Treasury Secretary Janet Yellen said Thursday that the capacity of the U.S. government to respond to and prop up failing financial markets was “decimated” by cutbacks enacted during the Trump administration.

Her remarks come in the wake of state interventions to save depositors at failed banks Signature and Silicon Valley Bank (SVB), which catered to a niche clientele of wealthy business people in the cryptocurrency and venture capital sectors.

Depositors were reimbursed for the banks’ losses well above the Federal Deposit Insurance Corporation’s (FDIC) $250,000 standard limit into the billions of dollars.

“When the President and I took office in January 2021, we inherited a financial stability apparatus at Treasury that had been decimated,” Yellen said at a meeting of the National Association for Business Economics.

“For example, I walked in to find an FSOC [Financial Stability Oversight Council] team that was less than one third of the size it was five years prior. In 2016, FSOC’s policy, analysis, and operations teams were fully staffed. By 2021, the analysis team had been eliminated,” she said.

Yellen touted the role of the state in the financial sector, sounding notes harkening back to previous eras of global finance that have been highlighted in recent weeks by some influential market commentators.

“Even in a well-regulated system, public confidence is key. When there are cracks in confidence in the banking system, the government must act immediately. This includes making forceful interventions, like we did. As I have said, we have used important tools to act quickly to prevent contagion. And they are tools we could use again,” she said.

How exactly her statements fit into the Biden’s administration’s wider economic policy, which was branded last year as “modern supply side economics” and meant to address inequality in the U.S. through public investment, is unclear.

Economic agenda and banking policy increasingly geared toward ultra wealthy investors

While contrasting rhetorically with older economic agendas of tax cuts and deregulation meant to spur private investment, the Treasury’s policy toward the banking business in recent weeks has followed a familiar playbook of prioritizing the needs of a highly selective group of business investors.

Yellen described depositors in SVB, whose FDIC bailout was bolstered by an additional line of credit from the Federal Reserve backstopped by taxpayer funds at the Treasury, as “highly correlated.”

Financial inequality in the U.S. is off the charts, with the rich and poor sharply diverging over the last 40 years. 

The income share of the bottom 50 percent of U.S. earners has fallen from around 20 percent to 13 percent since 1980 while the share belonging to the top 1 percent has increased from 11 percent to more than 20 percent over the same period, according to the University of California.

That represents a massive concentration of wealth in the hands of a few.

Cuts to social programs while bailing out banking are irritating voters

Meanwhile, austerity measures in the form of cuts to social programs like Social Security and Medicare hang in the balance as Republicans face off against Democrats in Congress over the debt ceiling, which threatens a U.S. default later this year.

The majority of Americans think the government spends too little on Medicare, Social Security and education in general, according to an AP-Norc poll released this week.

Meanwhile, bailouts of failed banks are widely disapproved of by Americans, other public opinion polls show.