Yves here. The irony is delicious. Chief bank apologist Andrew Ross Sorkin accidentally elicited a damning admission from JP Morgan chieftan Jamie Dimon. But that also reveals Dimon’s confidence that he is a member of a protected class, which sadly happens to be true.
By Bill Black, the author of The Best Way to Rob a Bank is to Own One and an associate professor of economics and law at the University of Missouri-Kansas City. Originally published at New Economic Perspectives
I want to give a hat tip to a recent Wall Street Journal article that brought to my attention two damning admissions by JPMorgan’s (JPM) CEO and Chairman of the Board, Jamie Dimon. The irony is that Dimon was lulled into making these admissions because he was basking in the perfect calm created by the confluence of Sorkin’s and CNBC’s storied sycophancy at the one place on earth where elite bankers feel most loved, honored, and protected – the annual meeting of the ultra-wealthy in Davos, Switzerland. Sorkin was the only interviewer, so Dimon faced no risk of tough questions. It may well have been this perfect setting that caused Dimon to let slip the mask and reveal two illustrative sins of elite bankers reported in the WSJ article.
“A spokesman for J.P. Morgan declined to comment on the continuing investigations. Mr. Dimon said in a January 2014 interview on CNBC that it has been a ‘norm of business for years’ for banks to hire [ex government officials and the] sons and daughters of companies’ [controlling officers] and to give them ‘proper jobs’ without violating the law.
‘But we got to figure out exactly how to create a safe harbor for that so you don’t…end up getting punished,’ he told the interviewer, according to a CNBC transcript.”
Yes, you read that correctly. It has been a “norm of business for years” for multinational corporations to hire the “sons and daughters of companies’ [controlling officials]” and to hire “ex government officials” in order to secure the favor of those powerful officials for the banks. Dimon’s concern is that it is essential that firms should be able to continue to purchase this influence with other elites in this manner with no threat of ever “getting punished” for buying influence with such powerful foreign officials.” JPM’s priority is “to figure out exactly how to create a safe haven for that.” The elite firms’ “norm of business for years” is not an admission from Dimon’s perspective, but rather a claim of right. Anything that elite firms have done successfully for years to purchase influence with other elites (including hiring “ex government officials”) is obviously something that they have a right to continue to do – with total impunity from “getting punished.” It’s not bribery, it’s buying influence with powerful officials who run firms and government agencies and ministries.
I promptly found the CNBC interview transcript, and it was such a classic of its genre that one can see how Dimon could let down his guard and make these admissions, or as he presented them, legitimate demands on the U.S. government to create such a “safe harbor” for U.S. multinational corporations.
Two Good Ol’ Boys at Davos
The joy begins with the professional tone and distance that Sorkin brings to sycophancy. Dimon reinforces this professionalism throughout the interview. Their opening exchange sets the stage.
ANDREW ROSS SORKIN: Jamie Dimon, thanks for being here.
JAMIE DIMON: I’m thrilled to be here, Andrew.
The interview ends on the same high, professional tone.
ANDREW ROSS SORKIN: –thank you very much, Jamie. Appreciate it. Thanks.
Just two good ol’ buys shooting the breeze in Davos.
JPM’s “Chinese Princelings” and JPM’s “Purity”
Sorkin brings up the fact that JPM hires “Chinese princelings” to curry favor with their parents. Dimon responds that “I’m not going to through any of the current” governmental investigations of JPM. To Sorkin’s credit, he asks a follow-up about JPM losing a potential IPO engagement with a Chinese firm due to a “Chinese princeling” issue. Dimon responds with this a fabulous line: “we’re trying to make decisions that try to make us as pure as possible.” Yes, Dimon rebrands JPM as purer than Ivory soap. His very next argument is this is why it is essential that the governments create a “safe harbor” so that JPM can hire the princelings and ex government officials in order to curry favor with the elites that control firms and governmental agencies without any risk of “punishment.” You know, “as pure as possible.”
Sorkin Closes for the Killer Interview Question to Dimon
It’s an incredible set up for Sorkin. Sorkin pounces for the kill, leaping on his now helplessly hypocritical prey. Or, alternative B, he doesn’t actually listen to Dimon’s amazing answer to his question and instead interrupts the answer just as Dimon demands the creation of a “safe harbor” under which firms like JPM can continue to hire “Chinese princelings” and “ex government officials” for the express purpose of buying corporate and governmental influence without any risk of “getting punished.”
ANDREW ROSS SORKIN: Is there anything in this–
JAMIE DIMON: –getting punished.
ANDREW ROSS SORKIN: –whole thing that you’ve read that’s made you uncomfortable?
JAMIE DIMON: I’m not– actually I don’t want to go anymore into that one, yeah.
When Dimon blows off Sorkin’s inane question about whether he has read anything that has made him “uncomfortable,” Sorkin switches to the perfect Davos question. “Is the stock market out over its skis relative to where we are in the true economy?”
Who’s Your Daddy?
It never dawns on Sorkin during the interview that there might be something desperately wrong about Dimon’s belief that multinational corporations have the inalienable right to buy influence through their hires of “ex government officials” and “Chinese princelings” and that the duty of the U.S. government is to create a “safe harbor” for JPM’s officers so that they can be assured that they can freely buy influence with no risk of “getting punished.” There epitome of merit-based hiring at JPM’s China operations is based on the answer to the colloquial question: “who’s your daddy?”