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--:-- Georgia Howe: Another bank has failed in the wake of the Silicon Valley bank failure, sending some banking stocks into free fall on Monday. What does it mean for investors and will the crisis prompt the Fed to stop raising interest rates? I'm Georgia Howe with Daily Wire editor-in-chief John Bickley. It's Tuesday, March 14th, and this is Morning Wire.
--:-- John Bickley: After more than a thousand migrants tried to storm a bridge this weekend, the Lone Star State is cracking down on illegal immigration. Even if you've never committed a crime, you're going to face up to a year in jail, or maybe two if this is the second time. And if you're a criminal, up to life in prison in Texas, we mean business. We break down the incident from the weekend and discuss the recent state and federal action.
--:-- Georgia Howe: And rates of college attendance are plummeting. When did the trend start and what are the implications for the economy? Thanks for waking up with Morning Wire. Stay tuned. We have the news you need to know.
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--:-- Georgia Howe: Days after the second largest bank collapse in American history, the fallout continues as markets have tumbled and questions are swirling about the federal government's response to the growing banking crisis. Here with the latest is Daily Wire senior editor Cabot Phillips.
--:-- Cabot Phillips: Yeah, that is an understatement. With the collapse of Silicon Valley Bank and Signature Bank, we've now seen two of the three largest bank failures in U.S. history take place in the course of one week. And as expected, when markets opened Monday morning, Wall Street was in chaos. Numerous regional banks saw their shares take a nosedive as investors started to reevaluate their worth, and others simply sold off their shares in a panic. The selling frenzy was so frantic that it triggered an automatic trading pause for about a dozen regional banks in an attempt to prevent them from collapsing entirely.
--:-- Cabot Phillips: For example, Western Alliance Bank in Arizona saw their stocks fall 80 percent. First Republic Bank dropped 75 percent. Comerica fell 30 percent. And Zions Bank Corp fell 20 percent. But it's important to note it wasn't just smaller banks. The big boys were hit hard, too. At the start of trading, Wells Fargo and Citigroup reached down 4 percent. And Bank of America was down 3 percent.
--:-- Georgia Howe: All right, so the market's clearly spooked by this uncertainty. Right.
--:-- Cabot Phillips: We also saw a response from President Biden on Monday. What do you have to say? Yeah, the president was trying to walk a tightrope. On one hand, he wanted to assure people they'd be able to get their money back if they were invested in one of those banks that collapsed. But at the same time, he was careful not to use the word bailout when describing how the government would get people their money.
--:-- Georgia Howe: Biden's response was echoed by Treasury Secretary Janet Yellen and other federal officials who tried to alleviate concerns of a broader collapse. On that note, I spoke to Scott Shellady, a market expert and host of the Cow Guy Close on RFDTV. He told me on Monday that the fast, coordinated response from the administration is telling. The government trying to make us feel like it was a big deal. We got this. It's not going to be sending any sort of contagion. But the government came out with a bazooka gun last night. They had the Fed, the FDIC, the administration all coming out and saying nothing to see here. So I think that by their actions, the FDIC, the Fed, and the U.S. Treasury with Yellen, Those three coming out at the same time was a very powerful statement that says that they're the ones that are really worried.
--:-- Cabot Phillips: Now, we've talked a lot on this show about interest rates and how the Fed is hoping to fight inflation. What does this mean for those efforts? Yeah, that is the big question right now. Before last week, the assumption was that they'd continue to raise rates until inflation cooled and unemployment went up. But now that's all up in the air. As Shelly put it, the Fed is stuck between a rock and a hard place. Well, first of all, the Fed is going to give you a choice, right? And it's not a good choice. More contagion or more inflation. So if they decide to raise interest rates, they're going to hurt more banks. You could have more contagion. If they decide not to raise interest rates, depending on what the CPI and PPI numbers do this week, you could see more inflation. So either way, the consumer could get hurt here.
--:-- Georgia Howe: So I don't think being faced with a choice of inflation or contagion is a very good choice. I think they should continue to raise rates a little bit. And maybe if they want to, they can slow them down.
--:-- Cabot Phillips: Now, there are some who say the blame for the crisis lies with deregulation of the banking industry. Others point in a different direction. Tell us about that. Yeah, some on the left say that deregulatory policies during the Trump era, which cut red tape in the financial sector, are to blame for this collapse. For example, Senator Bernie Sanders said it was, quote, the direct result of an absurd 2018 deregulation bill signed by Donald Trump. Now, critics who disagree with that take say that much of the blame is with the federal government, but not because of deregulation. In their view, it was the government's decision to inject trillions of dollars into the economy that created this problem. Much of that money ended up with firms who then invested it in the tech industry, in this case Silicon Valley Bank, which created overvaluation and falsely inflated prices.
--:-- Georgia Howe: On top of that, much of the money that ended up in those banks was then invested in bonds, but those bonds were no longer a safe investment once the Fed began to raise rates, leading to the collapse we saw last week. So federal mishandling of inflation is the real problem in that view.
--:-- Cabot Phillips: That's what we're hearing from many on the right. Well, this is what feels like a precarious moment here. Cabot, thanks for reporting.
--:-- Georgia Howe: Anytime. That's Daily Wire senior editor, Cabot Phillips. Coming up, Texas proposes jail time for illegal border crossers. Internet providers are allowed to store logs of every website you've ever visited. Then they stitch together detailed profiles of your browsing history, online searches, and location data. They can legally sell this to anyone. But ExpressVPN reroutes your internet connection through their secure servers, so your internet provider can't see or log what you do online. If you believe your data is your business, secure yourself with the number one rated VPN on the market. Visit expressvpn.com slash wire and get three extra months free.
--:-- Georgia Howe: Stunning video from El Paso, Texas, shows more than a thousand migrants rushing a bridge to try to cross over into the U The video highlights the disturbing situation at the border and the danger Border Patrol agents face in trying to maintain control of the region Joining us to discuss the efforts to secure the border is Daily Wire reporter Tim Pierce.
--:-- Tim Pierce: Hey Georgia, over the weekend over a thousand migrants rushed the Paso del Norte bridge that links Mexico with El Paso. The group included people of all ages. Some carried children on their shoulders. Most were stopped by fences, barbed wire, and armed guards using pepper spray. Mexican military police also tried to control the crowd on their side. But Texas Lieutenant Governor Dan Patrick said that the Mexican president needs to do more to control his own southern borders to stop the mostly Venezuelan migrants from ever-reaching U.S. soil. Their border is much smaller than our 1,900-mile border. They could stop these people from even getting into Mexico. That's what Mexico could really do to help.
--:-- Georgia Howe: Now, last week, we reported that President Biden was considering implementing family separation. Is that still on the table? Possibly. As of now, the most aggressive action is being taken by the states. For example, Texas is pushing the limits on what states can legally do to rein in immigration. A bill introduced last week would order police to arrest illegal immigrants.
--:-- Tim Pierce: Here's Lieutenant Governor Patrick on that. We filed a bill on Friday, Senate Bill 2424. If you come here and you have a conviction for a felony, you could face up to life in prison. This is a brand new crime. And if you cross illegally for any reason, up to a year in jail, the second time up to two years.
--:-- Georgia Howe: Now, is it actually legal for states to police their own borders independently? Technically, no. So this has a good chance of going to the Supreme Court. In the past, the court has ruled that only the federal government can enforce immigration law. This Texas bill, at the very least, would push the limits on that.
--:-- Tim Pierce: Pressure has built steadily over the past two years for Texas Governor Greg Abbott to be more aggressive about immigration. Over 30 counties have made some sort of disaster declaration over the border crisis, and some of those have gone as far as calling the flood of illegal immigration an invasion. Abbott himself has increasingly used the term to describe what's going on at the border. Some conservative experts and immigration hardliners have said that Abbott should declare an invasion under Article 1, Section 10 of the Constitution, which in theory would authorize Texas to take extraordinary measures without the federal government's approval.
--:-- Georgia Howe: Now, that legal theory has drawn a lot of criticism as well from experts who say that illegal immigration doesn't constitute an invasion. For context, up to this point for fiscal year 2023, there have been around 1 million migrant encounters.
--:-- Tim Pierce: Thanks for having me.
--:-- Georgia Howe: That was Daily Wire's Tim Pierce.
--:-- Georgia Howe: College enrollment has plummeted since the pandemic as more and more high school graduates are skipping college in favor of less student debt in careers that don't necessarily require a degree. Daily Wire investigative reporter Maraid Elordi is here with the details for us.
--:-- Maraid Elordi: Hi, Georgia. It's a pretty steep drop. Undergraduate enrollment was down about 1.2 million students in 2022 compared to before the pandemic. From 2019 to 2022, undergraduate college enrollment plummeted 8%. The recent drop is the steepest on record. College enrollment peaked back in 2009 at 70.1%. Now it's closer to 60%.
--:-- Georgia Howe: So what's driving the decline in college enrollment? Is this just a lingering COVID effect? Well, the pandemic was a big factor that put a damper on high schoolers' enthusiasm for higher education. Remote learning derailed a lot of students who were preparing to go to college. Some of them lost access to teachers and others who were helping them enroll. At first some experts thought high schoolers who immediately enrolled in college would enroll after a year or two but we haven seen that so far. Another clue that this isn just about the pandemic is that the decline in college enrollment started before COVID.
--:-- Maraid Elordi: Perhaps the biggest deterrent is soaring tuition prices and the massive lingering student loan debt that has come with those prices for many graduates. The average college graduate today owes $31,000. That's a 317% rise since 1971 if you adjust for inflation. In short, many millennials think their college degree was not worth the money, and this is influencing their younger Gen Z counterparts. Combine that with a tight job market and attractive signing bonuses, and it's not hard to see why some young people are jumping right into the workforce.
--:-- Georgia Howe: We should note, too, Gallup found that Americans had growing sentiments of anti-elitism and anti-institutionalism starting in 2015 that led to less faith in higher education as well.
--:-- Maraid Elordi: Now, what kind of effect is this expected to have on the economy if fewer kids are going to college? Well, some experts worry fewer college grads could worsen staffing shortages in fields like health care. Economists are also worried that people without degrees will earn less money over their lifetimes. On average, people with a bachelor's degree have earned about 1.2 million more over their lifetimes than people without a degree, according to one study. But experts point out that many factors affect this, including field of study, and there are still many people without a degree who earn more than their college-educated counterparts.
--:-- Georgia Howe: But students who are passing on higher education say the situation is shifting more in favor of those without the degree and the debt. The trend is also more pronounced in some states than in others. For example, Tennessee education officials were concerned after they discovered that only 53% of high school graduates were enrolling in college in 2021 compared to 63.8% in 2017, and they actually issued a call to action.
--:-- Maraid Elordi: So what are these kids doing in lieu of college? Do we have any data on that? It's hard to get specific numbers on that, but a recent Associated Press piece profiled a variety of would-be students, and it sounds like some are going the entrepreneurial route and starting their own businesses, while some are going to trade school, doing vocational training, or apprenticeships. Mike Rowe, host of the show Dirty Jobs, an advocate for trade-skilled careers, says it can be a rewarding path.
--:-- Georgia Howe: So when you talk about excellence, when you talk about craftsmanship, when you talk about all of those things that are fundamentally artistic in nature, then it's not just about putting shop class back in high schools, it's about putting the art back to the work.
--:-- Maraid Elordi: All right, well, Maraid, thanks for reporting.
--:-- Georgia Howe: Thanks, Georgia. That was Daily Wire investigative reporter Maraid Elordi.
--:-- Georgia Howe: Another story we're tracking this week. A levee breach on a California river continued to spill flood water into several communities on Monday as another heavy storm nears. Officials say the Pajaro River's levee rupture grew another 400 feet since it failed Friday night. Over 8,500 people were forced to evacuate and around 50 people had to be rescued as the water rose. The river separates Santa Cruz and Monterey counties about 70 miles south of San Francisco. That's all the time we've got this morning. Thanks for waking up with us. We'll be back later this afternoon with more news you need to know.
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