He's at again -- and we're glad. A lot of smart people are dedicating their lives to fighting the corrosive effect of Wall Street on our economy and our democracy, but the best spokesman for that cause comes from Wall Street itself.
JPMorgan Chase CEO Jamie Dimon is still the poster child for today's morally degraded, self-entitled banker mentality. I don't know why he keeps talking, but he's the gift that keeps on giving.
At every major junction in the post-crisis debate about banking, Dimon has stepped in with a perfectly tactless remark that illustrates both the vacuity and the moral corruption of his industry. This week was no exception.
Dimon's own bank is the perfect case study in the degraded state of Wall Street's ethics. Bankers have been able to break the law and walk away by agreeing to settlements in which their shareholders, not they, pay the penalty for their misdeeds.
A Google search of the words "JPMorgan Chase settles" yields nearly two million hits. Narrow it down to recent events and you get items like these:
"JPMorgan a party to mortgage servicing settlement..." (that's the deal to settle massive mortgage fraud; by the way, where are the prosecutions?);
"JPMorgan settles AFTRA pension suit for $150 million" (which appears to involve more incompetence than fraud);
"JPMorgan Chase has agreed to pay $153.6 million
"JPMorgan Chase Settles Whistleblower Lawsuit Alleging Fraud in Veteran Loans for $45 Million."
That last one is a particularly odious lawsuit "alleging that it cheated military veterans and taxpayers out of millions of dollars by hiding illegal fees in veterans' home mortgage refinancing transactions and then seeking to collect on void government loan guarantees."
Running JPM's Priors
That's a lot of activity since we last reviewed JPMorgan's criminal record at the end of 2010. JPM's history back then included a settlement in which it had to forego three-quarters of a billion dollars in fines and anticipated fees after the bribery of public officials in (now bankrupt) Jefferson County, Ala. It also included a $25 million fine for selling unregistered securities in Florida, multiple whistleblower complaints, and allegations of currency manipulation.
As for the mortgage fraud charges that Dimon's bank just bought its way out from, accounts at the time told of a sleazy operation where untrained and inexperienced youngsters were hired to mass-produce paperwork that evicted people fraudulently from their homes:
JPMorgan's rap sheet is long and ugly, which leaves observers with a judgement they'll have to make for themselves about Dimon: Is he ethically challenged, or is he just an incompetent executive who can't get his own house in order?
At JPMorgan Chase & Company, they were derided as 'Burger King kids' -- walk-in hires who were so inexperienced they barely knew what a mortgage was ... revelations that mortgage servicers failed to accurately document the seizure and sale of tens of thousands of homes have caused a public uproar ...
Nice Little Office You Got Here, Representative. Hate to See Somethin' Happen To It
Dimon's latest foot-stamping tirade comes at the perfect time, as usual. American Banker reports that bankers have formed a SuperPAC which one lobbyist describes as a "big stick" in order to bully politicians into serving them more effectively.
"Congress isn't afraid of bankers," said another. "They don't think we'll do anything to kick them out of office." In case somebody missed the point, the lobbyist then added: "We want to change that perception."
Actually, progressive members of Congress are very aware of the bank lobby's power. Progressive Representatives have told me privately that they're very aware of the cautionary tale of Rep. Peter DeFazio, a courageous reformer in a "safe" district who suddenly found himself in a bitter election struggle in 2010 against an unknown an inexperienced opponent -- one with a huge campaign war chest funded by anonymous "Eastern" donors.
DeFazio survived -- barely -- after being forced to divert attention and resources to his bank-funded opponent. Many other progressives in Congress lack the voter familiarity and demographics that allowed DeFazio to hang on against such a well-funded onslaught, and they know it.
That's one reason why so many Democrats don't take more forceful stands against Wall Street -- that, and the chance to get some banker contributions, has helped bank executives rewrite laws, write loopholes -- and stay out of jail despite over whelming evidence of lawbreaking. But it's not enough. The new SuperPAC is meant to consolidate the bankers' stranglehold over our politics and our lives.
While My Banker Gently Weeps
Enter Jamie Dimon, right on cue. Dimon just complained that regulators "made the recovery worse than it otherwise would have been" -- which is not only wrong, but avoids addressing the issue of the recovery's cause, which was banks like Dimon's. Dimon added that the government forced banks to de-leverage ""at precisely the wrong time" -- which is precisely wrong. The government's real error was in not breaking up too-big-to-fail banks like Dimon's.
"Complexity and confusion should have been alleviated, not compounded," complains Dimon. I have a friend who works for JPM -- name withheld for his own protection -- who complained about the "mountains of paperwork" they've been forced to fill out. "I have a better solution," I told him. "We can just break you guys up. You wouldn't need to fill out the papers if your bank's failure didn't pose a threat to the entire financial system." He thought for a second and then said, "You're right."
On a parenthetical note: I just helped my mother take some money out of her modest Chase long-term savings account. If you want to talk about "complexity and confusion," Chase's own internal procedures are a good place to start.
Where are those "economies of scale" Mr. Dimon keeps promising we'll get from allowing banks like his to become so enormous?
Hit Me With Your Banking Stick... Hit Me, Hit Me...
Meanwhile, the new SuperPAC is filled with the language of bullies: "Big stick." "Make them afraid." "Surgical." ""Defeat our enemies." "Hammer these guys." Bullying has always gone hand in hand with a sense of victimhood, and today's bankers are no exception.
Their new PAC is called, without any apparent sense of irony, "Friends of Traditional Banking."
But what they represent isn't traditional banking at all. It's the new breed of Superpredator Bank created by deregulation, and it's exactly what must be stopped.
With Friends Like This
The ABA article says, "SuperPACs are considered pretty cutting-edge, which is not a place a lot of bankers feel comfortable."
But we know that's not true. Bankers, and their compliant political friends in both parties, felt comfortable deregulating in the nineties in order to promote what was then called "financial innovation" -- credit-default swaps, mortgage-backed securities, and the like. They still complain that regulation will stifle "innovation."
And all the major banks were happy to collaborate in MERS, the electronic mortgage casino that circumvented local laws and taxes while enabling the housing bubble and the explosion of banker mortgage fraud.
No, banks like the "cutting edge" just fine -- as long as someone else does the bleeding. That's why bankers like Jamie Dimon and SuperPACs like "Friends of Traditional Banking" must be stopped -- by friends of traditional democracy.
Richard (RJ) Eskow, a consultant and writer (and former insurance/finance executive), is a Senior Fellow with the Campaign for America's Future and the host of The Breakdown, broadcast Saturdays nights from 7-9 pm on WeAct Radio, AM 1480 in Washington DC.