The long-shot big hope for Wall Street reformers Wednesday was that JPMorgan CEO Jamie Dimon would trip up before the Senate Banking Committee and expose the need for tighter rules governing big banks. His firm, after all, recently lost billions making risky bets with depositor funds on the line.
Instead, with some notable exceptions, the senators themselves turned the cross-examination into a coronation, and exposed the extent to which elected officials still feel compelled to genuflect to powerful financial interests.
“You’re obviously renowned, rightfully so I think, as being one of the most, you know, one of the best CEOs in the country for financial institutions,” crooned Sen. Bob Corker (R-TN). “You missed this, it’s a blip on the radar screen.”Most of the fawning came from GOP senators who in addition to relying on Wall Street largesse remain engaged in a political campaign against President Obama’s 2010 financial reform law. But some Democrats also treated Dimon if not quite like royalty then perhaps as a trusted confidant.
Sen. Michael Bennet (D-CO) asked Dimon to sound off on the country’s budget woes. “I think you’re well aware of my concern about the fiscal condition of this country,” Bennet said. “I wonder if you could take the last couple minutes of this time to talk about how you see our relative position with Europe and other places, the political risk of our not accomplishing what we need to do in the fiscal side, and the upside if we could actually come together in a comprehensive way to address the long-term fiscal condition of the United States.”
His exchanges with GOP senators were even more saccharine. Sen. Jim DeMint (R-SC) — a tea party hero — gave Dimon a full pardon. “I really appreciate you voluntarily coming in to talk with us,” he said. “It is important that we talk about things happening in the industry. It helps us as we look forward and, hopefully, it will contribute to best practice scenarios in industry. I appreciate your emphasis on continuous quality improvement. We can hardly sit in judgment of your losing $2 billion. We lose twice that every day in Washington.”
Sen. Jerry Moran (R-KS) asked Dimon and his firm to be good corporate citizens, if only to avoid complicating conservative free market messaging. “How you managed JPMorgan is the business of your board of directors, your shareholders, but it does have consequences to those of us who believe in the free-market system, its value, its merit. I have the sense and I hope it’s the case that it is a responsibility you understand. [Your] behavior really matters in our ability to be an advocate for a free-market that creates jobs and economic opportunity and allows Americans to pursue the American dream.”
So concerned were the senators that increased regulations might burden Wall Street that in an exchange with Sen. Roger Wicker (R-MS), Dimon even offered to get neighborly with the people charged with policing his firm’s actions, to keep them well informed about financial regulatory issues.
“Me and lots of other folks, we’ll do whatever you want, we’ll even get apartments down here,” Dimon offered.
For reformers, that adds up to an opportunity missed. But that came as no surprise to one of the Democrats with a stake in strong financial oversight — Volcker rule author Jeff Merkley (D-OR).
“I think that if Dimon came in and surprised everyone … if he came in and said there are systemic issues that have been raised here, that I think do need to be addressed, it would change the conversation to have a champion among one of the major banks,” Merkley told TPM this week in advance of Dimon’s appearance before the committee. “I would be very surprised if we saw that testimony.”
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