The dramatic fall of Silicon Valley Bank in the span of a single week has sent reverberations throughout the financial system and growing fears of bank failures. SVB over-invested in mortgage loans and treasury bonds to deal with a glut of capital brought on by the COVID-19 pandemic, assuming these assets were secure as long as interest rates stayed low. In the past year, interest rates began to rise, making the assets SVB purchased worse less than what they bought them for. A bank failure could have been avoided, had a panic not spread among tech investors fueled by the likes of Peter Thiel. While almost none of the money at risk of loss belonged to workers, the $124 billion bailout package swiftly delivered by the federal government comes directly from our pockets. What’s more, if past boom-and-bust cycles are any sign, Silicon Valley as a whole will only grow richer and more powerful from this crisis—and in the process drive economic changes that will harm workers further. Author Malcolm Harris joins TRNN Editor-in-Chief Maximillian Alvarez for a special look at the Silicon Valley Bank collapse through the lens of Big Tech’s long anti-labor history.
Malcolm Harris is an American journalist and the editor of The New Inquiry. His newest book, Palo Alto: A History of California, Capitalism, and the World examines the rise of Silicon Valley.
Additional links/info below…
- The Incredible Tantrum Venture Capitalists Threw Over Silicon Valley Bank
- Column: Silicon Valley Bank broke. Silicon Valley is broken
Post-production: Jules Taylor
Transcript
The following is a rushed transcript and may contain errors. An updated version will be made available as soon as possible.
Maximillian Alvarez:
Welcome everyone to The Real News Network podcast. My name is Maximillian Alvarez. I’m the editor in chief here at The Real News, and it’s so great to have you all with us. The Real News is an independent, viewer-supported nonprofit media network, which means we don’t take corporate cash and we don’t have ads, and we don’t put our content behind paywalls. So we need each one of you to become a monthly sustainer of our work so we can keep bringing y’all coverage of the voices and issues you care about most. So please, head on over to therealnews.com/support and become a supporter of our work today. It really makes a difference.
With the collapse of Silicon Valley Bank earlier this month, the alpha tech bros of Silicon Valley and the venture capitalist class melted into a John Carpenter esque blob of flailing limbs and wailing heads warning of impending societal and economic collapse if big daddy government didn’t step in to bail them out.
SVB was the financial backbone of the region. As the New York Times reported back in 2015, SVB served 65% of all existing startups and many of the most prominent venture capital firms in Silicon Valley. And the stunning but not entirely unpredictable collapse of SVB comes after major disruptions to the tech sector and to the Silicon Valley dominated corner of the economy from mass layoffs at Microsoft, Google, IBM, and Meta to the collapse of the crypto industry, to the exceedingly public falls from grace of tech darlings like Elon Musk and Sam Bankman-Fried.
Now, I want to be very upfront that while my big brother, Zach, is a brilliant economist, I am very much not. While we both attended the University of Chicago as undergrads, Zach majored in econ and I majored in Slavic languages and literatures. So I just want to be very clear that I am neither the right nor the best person to lay out the financial nuances of SVBs collapse and the fallouts from it. But just to center listeners and provide some basic who, what, where, and why context, I’m going to read an extended passage from Edward Ongweso Jr’s illustrative article in Slate about the bank collapse, which is titled The Incredible Tantrum Venture Capitalist through Over Silicon Valley Bank, and we will link to that article in the show notes.
So Ed writes, “By now it is relatively clear what happened at Silicon Valley Bank. A pandemic bull run inflated the value of tech startups and the funds of investors, resulting in a tripling of deposits at the regional bank that specializes in the industry’s fledgling companies from $62 billion at the end of 2019 to $189 billion at the end of 2021. SVB wanted to put that money to work, so it bought up U.S. Treasury and mortgage bonds that would take years to mature, but serve as a relatively safe place to park its cash, as long as interest rates didn’t rise. They did rise, however. Multiple times.
For over a decade, low interest rates have allowed venture capitalists to accumulate huge funds to give increasingly unprofitable firms with unrealistic business models increasingly larger valuations. One 2021 analysis found that not only were 90% of U.S. startups that were valued over $1 billion unprofitable, but that most would remain so. Over the last year, rising interest rates to combat inflation have meant less free money for science fiction projects. Pressuring investors to change their entire approach and actually fund realistic ventures at realistic valuations with realistically sized funds and deals. Drops in valuations meant smaller checks, which meant smaller deposits at Silicon Valley Bank, and more and more withdrawals as startups ran out of cash themselves. It also meant the bonds SVB bought were now worth less than when purchased, so they’d have to be sold at a loss to generate some liquidity so that clients could withdraw their deposits.
On March 8th, the bank’s parent company, SVB Financial Group, announced it had sold $21 billion of assets at a $1.8 billion loss and was going to sell $1.75 billion worth of shares to help plug that hole. Its clients began to panic, cratering the bank’s stock price. And the following night, depositors tried to withdraw $42 billion effectively rendering the financial institution in solvent. By Friday, the Federal Deposit Insurance Corporation had taken control of SVB. This was dramatic, but in fact, it should have calmed down everyone who had money there. SVB serviced every level of the tech ecosystem. From venture capitalist who stashed their Smaugian hoards there to startups that kept operational cash or payroll or reserves there.
The FDIC, after all has a clear protocol for this that it reiterated in a statement Friday morning, get all the federally insured depositors their money by Monday, search for a buyer of the bank over the weekend, and if none was found, then auction off the bank’s assets and segments of operation. And yet what followed were increasingly baffling online tantrums from prominent investors who either didn’t seem to understand the well-established process or were trying to shift blame for the momentary crisis onto anyone they could.”
And we know what happened from there. In the span of a weekend, the Federal Reserve, the Treasury, and Federal Deposit Insurance Corporation announced that they would make sure that all depositors in two large failed banks, Silicon Valley Bank and Signature Bank were repaid in full. And as the New York Times reported, “the Fed also announced that it would offer banks loans against their treasuries and many other asset holdings, treating the securities as though they were worth their original value. Even though higher interest rates have eroded the market price of such bonds.”
now in the coming weeks, we will be taking a deeper look at the inner financial workings and the fallout of the Silicon Valley Bank collapse and the subsequent government bailout. However, in this installment of The Real News Podcast, there was one person in particular I really wanted to talk to just get their perspective on the historical context and the larger lessons of this entire saga. That person was Malcolm Harris.
Malcolm is the author of the new book, Palo Alto: A History of California, Capitalism, and the World, which I cannot recommend highly enough to everyone listening. Malcolm is also a freelance writer and the author of the books Kids These Days: The Making of Millennials, and Shit Is Fucked Up And Bullshit: History Since the End of History. He was born in Santa Cruz, California and graduated from the University of Maryland.
So here, without further ado, is my conversation with Malcolm Harris about the bonfire of the venture capitalists, the collapse of SVB and what this all means for Silicon Valley and for the rest of us.
All right, well, Malcolm Harris, thank you so much for joining us today on The Real News Network man, I really, really appreciate it.
Malcolm Harris:
Thank you so much for having me.
Maximillian Alvarez:
Well, as I told you already in the Twitter DMs, you were the first person who came to mind when I was watching this spectacular collapse of Silicon Valley Bank. And the raucous ghoulish chorus of tech bros and venture capitalists just screaming like banshees about the impending collapse of everything we know and love. If SVB went under, then lo and behold, as we talked about in the intro for this podcast, they got the bailout they were looking for. And so there’s a lot that is still in process here and a lot about this situation that is still unfolding and may very well in fact change by the time this podcast comes out.
And so I read the breakdown of the collapse itself from the article by Ed Ongweso Jr in the intro, and we’ll link to that in the show notes along with some other helpful articles that we found for folks listening who want some more of that deep tissue financial analysis. But I mean, Malcolm is someone that I really wanted to talk to get the bigger picture of this collapse. And when I say bigger picture, Malcolm is very well schooled in presenting that bigger picture as I hold his 700-page master tone, Palo Alto in my hand cannot recommend this book enough to anyone listening, you should definitely go and check it out. Not just because it’s a phenomenal read, but also because if you want to really get a sense of the history and culture and inner psychologies of Silicon Valley and Palo Alto, I can think of no better book to recommend than Malcolm.
So like I said, man, you were the first person I thought of when I was watching all this unfold, and I was like, “I wonder what Malcolm thinks about all this.” So I wanted to start. There was a passage late in your book, and this is on page 569. At the beginning of your chapter titled Blister in the Sun. I want to read from that really quick because I think it gives us a great jumping off point. So you write, “It’s difficult to narrativize the latest phase of Silicon Valley history from at least the time of Aristotle’s original outline in the poetic narratives have had a rising and falling action. We have the exposition, then conflicts build, peak and resolve, the end. How then to tell the story of Palo Alto, where the conflicts swell but never seem to crest? Here, Icarus dusts himself off and pivots to Zeppelin’s. The emperor’s nakedness revealed, he shrugs his shoulders and gets back to ruling.
When reporters and analysts have tried to jam the industry’s stories into the tragic plot line, they’ve been hubristic themselves. No less an informed observer than Michael Malone published a definitive 600-page book on the rise and fall of Apple in 1999. Despite how narratively convenient it would’ve been, Silicon Valley didn’t learn its lesson in the years following the.com bust, and neither did the capitalist who inflated the bubble in the first place.
As we’ve seen, post pop heavyweights like Amazon and Google picked up the broken pieces and made the best of them. The Y2K bubble looks like a great cautionary tale, but any capitalist who kept taking their investment cues from the collapse of Pets.com missed out on a lot of money. The growth that leaving firms have accomplished since then has almost fully obscured the Y2K bubble on the stock chart, reducing it to mirror first night jitters.”
Okay, so I want to talk about this question of narrative and where we build a narrative around the seemingly always coming, always impending collapse of Silicon Valley, right? Because we’re talking about not just the collapse of Silicon Valley Bank, but I mean we are also talking after a pretty tumultuous year for Silicon Valley. From the collapse of crypto, to the unveiling of Sam Bankman-Fried, to say nothing of Elon Musk driving Twitter into the ground. I mean, I guess I wanted to turn things over to you and ask, A, what was going through your mind as you were watching the collapse of Silicon Valley Bank? And B, where does this all fit into your understanding of the narrative of Silicon Valley in American capitalism?
Malcolm Harris:
Yeah, so we’ve seen, again, the deployment of this conventional rising falling action narrative for this latest debacle. And then it’s usually phrased around what we’ve seen both for the collapse of the stock prices and for I think the Silicon Valley Bank run that is downstream of that is a story about interest rates, that this is a product of the zero interest environment and people got hubristic and they were full of a bunch of money, 100 billion of which they put in Silicon Valley Bank. And then when interest rates changed as they were bound to, they were badly prepared for that in a number of ways, and now face the consequences first with the collapse of their stock price. And now secondly, with the collapse of their banks that were based on essentially those stock prices.
And this is the same, again, the same structure of the narrative that we’ve heard 100 times before, and yet somehow every time Silicon Valley comes out even stronger than it went in. And it’s hard to square this, if Silicon Valley has a total bubble collapse every 10 years or so, how does it keep getting larger? And we don’t have a good frame for understanding that one step backwards, two-step forwards action that we see in Silicon Valley all the time, and we can see it again in this case. And that’s what I was thinking when this first happened, which is who’s benefiting? Who’s going to pick up the pieces this time? And so we have a situation where, yeah, it was a existential event for one corner even of the tech industry, of the VC funded real fluffy tech companies that the Silicon Valley of Silicon Valley and their affiliates, but in the scale of the global economy, nothing like 2008, it wasn’t going to take down the country or whatever, even if they all went to zero and they all got totally screwed.
But you have a number of players not just in the industry, but in the larger ecosystem who are just as strong as they were before any of this happened and faced a situation where a bunch of people need help. Oh no, but there are a bunch of companies who needed bailouts. And so even before the federal government stepped in, I think we saw, and I think we’ll see in the coming days, more attention paid to people who stepped in and got really good deals because there were companies that were in trouble and in desperate need of cash. And they said… I’m sure there were all sorts of VCs who phrased it generously, even that like, “Oh, we’ll help you. We’ll backstop any of your immediate cash needs, we just need this additional percentage or this interest rate, or you’ll pay us back with this.” The same thing that we already see. And some of that was from Wall Street that was stepping in and looking to buy distressed debt for 60 cents on the dollar because they’re quick on their toes, but I think is also the Silicon Valley ecosystem that was ready to start regenerating and using this as an opportunity to kill off companies that no one is interested in saving, that aren’t worth saving at this point. It’s a reevaluation, it’s an opportunity for reevaluation, but there are capitalists who benefit from that reevaluation too.
Sure it’s going to cost some of these startups a bunch of money, and they’re paper net worth of some of the guys who run some of these companies is going to get cut down, but that means it’s opportunities for somebody else. And so that’s the way I saw it. And we’ll see that same, I think, one step back, two steps forward action. I don’t think tech is dead or Silicon Valley is dead, or very few of these guys are even going to face personal consequences, especially with this bailout. But even the bailout notwithstanding, I don’t think this was a big enough danger to the whole ecosystem. At the same time, they spent a lot of their political and social capital on this bailout, which I think was an interesting choice and speaks to the weakness of the associational mechanisms that ties these capitalists together. So that was also pretty interesting to me.
Maximillian Alvarez:
Well, let’s talk about that part for a second, because this was a very fascinating phenomenon to behold, right? I think I was joking with you before we started recording that it felt to me like I was watching Schrodinger’s billionaire on Twitter throughout this whole saga. Because I was watching this class of people, or a subset within a ruling class that seems very particular to Silicon Valley, but that has all the hallmarks of your traditional capitalists. So they’re a queer animal that, again, if you want to understand where these people come from, how they operate, you got to read Malcolm’s book, it’s worth it, I promise.
But I was watching these people, I don’t know, Bill Ackman and David Sacks or even Mark Cuban, these guys on Twitter who normally, and this is part of the mystique, this is part of the mythology of Silicon Valley, as you write about in your book. There’s this hyper masculinist tech bro ethos. That sentiment is baked in to the capital philosophy of the VC class in Silicon Valley. The move fast and break things, the disrupt, the grow at all cost, yada yada, yada, yada.
So I’m watching this group of voices that traditionally spend all their time trying to convince me that they are, as my good friend George Costanza would say, the beautiful geniuses, the delicate geniuses, or the not so delicate geniuses who have all of the answers, who are on this alpha male plane, and who represent a side of the economy that other sectors should cower in fear to. At the same time, I’m watching these very same people just cry bloody murder and beg the fed to step in, force a merger or institute a bailout to stop this cataclysmic cascading collapse that they were all warning about.
And so I wanted to zero in on that moment for a sec. When shit was really hitting the fan and you know, had Peter Thiel basically starting a bank run, when things are really going south. Again, I hate to laugh, but again, there’s a lot of comedy to this fucking, pardon me, this shit show.
So I wanted to focus in on that moment and ask what was revealed in that moment about the larger structure of Silicon Valley, the DNA of how this industry or this industry, this sector, the economy actually works compared to what it tells us it is and how it works.
Malcolm Harris:
Yeah. I thought that moment was very interesting and now we know, I think we’ve got pretty good evidence as a result of reporting about that stuff that what we saw on Twitter on social media was the outcome of group chats. That these guys are in group chats and they’re talking to each other and the result of those group chats is they scared each other into starting this bank run. And it’s interesting that that’s the result of them conspiring behind the scenes was to scare each other into this bank run and not to backstop this bank and avoid a bank run which they could have done to spare themselves a lot of hassle. If the same guys who said, “Wait, we all got to run,” instead said, “Wait, we all got to stay,” and tweet about how it’s actually not a big deal and we can handle this, and pictures of cash stacked up, that they could have perverted this whole crisis.
And really made themselves look like the Marvel superheroes that you’re saying that they present themselves as all the time. As opposed to taking off their mask and going and pleading to Uncle Sam of all places, right? Immediately just so fast. And they proved that they had the power to do that, that they could get this bailout. They got it very quickly. And people should be very interested in that, I think how quickly they were able to get this bailout and create the narrative where that was what was to be done.
And even though the bailout itself was based on bank’s private insurance system, and so you could debate its bailoutness regardless, but they could have created an associational framework to produce that same theoretical bailout and averted the whole necessity.
In fact, if they read the book, they would’ve known the early history of Bank of America and how A.P. Giannini the founder of the Bank of Italy, which became the Bank of America, averted bank runs in his day, made California banks extraordinarily strong at a time when America’s banks were weak. He stacked a pile of gold up at the counter and said, “You want your money? Come get it. I got plenty of gold. I’m not scared of anything.” And people came, saw the gold and actually deposited more money into his banks during bank runs.
And instead of doing that, instead of making memes about how they were going to solve this problem themselves and about how everyone should buy Silicon Valley Bank stock because this was a great opportunity because Peter Thiel is a moron. They all fled for the exit. They were all going to trample each other on the way to getting out.
And I think that’s interesting. I think that partly speaks to the role of financial profits and promoters profits in this economy versus the same economy a hundred years ago, that they don’t have the same faith in the fundamental businesses that are backstopping this financial system that Giannini had 100 plus years ago when he knew that the orchards were good and that the investments that he was making in the future expansion of the American economy were good investments and that the agricultural cartels that he started up were profitable and were going to be profitable, and that these were positive investments. And that the people who are piling their money into these banks now and running these apparatuses, don’t necessarily have that same faith and don’t necessarily have those same outlets that they can have confidence in.
And Silicon Valley Bank was a great example, which is that they were investing their money back into the same venture capital funds that were depositing their money into the Silicon Valley Bank. And so it’s this ouroboros of financial and promoters profits that no one is quite sure how it’s connected to the actual productive economy and aren’t willing to take a risk on backstopping that whole system themselves. And in a crisis, turn immediately to the state. Not necessarily because the state has so much money, right? So much as that the state is able to provide this associational guarantee that they couldn’t muster together. Because again, the money’s there. It’s not, the money’s not there, and that’s what makes this whole thing so funny. I’m as big a critic as Silicon Valley as anybody, but this wasn’t a case where, I mean, it was a badly run bank and lost 10% because they made a bad bet that they didn’t hedge or whatever. But that’s what happened. It wasn’t the end of the world and it was interesting to watch these people treat it that way.
Maximillian Alvarez:
It was, and you also noted something that I think is really important. Again, if we’re talking about what this situation reveals about Silicon Valley and the capitalists who mill around there and whose fortunes are woven into the tech industry and so on and so forth, is that, yeah, it really showed how paper thin the faith is, even in the image that Silicon Valley presents of itself, right? And that will be dropped like that if it means saving my money or saving my investments. It’s like roaches when the lights come on.
Malcolm Harris:
Which is funny because they’re really good at teaming up together when it’s time to pass Prop Q in San Francisco to attack homeless people. They’re really good at some of this associational stuff when it’s Prop 22 and it’s extending their gig worker model. They’re really good at teaming up when it’s something that’s clearly in their shared interest when it’s attacking workers.
And so again, it’s interesting that at this crisis moment, they really were not prepared to back each other and deal with this. I think partly that’s because they’re coming off of this emergency. So if I think of someone like, okay, so who’s going to step in and rescue the tech industry and show leadership to that side? Who’s the person who could play the same role that a Giannini plays for the agricultural industry back in the day now with the tech industry, and you think of someone like Marc Benioff and Salesforce, it’s like everybody uses Salesforce. They’re all relating to each other through Salesforce. Salesforce knows everybody. And they’ve got enough of everybody’s money that they can backstop all sorts of stuff. But he’s dealing with thousands of layoffs, he’s dealing with a stock price that’s under pressure in the same way that a lot of tech leadership is right now. And so no one was really in a position to step forward and say, “I’m going to exercise leadership here,” to do anything except bailout your own companies. We saw a little bit of that, people trying to take responsibility for their own stuff, but no one, I guess had the juice to go up against Thiel and try and calm things down and post Avengers memes about rescuing Silicon Valley Bank and try to get all the Reddit people by Silicon Valley Bank stock.
Where was Elon Musk? Well, Elon Musk’s fucking busy, right? Some of these guys, they’re in crisis. And so part of, I think this was… This was downstream of the tech stock crisis in general because the bank was over-invested in tech and faced a downturn with the fortunes of the industry. But also because I think it depended on the associational functions of those leaders who are themselves in a bunch of trouble right now and have to deal with their own stuff as individual business leaders and don’t have the bandwidth or the juice to deal with these associational structures.
Even the Google guys, they’re back at Google trying to do something again, which is very new for them, like if they were on a yacht. Mark Zuckerberg wants to jump off a cliff, I’m sure by now, right? He’s having a bad time. And no one’s about to line up behind him.
Maximillian Alvarez:
Yes, Zuck ain’t leading anyone to the promised land right now. As Meta had mass layoffs, hemorrhaging people. I mean, you’re right, mean that was another really important thing to add in here is the layoffs in the tech industry that we’ve been seeing over the past year especially.
And I want to bring us around the final term by focusing on that point you made about Prop 22, because that really hits home. That was something that I was covering at my show, Working People, talking to different folks in the gig industry, talking to legal scholars like Veena Dubal ahead of the referendum itself or the ballot measure that was passed by the California electorate.
But yeah, it’s a really great comparison that you present there because as we reported here at The Real News and on my show Working People, yeah, the Silicon Valley machine really cohered and was working lockstep together to get Prop 22 passed in California. And companies like Uber, DoorDash, Postmates, they collectively amassed a massive war chest of hundreds of millions of dollars, making Prop 22 the most expensive ballot measure in California state history. And the whole point, as Malcolm said, was to… Because the gig model is basically illegal. So what do you do? You put it to a ballot measure and try to rewrite the laws to fit your exploitative business model so that you can legally create a permanent third class of worker who can legally be paid less than minimum wage. And there were just so many gross aspects to how Prop 22 itself got passed, what the intentions of Prop 22 were.
As we speak right now, I know that it was challenged in court, it was declared unconstitutional. Now that ruling has been reversed, so it’s in effect as I understand it right now, but the legal battle over Prop 22 is ongoing, but it really raises the question that Malcolm himself raises many times in his book Palo Alto, about literally the two Palo Altos that exists side by side. And the class divide within this tech utopia that so overly mythologized in our culture. And this was also something that really hit home for me when I was reading Malcolm’s book because again, I’ve interviewed a number of gig workers, ride-share drivers. Vanessa Bain, a great worker activist who works at Instacart or works for Instacart and led a valiant strike early in the days of COVID-19 to demand greater PPE for Instacart shoppers, so on and so forth. Vanessa works in Silicon Valley and she would talk about just the very apparent divide between the VC world, the glistening windows of the tech industry and the other the underworld, the world that working [inaudible 00:33:16] working people live in.
I wanted to ask you about that, Malcolm, with the time we have left, right, because obviously there’s a knee-jerk impulse when we watch Silicon Valley Bank collapse and all these VCs and tech bros just crying online. There is an understandable knee-jerk desire to enjoy the spectacle and to take some sort of, to get some schadenfreude out of this at least, and delight in the freaking out of these tech billionaires and so on and so forth. But I wanted to ask what this collapse means in the current state of Silicon Valley, means for the non VC class, the non-billionaire tech bro class. We mentioned the layoffs that have already been happening, but what about even your average working person? How much does this actually matter for the rest of us as we’re watching this stuff unfold?
Malcolm Harris:
Not very much. So I think people can laugh, and that’s okay. I think as far as I’ve been thinking about it, I think the effect on working people probably balances out, especially since we have this bailout. That the number of workers and the damage done to working people, which exists. Some people lost their jobs, people who work lost their jobs. It happened. Is offset by the damage to the tech sector, which is anti-labor. And so when you’ve got an automation company that lost its funding, and our whole premise was replacing labor with cheaper labor, that’s not bad for the working class that that company doesn’t exist, right? If we’re like my Flaco that makes sticks for guards for looking over a computer workers and hitting them on the head when they don’t look at their screen, if that company loses funding, that’s not bad for the working class. That’s good for the working class.
And so it’s important to remember that when Silicon Valley talks about innovation, for the whole history, even before silicon. Innovation in the labor model specifically to make it more efficient by attacking labor has always been part of that innovation. And before we had Silicon Valley as the capital of gig labor, Silicon Valley was the capital of temp labor. And we talk about early computers and we don’t talk about the peace work. People who were wiring those early computers in their unventilated kitchens in the Bay Area. Silicon Valley has always been about getting more from workers for less from the very beginning and be the origins before that beginning.
So when Silicon Valley does worse, it doesn’t necessarily mean that the working class is going to do worse just because Silicon Valley is very important to the economy and the people hurt when the economy does worse are also working people, it doesn’t quite work like that because they’re pushing towards something. They’re pushing towards an anti-labor future with every dollar of that investment. In fact, that’s what they are investing in. And so if there’s less money going into that investment in an anti-worker future, that’s okay. We can laugh about that. I think that’s fine. At the same time, we should see structurally why that’s not going to stop, why there’s still going to be more investment in Silicon Valley and why we’re going to see this one step back two steps forward motion.
And so we can laugh, but at the same time, we need to understand this isn’t solving our problem and that the situation might even be getting worse as a result of this. Silicon Valley looks bad right now because they’re screaming for help or whatever, but in six months they’re going to be better off than they are now, and we’re probably not. And so we need to understand that at the same time. So we can enjoy their loss of credibility that comes with this crisis. And I think we should, and we should recall that and press on that and keep that in our back pocket for sure. But I don’t think we’ve seen an actual weakening of Silicon Valley. In fact, this is a good illustration of that growth mechanism, which is you run into limits and you find ways around them, and that’s the only way capital knows.
Maximillian Alvarez:
Oh yeah. Well, that is a brilliant and poignant point to end on. I was going to say, I really want to have you back on now to have a full episode about the Y2K shit and comparing it to now.
Malcolm Harris:
Yeah. We got to do it.
Maximillian Alvarez:
Yeah. Okay, so we’ll run it back for that. I’ll spare everyone now. That’s a teaser. So stay subscribed to The Real News podcast channel and we’ll have Malcolm back on to talk about Y2K. But that is the great Malcolm Harris, author of the new book, Palo Alto:A History of California Capitalism and the World. Malcolm is a freelance writer and the author of Kids These Days: The Making of Millennials and Shit Is Fucked Up And Bullshit: History Since the End of History. He was born in Santa Cruz, California and graduated from the University of Maryland right down the road.
Malcolm, thank you so much for joining us today on The Real News Network. I really appreciate it.
Malcolm Harris:
Thanks again for having me and look forward to coming back.