What Is Capitalism, By Jamie Dimon

Jessica Pressler has an interview with JPMorgan Chase  CEO Jamie Dimon at New York Mag  and it’s so good. So good! There are many great soundbytes in it, but I think this one, in which Dimon basically explains why he thinks banks need to be Too Big To Fail, is particularly interesting:

“There are huge benefits to size,” he says instead, a distinct air of tired-of-this-shit creeping into his voice. “We bank Caterpillar in like 40 countries. We can do a $20 billion bridge loan overnight for a company that’s about to do a major acquisition. Size lets us build a $500 million data center that speeds up transactions and invest billions of dollars in products like ATMs and apps that allow your iPhone to deposit checks. We move $2 trillion a day, and you can see it by account, by company. These aren’t, like, little things. And they accrue to the customer. That’s what capitalism is.”

What’s  pretty amazing to me from this interview is that EVEN THOUGH Dimon is obviously on a Tour of Apologies (“‘We’re still pleading guilty to being stupid and dumb, though,’ the PR guy sitting next to us interjects”), he still doesn’t seem all that apologetic?

This is basically How We Got Where We Are Today. It’s this attitude! Which is not evil or malicious, but still …  not entirely good and right and honest about what The Banks have actually done to this country. Okay, he admits, they did some stuff wrong! But overall, the message is that they’re all good guys—American guys, doing American stuff, in America. And the question for The American People Is: Do we believe Dimon? Do we forgive him for this one thing and … let him keep on keeping on? (As Heidi N. Moore explains in this explainer: “They acknowledge it was stupid, but the bank has not indicated that it will stop this kind of activity in the future.”)

Because here’s the thing about JPMorgan Chase: They are still making money (they are still making So Much Money).  As Dealbreaker’s Matt Levine said in a post on Friday: “JPMorgan lost $5.8 billion on whale-failing, and if you or I lost $5.8 billion we would probably be scaling back our vacation plans, but Jamie Dimon isn’t because JPMorgan had lots and lots more money where that came from. Capital!, in both senses of that exclamation.”  Says Dimon: “We didn’t even lose money this quarter. We earned $5 billion. The analysts estimate us having a record year.”



8 Comments / Post A Comment

I am fine with Dimon running his business like a capitalist, but I’m not fine with companies like theirs imposing harmful effects on society in order to get to that place. Chase oversees its fair share of directly unethical business (credit card lawsuits and mortgage foreclosures with fraudulent paperwork, to name an example), but otherwise the government needs to address the public interest by setting up the regulatory environment in which these companies operate. The government has failed to do that recently, particularly after guys like Jamie Dimon claimed their banks would fail (and take down the economy with it) if society-protecting rules were set up… while simultaneously these banks invested heavily in lobbyists, who seem to have had great success in weakening banking regulatory structure in the last 15 years.

So, basically, screw this guy.

sony_b (#225)

We do not forgive Dimon. He should be in prison.

Great, super deep analysis at Naked Capitalism: http://www.nakedcapitalism.com/2012/07/michael-crimmins-why-hasnt-jamie-dimon-been-fired-by-his-board-yet.html

It’s too bad corporate governance is such a boring topic, or even rich people would realize that Dimon is screwing them over.

@stuffisthings it’s also too bad he’s so charming and quotable <3 <3 <3

@Logan Sachon Charming and quotable you say?

Dimon is right about the economies of scale; size does matter when it comes to banking. And you can’t blame an industry that has built a very profitable business model. What is the banking model? How do they make their money or at least most of it; leveraging. Their sole purpose in life is to leverage money to make more money. That’s it. They are not in the business of processing checks, holding your money until you return or just process your loan application. They are there to make money with your money, they are in the money business and we’re all pissed off about it because for some reason we became confused and thought they were a non-profit agency here as do-gooders. If you want to be pissed off about something, be pissed of a the fact that they are using/leveraging our money to make billions and returning virtually nothing in return. You can’t blame them for a successful model. We should be blaming ourselves for blatant participation and NOT implementing something that works in our favor instead of theirs.
What we should all be doing is figuring out a better way to run our personal finances. Do you know that the principal portion of a homeowners mortgage payment represents approximately 25-30% of their take home income. That means only 25% of their income is being ‘leveraged’ against the most expensive debt they will ever own (btw; a mortgage loan is an annuity). What would happen if you could leverage 100% of your income against your debt everyday of the month. Do you know? Have you ever even thought about it? Corporations think about it and do it every day. Your bank is thinking about it and doing it everyday WITH OUR MONEY. If they can don’t you think you could save thousands in interest costs? Do you think we might have a better chance of actually paying off a home?
The answer to most of our financial woes is in better financial practices. Quit waiting on Wall Street or Washington to save you. Beat them at their own game; be a banker, not a borrower. Don’t blame Dimon learn from him. Try this; http://bit.ly/NWiOqI

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