This article first appeared in the Huffington Post, on July 8, 2015.
As the fifth anniversary of the Dodd Frank financial reform law nears, Wall Street remains defiant at worst and flippant at best to addressing its malfeasance in the 2008 meltdown. A couple of weeks ago, JPMorgan CEO Jamie Dimon gave career advice to young financiers at a UJA Federation fundraiser in New York.
Now, keep in mind that Dimon oversaw the bank through record-setting fines from the Department of Justice for a variety of financial frauds in 2013, including the now infamous London Whale fiasco. Subsequently his board rewarded him with a 74% raise.
Dimon regaled the crowd with an anecdote on the London Whale: how he ended up receiving a pep talk from New England Patriots Quarterback Tom Brady, who told him that everybody goes through rough patches. Dimon concluded, “Shit happens. Okay. And it’s going to happen to you.”
Financial crimes happen, as though there’s no personal culpability whatsoever. This is the gold standard to which young bankers aspire.
Jamie Dimon didn’t become Wall Street’s Wonder Boy by accident — he can be both brash and charismatic in defense of his proud, but beleaguered institutions. But he’s also frequently out of touch. Softly acknowledging fault for Wall Street’s role in the “catastrophe,” he said public ire was “somewhat” deserved and “a little bit understandable.” His analysis: “I do think it’s incumbent on all of us to do a slightly better job, so we don’t cause additional problems in the future.”
Slightly. 20 billion dollars in fines for financial crimes warrants more than a slight adjustment in behavior.
This flippancy to assuming meaningful responsibility, coupled with the drive to make as much money as possible, underpins the psyche of Wall Street. One would-be banker wanted to know just how lucrative a career in finance could still be:
I was wondering what the future of banking looks like from JPMorgan’s standpoint. Could it possibly be as attractive in the future for shareholders and employees as it was in the past with all, you know, this huge amount of government intervention and supervision?
Dimon assuaged his fears with a prediction: record profits in the near-term and dramatic growth in the financial industry in the next 15 years, with double the number of billion-dollar companies and double or triple the number of billionaires in emerging markets.
That’s just what impoverished countries in the throes of overwhelming income inequality need: more billionaires.
The finance industry, already enormous by percentage of the economy and corporate profits, and presumably individual banks like JPMorgan, will be getting even bigger if Dimon is right, which begs the question: Is JPMorgan too big to fail?
This reporter asked the vaunted banker whether a recent assessment by Goldman Sachs that JPM should be broken up was valid, and he explained that the current discount on his bank’s stock was caused by the “astronomical” regulatory, political, and legal burden on his bank, which “will go away.” Dimon did not explain how he came to that conclusion.
Senate Majority Leader Mitch McConnell has made no secret of his desire to repeal Dodd Frank. Now that Republicans have control of both chambers, the senator just might succeed. Is Jamie Dimon banking on it?
A full transcript of Dimon’s remarks can be found here. Subscribe to The Undercurrent on YouTube for more independent, on-the-ground reporting from Lauren Windsor.