The mainstream media seems to be in a rush of late to promote a popularity contest between Jamie Dimon and Lloyd Blankfein. After the president referred to Jamie Dimon as one of the "smartest bankers," they must have seen an opening for such a contest. Reporters have actually called to ask me and my colleagues who engage the banks on issues of social responsibility what I think of Blankfein's manners at annual shareholder meetings. "Is he a gracious host?" they want to know. Really? Too bad they don't focus half their time on the massive hangover that most of the country is still experiencing from the "party" of 2008 and the role and responsibility of their institutions and for this catastrophe.
Over the last two months I have had the opportunity to question both of these CEOs at the annual shareholders' meeting of their respective institutions. I was reminded of those experiences las week as I followed the hearing of the Senate Banking Committee where Mr. Dimon was the star witness. He was, gratefully, finally willing to apologize and use the word "sorry" in his prepared remarks. The media accounts of that hearing that I have perused vary widely, but several again chose to focus on how deftly the "rock star" witness handled the softball questions by all but a couple of committee members. One publication thought it important to feature a large front-page photo of the confident and smiling CEO surrounded by photographers as he prepared to testify. I find the press' fixation on the personalities and reputations of these executives staggeringly shallow.
My exchange with Mr. Dimon on May 15 at the isolated and out-of-the-way location for their annual meeting in Florida was pretty straightforward and just on the heels of the disclosure of a $2 billion dollar trading loss by JPMorgan Chase at the chief investment office in London. He offered no apology for the loss at that meeting. I heard him refer to it as "dumb" and a "serious error" and last week in the Senate hearing he said that the traders didn't fully understand the risk they were taking.
On that humid Tampa morning members of the press were sequestered in a parking lot opposite a group of demonstrators who were looking for restoration of their lost assets yet hardly any of the demonstrators were featured in their reports. They were, however, very keen to know how Jamie behaved at the annual meeting. Did we think his reputation as the smartest banker in the cosmos would take a hit? I'm surprised no one commented on his attire.
The Goldman Sachs annual meeting, where I had the opportunity to make a brief statement and ask a few questions, was not as well-attended by the media and they posted only perfunctory accounts of the meeting. The "muppet" fiasco long forgotten and the spotlight having been decidedly turned on Mr. Dimon, Mr. Blankfein was notably relaxed as he bobbed and weaved between the serious questions shareholders threw his way. We challenged him about Goldman's anemic extension of credit that many attribute to the deliberate stonewalling of Dodd-Frank regulations. And there were serious discussions regarding the fitness of the incoming chair of the audit committee of the board, the lobbying and political contributions policy of the company and the large debt overhang that the citizens of Oakland are forced to bear as a result of an interest rate swap that city officials (read: "muppets"), signed with Goldman in 1997. But the next day we read only about the brief comic exchange Mr. Blankfein had with my colleague, Sr. Barbara Aires. He has a "quick wit" we were told. He is "remaking his public image."
It has become popular to write about efforts to polish the profiles of bank CEOs. Many have hired PR consultants to make sure we hear about every philanthropic deed they undertake, every sage word of financial advice they offer. Meanwhile the carcass of the Dodd Frank Bill, written to restore our confidence in Wall Street, lies rotting in the middle of Main Street while hard-working citizens continue to lose homes, jobs, health care and a secure retirement. The industry has inundated regulatory agencies with comments and when possible, is taking them to court. Take a look at the accounts of regulatory hijacking by the industry, the Office of the Comptroller of the Currency is a prime example, or the revolving door between industry, regulatory and government representatives.
But I digress. What's really important is that Mr. Blankfein is popular again and has terrific comic timing! He is a gracious host! As for Mr. Dimon, this momentary fall from financial grace is a mere speed bump on the derivatives superhighway. We can expect to read about his philanthropic works any day now.
What a tortured and colossal MESS we are in.