By Bill Black, the author of The Best Way to Rob a Bank is to Own One, an associate professor of economics and law at the University of Missouri-Kansas City, and co-founder of Bank Whistleblowers United. Originally published at New Economic Perspectives
Jamie Dimon talked about his personal pain recently using the exact phrase that many of us have used to explain his personal anguish that “It’s almost an embarrassment to be an American citizen traveling around the world and listening to the stupid sh—t we have to deal with in this country.” The Wall Street Journal’s “Market Watch” described Dimon’s fervor.
“J.P. Morgan Chase & Co.’s outspoken CEO on Friday broke into an impassioned, expletive-tinged rant.”
The WSJ, in the introduction of an online video interview of Paul Gigot, its editorial page editor, termed it a “remarkable diatribe.”
Most United States readers share Dimon’s embarrassment at President Trump’s actions and words and can empathize with Dimon’s rant. Except, Dimon was not ranting about Trump’s actions and words that have dishonored America and everything that once made America great. Dimon launched his diatribe because Trump has been too slow in completing the destruction of those things that once made America great. The WSJ was praising, not criticizing, Dimon when they described his statements as an “expletive-tinged rant” and a “remarkable diatribe.”
Dimon said U.S. growth was held in check by a lack of policy momentum in D.C. that has failed to deliver a spate of pro-growth legislation that could help to boost an otherwise sluggish economy. “We have to focus on policy that is good for all Americans,” Dimon said, speaking Friday morning on a call with reporters to discuss earnings.
When Dimon calls for “policy that is good for all Americans,” one can be sure that he is calling for policies that will be great for Dimon and terrible for nearly all Americans. The context is that Dimon was complaining that U.S. growth was too slow.
The best economic estimate of the lost U.S. GDP over the course of the Great Recession is $24.3 trillion. Elite U.S. Bank CEOs led the three most destructive fraud epidemics in world history that hyper-inflated the housing bubble and drove the financial crisis that drove the Great Recession and caused this massive loss of economic growth. It is as if the arsonist that caused the firestorm that led to the largest forest fire in U.S. history that destroyed most of the forests of twelve states then held an expletive-laden rant denouncing the slow growth of the U.S. timber industry.
The arsonist metaphor is inadequate to describe Dimon’s “expletive-tinged rant” and “remarkable diatribe” because even social media would have treated the arsonist as a hypocrite and villain. The WSJ, however, thought Dimon was a prophet. Gigot hoped that Dimon would run as a Democrat for the presidential nomination in 2020.
Why was Dimon embarrassed “to be an American?” Dimon’s sentence immediately before that complaint shows the primary source of his embarrassment.
We have become one of the most bureaucratic confusing litigious societies on the planet.
Dimon is enraged that plaintiffs sued JPMorgan so often and so successfully for so many of the elite frauds that caused the financial crisis that drove the Great Recession and caused the massive loss of U.S. growth. It is not enough for Dimon that the federal prosecutors that Jesse Eisinger has portrayed as members of “The Chickenshit Club” in his newly published book refused to prosecute the millions of crimes for which JPM is criminally liable. It is not enough for Dimon that no prosecutor ever charged the JPM senior officers who led and covered up the frauds that drove the crisis. It is not enough for Dimon that the federal non-prosecutors did not require the resignation of any senior JPM officer for leading those frauds. It is not enough for Dimon that the federal non-prosecutors (and JPM’s board of directors) failed to “claw back” the bonuses that thousands of JPM officers received as those frauds’ proceeds. It is not enough that Dimon not only kept his job and his bonuses – he received huge raises for leading America’s largest criminal enterprise and (often) losing money for the shareholders.
Dimon’s hypocritical and dishonest expletive laden rant produced positive newspaper coverage for Dimon. Gigot spoke the most fawning words in favor of Dimon – urging the Democrats to nominate him for the presidency in 2020. Gigot’s reasoning reveals the alternative reality that one must embrace to be a WSJ editor. First, Gigot complains that the Obama administration’s response to the elite bank CEOs that led the fraud epidemics that drove the financial crisis was outrageous. Gigot is not upset at the lack of prosecutions, the ability of those CEOs to keep their jobs, or their ability to keep their bonuses (fraud proceeds). Gigot is not upset about the death of accountability and the rule of law for Wall Street elites. Gigot is enraged that Obama dared to sue the banks (but not the bankers) to get billions of dollars in fines even though those fines were a tiny percentage of the damage done by the CEOs’ frauds.
[T]he Obama administration was looking to extort money from all the big banks.
The WSJ editors believe it is legitimate for elite bankers to defraud their customers, creditors, regulators, and shareholders – and illegitimate to recoup even a tiny percentage of the fraud proceeds through civil lawsuits.
Second, Gigot praises Dimon as a modern “blue dog” Democrat and laments that blue (supposedly) have lacked any power within the Democratic Party for so “many years.” The phrase (‘blue dog’) describes Democratic elected officials from the southern and border states who support austerity and the assertive intervention of U.S. military power while opposing government regulations critical to establishing an effective rule of law. Virtually all “blue dogs” were also “New Democrats.” New Democrats were most common in the southern and border states. Bill and Hillary Clinton, Al Gore, and Tim Kaine are all leaders of the New Democrats and once he became President, Obama told the congressional caucus of New Democrats that, philosophically, he was a New Democrat. Other prominent New Democrats include Diane Feinstein, John Edwards, Jon Corzine, and Bob Kerrey. New Democrats have dominated the Democratic Party for three decades and continue to do so.
Wall Street would love to see that pattern of both major parties largely supporting Wall Street’s wish lists continue and the WSJ has its perfect candidate – Dimon. Dimon’s rant favored a four-part ‘platform’ that is Wall Street’s wish list – austerity, tax cuts for corporations and the wealthiest Americans, gutting the rule of law through the deregulation and desupervision, and making it impossible to prosecute or even sue fraudulent Wall Street elites and the corporations they control.
I note that the “blue dogs” are a vanishing species in Congress because conservative southern and border state voters have decided that if they believe in the Wall Street’s four-part wish list they should vote for formal Republicans rather than the ‘blue dogs’ that imitate Republicans on economic and military issues. Gigot never mentioned the inconvenient truths about the fact that we tried Dimon’s policies for most of the last 30 years. Dimon’s policies made key business sectors, particularly finance, powerfully criminogenic. These criminogenic environments produced the massive, but fake, growth of the two largest bubbles in world history, epidemics of elite fraud, the massive loss of GDP of the Great Recession, and sharply reduced growth through austerity and the perverse investment decisions produced by the related maladies of bubbles and epidemics of “control fraud.” If Dimon really wants to know why growth is so slow his research should begin by looking in the mirror. Dimon, his Wall Street peers, and the New Democrats are the problem, not the solution.