Thursday, May 24, 2012

The Jamie Dimon Saga

Jamie Dimon has made himself too visible.  He basked in the glow of a powerful Wall Street post and a left wing image.  Dimon was one of Obama's strongest supporters in 2008.  Like most of Wall Street, Dimon saw nothing wrong in loading up costs on employers, who had made the mistake of hiring workers.  After all, the workers that Dimon hires are high-end, highly skilled employees, who are largely unaffected by minimum wage laws, health care mandates, and a variety of worker protection schemes and union promotions (think "card check").  So Dimon, like Buffett, courted the media and made clear that he was a "caring" soul.  Now, Dimon is finding out, as Buffett will also, that this is not about "caring."  This is about a war on capitalism, waged from the White House.

Dimon had harsh words for Paul Volcker when the so-called "Volcker Rule" became part of the regulatory landscape.  Ouch!  Now, Dimon is getting blasted from the left.  See Simon Johnson's note in today's New York Times, where he quotes "Native-American" Elizabeth Warren and Socialist Bernie Sanders saying that Dimon should resign from the Board of Governors of the New York Fed.  Right!  And maybe put someone on the board that knows next to nothing about Fed Policy, like Elizabeth Warren or Bernie Sanders.

Ironically, J P Morgan should be praised, not villified, for owning up to a relatively minor trading loss that went awry.  J P Morgan weathered the 2008 crisis better than any other major investment bank and has been much more forthright than brethren banks.  But, no one cares about this.  All that matters is that Dimon and JPM stumbled and that is enough to bring forth the "no-nothings" demanding that something be done.  Whatever that something turns out to be, it will further damage the financial services industry and make it even tougher for a moribund economy to get off the mat and less likely that job seekers will find work.

But, who cares about the unemployed or the bad economy, when there is another rich guy to roast.

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