Old school: military-industrial complex.
New School: military-financial complex.
Pentagon Tries to Cast Bank Runs as National Security Threat
“When our financial system is under assault, that is a national security issue,” Senate Intelligence Chair Mark Warner told The Intercept.
Alles anzeigenThe next time banks need a bailout, they’ll have a new argument for why it’s necessary: national security.
In recent months, the Pentagon has moved to provide loans, guarantees, and other financial instruments to technology companies it considers crucial to national security — a step beyond the grants and contracts it normally employs. So when Silicon Valley Bank threatened to fail in March following a bank run, the defense agency advocated for government intervention to insure the investments. The Pentagon had even scrambled to prepare multiple plans to get cash to affected companies if necessary, reporting by Defense One revealed.
Their interest in Silicon Valley Bank stems from the Pentagon’s brand-new office, the Office of Strategic Capital. According to the Wall Street Journal, the secretary of defense established the OSC in December specifically to counteract the investment power of adversaries like China in U.S. technologies, and to secure separate funding for companies whose products are considered vital to national security. It enjoys special authority to use loans and guarantees not normally available to the Defense Department to attract private investment in technology.
The full extent of OSC’s authorities has not yet been determined, as its charter is still being drafted, an OSC official not authorized to speak publicly told The Intercept. OSC’s website identifies its mission as twofold: first, identifying critical technology areas, and second, funding those investments using investment tools. “These financial tools are new to the Department and will be complementary to ongoing technology innovation efforts,” the agency’s mission states.
OSC is so new that it does not yet have its own budget, but President Joe Biden recently requested $115 million in funding.
According to Defense One, the Pentagon worried about supply chain disruption and startups needing to stop work. But although SVB’s clients included tech startups, The Intercept was not able to identify specific Pentagon contractors whose viability might have been at risk. Major defense contractors like Northrop Grumman, Lockheed Martin, and Boeing gave no public indication that they had any cash in SVB.
Instead, it appears the Defense Department wanted to ensure that the entire venture capital system did not suffer a blow. It was an “opportunity to really get serious about growing that connective tissue between the national security enterprise and the commercial capital markets … and show that we’re good and sophisticated partners,” said Michael Madsen, acting director of the Pentagon’s Defense Innovation Unit, at a Reagan Institute event, as noted by Defense One.[...]
Na sowas.
