The Politics of Arrogance
I’m just sure Elizabeth Warren had Jamie Dimon in mind when she said this to the Democratic Convention:
Wall Street CEOs—the same ones who wrecked our economy and destroyed millions of jobs—still strut around Congress, no shame, demanding favors, and acting like we should thank them.
Could there be a more obvious strutter than Jamie Dimon? Just look at this picture of the guy, and imagine his voice as he gently instructs his inferiors on the Senate Banking Committee in the ways of the world. Ben Protess and Michael J. de la Merced should be ashamed of their headline: “Proud” JPMorgan Chief Apologizes. That wasn’t an apology. The point of Dimon’s testimony was that the London Whale Trades were just exactly what banks are supposed to do, except for the losing billions of dollars part. But CEO Worship is part of the deal at the New York Times.
Dimon shamelessly demands favors.
“There are huge benefits to size,” Mr. Dimon said. He noted that JPMorgan’s size allowed it to be “a port in the storm” during the market turmoil of 2008. “Big banks have a function in society.”
The United States, he added, has the “best, widest, deepest and most transparent capital markets in the world.” Cautioning against needless reform, Mr. Dimon said, “Let’s make sure we keep that before we do a bunch of stupid stuff that destroys that.
There are benefits to size? Share with the class, Jamie, what are they? More money for CEOs? More room for inflated egos? More flunkies kowtowing to you? It certainly doesn’t have anything to do with lending money into the American economy. Loans as a percentage of JPMorgan’s total assets fell from 32.7% in 2010 to 31.9% in 2011. 2011 10-K, p. 179. Consumer loans in all categories fell. Commercial loans increased from an inconsequential 2.4% of total assets in 2010 to an inconsequential 2.9% of total assets in 2011. See page 318.
Dimon tells Congress and regulators not to do stupid stuff that will interfere with his glorious business. I’m a lot more worried about the stupid stuff Dimon and his flaccid management team do. Under Dimon’s leadership, JPMorgan lost billions of dollars in its claimed area of expertise, derivatives trading. JPMorgan has been involved in every area of fraud and abuse revealed by investigations since the Great Crash, including bribery in Jefferson County swaps deals, manipulation of LIBOR, foreclosure fraud and fraud in the sale of RMBSs, MF Global, the collapse of Lehman Brothers, illegally foreclosing on members of the armed forces, money laundering, Bernie Madoff’s Ponzi Scheme … it’s a complete list of the major frauds in banking sector, and who knows how many more examples are hidden away in their files?
Even members of the financial elites like Sanford Weill, who assembled Citigroup, and Sally Krawcheck, who headed up Merrill Lynch, see that these companies cannot be adequately regulated. Weill wants to break up the giant banks, and Krawcheck wants drastic increases in capital reserves for the riskier banks. Personally, I favor long prison sentences.
But Jamie Dimon is in charge, strutting and preening and telling any reporter in earshot that Congress should really worry about doing something stupid in regulating his operation. The business press regurgitates that arrogance and smothers the stench of corruption with incense of praise waved at savvy bankers.
Banks and their allies share with Geithner’s Treasury Department a deep and abiding contempt for the ability of the American people to comprehend the financial system. The business press thinks that finance is like the Large Hadron Collider, intricately pieced together and operating on theories too complicated for the average human. It’s a lie. Banks make money by cheating people, not by lending them money. And no one goes to jail.