated the bank’s bailout. “It’s what you call an incestuous relationship between government and business,” Schweizer says.

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In recent years, the term “bailout” has become all too familiar, especially in the context of government intervention to rescue failing banks. However, a recent bailout in Switzerland has taken the world by surprise as it has come to light that the beneficiaries of this bailout are none other than the well-heeled Silicon Valley elites.

Schweizer, a Swiss bank that has long been known for its conservative approach to banking, found itself in dire straits after making risky investments in technology start-ups. When these investments went sour, the bank was facing a significant financial crisis. In a move that has raised many eyebrows, the Swiss government decided to step in and bail out Schweizer, citing the potential impact of its failure on the broader economy.

What has shocked many observers is the fact that the beneficiaries of this bailout are not the typical image of struggling citizens in need of financial assistance. Instead, they are some of the wealthiest and most influential figures in Silicon Valley, including venture capitalists, tech entrepreneurs, and even some of the biggest names in the tech industry.

It seems that these individuals, despite their considerable resources and experience in the tech world, were caught off guard by the failure of their investments and turned to the Swiss government for a lifeline. This has prompted many to question the responsibility and accountability of these elites, who have long been celebrated for their entrepreneurial spirit and innovation.

The bailout of Schweizer raises larger questions about the relationship between the high-flying tech industry and the global financial system. Many have pointed to the hubris and recklessness of Silicon Valley, as well as the lack of oversight and regulation that allowed these risky investments to be made in the first place.

Furthermore, the bailout has reignited debates about the role of government intervention in the economy and the moral hazard of rescuing wealthy individuals and institutions from their own mistakes. Critics argue that the Swiss government’s decision sets a dangerous precedent and sends the wrong message to the financial industry, effectively rewarding risk-taking behavior and shielding powerful figures from the consequences of their actions.

In the wake of this controversial bailout, there is a growing sense of disillusionment with the Silicon Valley elite, who are often seen as visionary leaders and pioneers of the digital age. The episode with Schweizer has exposed their vulnerability and brought to light the extent to which they are dependent on traditional financial institutions and government support.

Ultimately, the bailout of Schweizer serves as a sobering reminder that even the most powerful and influential players in the tech world are not immune to the pitfalls of the global financial system. It raises important questions about accountability, regulation, and the ethics of modern capitalism. As the dust settles on this episode, it remains to be seen whether it will prompt a deeper reevaluation of the relationship between Silicon Valley and the broader economy.