Jamie Dimon: Wall St Titan and major dick

Macho man and JP Morgan Chase Chairman, President and CEO Jamie Dimon is regarded as a titan on Wall St, and a dick by pretty much everyone else. Dimon is a balls-to-the-wall capitalist and unapologetic advocate of the system that makes people like him rich, and brought the global economy to its knees in 2008.

In April 2o12, JP Morgan reported a loss in a London-based division, first calculated to be $2 billion. The estimates then kept going up, finally reaching over $6 billion. Dimon dismissed the incident initially, calling it a “tempest in a teapot”, then embarrassingly had to walk back his statement and accept his bank screwed up big time.

Thankfully, Dimon might get dealt a small dose of humility tomorrow as shareholder groups are calling for the bank to strip him of his chairman job. At the bank’s annual meeting in Florida, several groups including the union AFSCME, the NYCCO (New York City Comptroller’s Office) will ask bank shareholders to approve a proposal that splits the roles of chairman and CEO, giving the chairman job to someone outside the bank. This would essentially strip Dimon of much of his power and ensure he faced far more scrutiny in his job.

But of course Dimon wants none of this, claiming the event is a “sideshow” orchestrated by unions. Dimon wants everyone to understand just how how vital rich bankers are to the survival of America.  ”I am not embarrassed to be a banker” Dimon once told a roomful of corporate clients in response to attacks on his industry.

Quite the claim given the public had to put up $12.8 trillion to keep his industry from collapsing.

Dimon, described by the New Yorker “as an overgrown frat boy” has a long history of making dick statements, making his impending comeuppance all the more gratifying.

Here’s 9 quotes from the Wall St mogul that definitively prove that he is in fact, a giant dick:

1. “That’s why I’m richer than you.”

- Jamie Dimon Speaking to Mike Mayo CLSA analyst when asked whether he agrees that customers should feel safer with banks that have higher capital ratios (like JP Morgan).

2. “I have gotten disturbed at… some of the Democrats’ anti-business behavior, the sentiment, the attacks on work ethic and successful people. I think it’s very counter-productive.”

- Jamie Dimon on Meet the Press in 2012 forgetting that his industry almost wrecked the entire global economy.

3. “You read constantly that banks are lobbying regulators and elected officials as if this is inappropriate. We don’t look at it that way.”

-Jamie Dimon in his annual shareholder letter arguing that banks have the right to corrupt the political system with money (JP Morgan spent $7.5 million on lobbying in 2011).

4. “I am not embarrassed to be a banker. I am not embarrassed to be in business.”

Jamie Dimon defending the business of taking tax payers money and lending it back to them at extortionate rates.

5. “The term ‘too big to fail’ must be excised from our vocabulary.”

- Jamie Dimon forgetting that the public bailed out the banks because the were indeed, too big to fail (and still are).

6. “Giving debt relief to people that really need it, that’s what foreclosure is.”

-Jamie Dimon arguing that banks taking people’s houses and kicking them onto the streets was in fact, a good thing for people ruined by debt.

7. ”JPMorgan would be fine if we stopped talking about the damn nationalization of banks. We’ve got plenty of capital. To policymakers, I say where were they? … They approved all these banks. Now they’re beating up on everyone, saying look at all these mistakes, and we’re going to come and fix it.”

— Jamie Dimon in 2009 at Davos speaking about the financial crisis, forgetting that his own bank required nearly $100 billion in taxpayer help to fill its own lack of capital during the meltdown.

8. “Just because we’re stupid doesn’t mean everybody else was.”

— Jamie Dimon on the losses incurred by JP Morgan in 2012, rejecting the notion that more regulation is needed to prevent them happening again.

9. “We don’t think there are cases where people were evicted out of homes when they shouldn’t have been.”

— Jamie Dimon in 2010 responding to the investigation led by 49 state attorney generals into bank foreclosure practices. Along with several other banks, JP Morgan settled with regulators after widespread mortgage abuse was found and paid out a combined $9.2 billion to those it foreclosed on illegally.

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If you haven’t already read it, check out Kojo Koram’s excellent piece on the mythology behind collective debt. In it, Kojo argues that the concept of debt is ruthlessly used by those in power to maintain and solidify a massively stratified social structure based on ever widening wealth inequality. Once you understand how debt is used to control people, it gets harder and harder to justify the policies being foisted upon us by our political leaders. Yet advocates of austerity continue to justify it based on math that supposedly shows cuts  = growth during a recession somewhere down the line. However, actual statistics show the inverse is true. Just take a look at these shocking charts from the National Statistics Institute displaying Spain’s unemployment figures over the past 8 years. Spain has adopted strict austerity measures year after year to avert the crisis, yet the catastrophe is compounding to the point of utter disaster (h/t the Atlantic).

The first  looks at total unemployment:

And the second at how long people are remaining out of work:

The purple line showing people who have been out of work for over 2 years is scary beyond belief.

If this doesn’t KO the philosophy of austerity, it’s unclear what will.

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Debt: Used by the rich to control everyone else

Facts can be a real encumbrance when your trying to enforce austerity on the impoverished masses. Adherents of the ‘keep-cutting-until-it-grows philosophy’ of economics suffered a blow last week as the story emerged that a famed pro-austerity publication by Harvard professors Carmen Reinhart and Kenneth Rogoff was based upon faulty spreadsheet data which had skewed its subsequent results. That such basic computing errors lay behind ideas of Reinhart and Rogoff, who the likes of Paul Ryan and U.K chancellor George Osborne had cited as providing the intellectual authority for their policies, was the equivalent of atheists finding out Christopher Hitchens had just been resurrected by the new Pope and was converting to Catholicism. To confound the pain, the flaw in the spreadsheets wasn’t discovered by a rival Keynesian economics at another Ivy League powerhouse; it was found by Thomas Herndon, a 28-year old grad student at Umass, Amherst. It is easy to see why austerity politicians want to cut funding for all academia bar elitist institutions and traditional programmes. If you let too many of these curious little people into higher education, who knows what else they might unravel?

Reinhart and Rogoff’s popular book ‘This Time Is Different’ was based on their original paper titled: ‘Growth in a Time of Debt.’ Their ideas helped provide an axis upon which the narrative of global recession was reorientated away from a tale of financial sector incompetence towards a story of collective debt. For Reinhart and Rogoff, debt was everything. Regardless of the causes of the crash, for us to recover, we had to simply focus on reducing our debt-to-G.D.P. Ratio, regardless of the externalities of human suffering. This about-turn was employed to turn public rage internally, for as London mayor Boris Johnson told constituents, ‘the time for bashing bankers had come to end.’ If people wanted someone to blame for the cuts and falling living standards then they should blame themselves: we had all lived beyond our means. A simplistic conflation of sovereign debt with household debt was repeated by politicians on both sides of the Atlantic: i.e “think about it like a mum saving on her weekly shopping.” Of course economies don’t work anything like households but that was beside the point. The aim was to make citizens look at the coming cuts to vital social programmes as the price they had to pay for their own previous extravagance.

Politicians know the idea of debt carries a moral weight that is almost impossible to fight against. It delivers the debtor into the complete control of the creditor and if the debt can be imposed on a person for actions outside of their control, it can take away the ideological foundations for calling out any resulting injustice. Debt was the rationale by which Greco-Roman armies took slaves; the slaves owed the conquerors, who could have killed them, their lives and so their unending labour was payment for this debt. Debt is the basis on which Christianity demands obedience to God, continued submission is the debt that the sinner owes to Jesus for his sacrifice on the cross. What unites these two examples is that they are, like the best debts, essentially unpayable. Now we face another unpayable debt, the current sovereign debts of nation-states, which to the lay person seem as infinite as Jehovah, with its figures that rise into trillions of dollars.

Radical Greek Opposition leader Alexis Tsipras  described the global debt crisis as ‘so good that if it did not exist, the elites would have had to invent it.’ The idea that ‘we have to pay our debts’ makes the public reluctantly accept the closing of another library or another cut back in health care. Yet the narrative is disingenuous as politicians never mention that, unlike say a simple bank loan, sovereign debt will never be paid back. It is not supposed to be paid back, it is the motor via which all modern economies function. Apart from one year, the U.S the federal government has been in debt every year since 1776! The ‘communal sacrifice’ of austerity is not meant to pay back the debts of the nation, it is an ideological move aimed at crystallizing the structural inequality of the neoliberal era by breaking down the state funded step-ladders that had helped people improve their lives.

In his excellent book 5000 years of Debt, David Graeber undermines the authority of debt that Reinhart and Rogoff promote. He describes how throughout history, debt forgiveness has ended poisonous circles of suffering. The Occupy Strike Debt programme has began doing this on a small scale by buying up tens of thousands of dollars of personal debt from creditors and forgiving the debtors free of charge. However, despite Reinhart and Rogoff’s work being weakened, this latest hiccup to the proponents of global austerity is likely to have little impact on their policy ideas; ‘we are cutting to pay back your debt’ is simply too good of an argument to give up. Despite this embarrassing revelation and the continued failure of austerity in Europe these, Reinhart and Rogoff have defended their original position. This is because their ideas are less about details and more about providing a framework to justify the pain that everyday people are enduring.

And they would have got away with it too if not for that pesky kid.

(Image via Shutterstock)

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Economists Kenneth Rogoff and Carmen Reinhart.

By Beverly Bandler

Regarding the Austerity Scandal, I wonder if you are as angry as you should be. I am outraged. This is indeed a significant story that the corporate mainstream media appears to be ignoring.

One reader tells me that he has the impression that the Reinhart-Rogoff scandal has not been widely reported. He says Jon Stewart had Thomas Herndon on his program. Herndon is the graduate economics student who revealed the flaw in the R&R data. Herndon said the error in Reinhart-Rogoff’s spreadsheet was so blatant that it was spotted by his girlfriend, a sociology student. (I don’t like to use exclamation points, but this deserves a couple: !!)

This scandal is important because the economic theory presented by Carmen Reinhart and Ken Rogoff was central to the Republican-led demands for sharp austerity even at the cost of continued high and painful unemployment. The two economists claimed that their data proved that government debt equal to 90 percent of GDP would strangle the economy, thus justifying extreme steps to bring the debt down immediately.

However, other economic studies of the same question came up with dramatically different results, showing continued GDP growth at that level of debt. Finally, Reinhart and Rogoff made their data available to a team at the University of Massachusetts at Amherst and the mystery was solved. The two economists had made an obvious computation error. In other words, the austerity hysteria that had fueled Republican insistence on slashing spending was driven by a botched economic analysis.

The Washington elite had made major economic policy decisions that have affected every single American based on a single paper that had errors so blatant that the mistakes were spotted by a sociology student? The elite policymakers then ignored all the reliable economics work of practically every reputable economist in the nation who questioned the Reinhart-Rogoff study?

Would you want a surgeon to do your brain surgery based on one new technique that had never been vetted and was seriously questioned by other surgeons, including some of the best in the field? But that is how the Republicans and some “deficit hawk” Democrats slashed spending and killed proposals to invest in infrastructure, fund research and rehire laid-off police, firefighters and teachers. God help us!

Not only political “elites,” but financial elites bought into the one paper. Bill Gross, manager of the world’s largest bond fund for PIMCO, in 2010 “warned that UK debt levels were too high, leaving gilts ‘resting on a bed of nitroglycerine,’” basing his warning on the widely cited R&R paper now under fire for “possible statistical errors.”

Gross has changed his tune: he is now criticizing efforts by Britain and much of the Euro Zone to cut debt rapidly with severe austerity measures, warning that such action risks stifling recovery. “The UK and almost all of Europe have erred in terms of believing that austerity, fiscal austerity in the short term is the way to produce real growth,” he stated to the Financial Times, “It is not. You’ve got to spend money.”

Slate business and economics correspondent Matthew Iglesias writes “the academic research bolstering the austerity drive was confused, at best.” It is important to remember that the “academic research” to which he refers was one paper, one research study.

Does this mean the political and financial elites have never read the economic history of the Depression? Updated and related empirical studies of same? That they have never read Paul Krugman, Christina Romer, Joseph E. Stiglitz and a host of other prominent economists and instead chose to embrace one paper “as gospel,” not vetting it, not reading the responses to the paper from other economists when it shot out of the gate?

Incredible!

Beverly Bandler’s public affairs career spans some 40 years. Her credentials include serving as president of the state-level League of Women Voters of the Virgin Islands and extensive public education efforts in the Washington, D.C. area for 16 years. She writes from Mexico.

(Originally posted at Consortium News)

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I have to confess, this is completely new to me. But the online-only currency currently going through a massive boom looks extremely interesting, and could pave the way for a completely new economy. Here’s a great vid briefly explaining how it works (h/t the Dish):

And as you can see, the currency doesn’t look to be slowing down:

Here’s Felix Salmon on the downside:

If millions of people started using bitcoins on a regular basis, the soaring value of bitcoins would actually be disastrous. You’ve heard of hyperinflation: this would be hyperdeflation. Take a gold bar valued at $600,000. At $60 per bitcoin, the value of that bar is 10,000 BTC. But then assume that bitcoins rise in value to $600 apiece, and then to $6,000, and then to $60,000 — as would have to happen if the fixed number of bitcoins was being used to store hundreds of billions of dollars in value. Then the value of the gold bar would plunge, in bitcoin terms — to 1,000 BTC and then 100 BTC and finally just 10 BTC. The same thing would happen to all other goods and services in the world, including your own salary. Everything would be constantly going down in price, if you thought in bitcoin terms.

And an interesting piece in Business Insider on why the explosive growth could continue, and why the potential upside makes it so worthwhile :

You may think there is no conceivable way that Bitcoin prices could ever hit $2,350.

And you might be right.

But ask yourself this question:

When Bitcoins were trading for $35 six weeks ago, did you think there was a chance that they would ever hit $235?

If you’re like most people, you didn’t.

If you’re like most people, you either had no idea what Bitcoins even were … or you cackled smugly about how Bitcoin was obviously a bubble and that all of the idiots stupid enough to buy Bitcoin would lose their shirts.

Well, just so you know, many of those “idiots” were laughing at you, too.

One of them reached out to me the other day.

He explained why he bought a boatload of Bitcoins when they were trading for much less than $35 apiece:

… over the long term the only two possible outcomes are 1000X+ or 0 — I don’t know the probability of each possible outcome, but I firmly believe those are the only two possible options … I actually don’t think $400 is a meaningful equilibrium point for it.

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British work and pensions secretary, Iain Duncan Smith, who earns the equivalent of $2436.96 (£1,600) a week after tax as a cabinet minister, believes he could live of $80 (£53) a week – the amount some people are forced to survive on in the UK. From the Guardian:

Defending the vast array of welfare reforms being introduced this week as part of its deficit reduction programme, Duncan Smith was asked on BBC Radio 4 whether, following an example of a market trader David Bennett, he could survive on £53 a week — the amount Bennett claimed he was left with to live on and roughly equivalent to the lowest rate of jobseeker’s allowance given to adults under 25.

“If I had to I would”, Duncan Smith replied. His claim prompted an online petition calling on him to prove it that chalked up 25,000 signatures in its first day.

Given Duncan Smith spends around $30.46 (£20) a week on travel, it’s quite hard to see how he’d make it work….

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What’s up with that?  At midnight, Google put out a video about how the video site was going to shut down soon and this got some people pretty worked up.  You can read more here.  Check it out here: 

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The EU agreement to bailout Cypress could turn out to be an incredibly important decision that could have far reaching effects on global financial markets. Why? Because the deal structure not only places much of the onus of the debt on the investors and ends the days where the small Mediterranean island acted as a tax haven for the wealthy – it stops the unrestricted movement of capital that has seen money fly in and out of Cypress with disastrous consequence.

For those of you frustrated with financial jargon, this basically means an end to the cowboy style capitalism that has created bubbles of extreme wealth, catastrophic amounts of debt, and too often complete financial collapse.

And that is damn important.

The Independent reported:

A top European official has said the Cyprus bailout, agreed in last-ditch negotiations over the weekend, should become the bloc’s default approach for dealing with ailing lenders.

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Internet mogul and founder of Vice, Shane Smith often talks about ‘the absurdity of the modern condition’, and claims his purpose at Vice is to highlight it through provocative journalism (annoyingly, Smith aims much of this at twenty-something hipsters). But if you spend a couple of minutes browsing headlines from around the world, you’ll see he sort of has a point.

Take the current economic crisis currently engulfing most of Europe – a self imposed orgy of ideological madness that is threatening to consign an entire generation to unemployment, poverty, and rage.

Greece is now so completely screwed by austerity measures imposed on it by Germany that not only is its homegrown pharmaceutical industry disintegrating, major international companies are withholding shipments to the country in order to protect their profits. The Greek economy is such a basket case that its government can no longer negotiate effectively with investors and traders for the benefit of its people. According to a report on TheRealNews:

Large corporations, including AstraZeneca, GlaxoSmithKline, Pfizer, Roche, and Sanofi have decided to withhold drugs from the Greek market.

In June 2012, a medicine shortage was reported in Greece. Drug companies accused EOPYY, Greek’s main health insurance fund, of owing them EUR 540 million. This February the shortage spread, and affects more drugs and more patients. Withheld drugs include, among other things, treatments for hepatitis, arthritis, bowel disease, hypertension, and high-cholesterol, as well as antibiotics and anesthetics.

Greece took action to reduce its expenditures in 2010 under severe pressure from its debtors, cutting health costs by 21.5%. This meant that they could only buy drugs at a lower cost, betting the gigantic pharmaceutical companies would swallow the losses given they would still be making a profit. Instead, the companies decided that rather than ensure people could get treatment for serious ailments like cancer (while still making money), they would rather protect their business model of extracting as much profit as possible at all times. According to TheRealNews report,

The corporations are worried that Greeks will export the cheap drugs to other European countries. Because of the E.U. trade rules, the drugs could be exported without customs and sold for a lower price in other European countries, thereby threatening the profits of the corporations also in countries which were hurt less severely by the economic crisis.

So Greece is not only drowning under the weight of debt, big business is standing over it and pouring buckets of water on top for good measure. The mega pharmaceutical companies aren’t pulling out because they are losing money – they are pulling out because they are, for want of a better description, greedy bastards.

If  an alien was looking down and trying to figure out how difference species on earth organize themselves, they’d spend a good deal of time trying to figure out exactly what the hell human beings were up to. To describe the economic engine by which we produce food and materials to live on as schizophrenic would be an understatement. It is complete insanity. Human beings do not live in a world where resources are distributed according to geography or need. They are distributed by a never ending and psychopathic need for profit, regardless of the consequences to actual people.

If a village surviving off of locally caught fish is subjected to the dictates of market fundamentalism, their fish could very likely be sold elsewhere for higher profit. Under a free market system, this inevitably happens. What happens to the villagers? According to economists, they’re simply externalities, so they can starve or find jobs elsewhere. What matters above all else is the market. Somali fisherman are experiencing a similar situation, and instead of dying, they are resorting to piracy.

So then of course, we kill them.

Greece has sick people, and there are the means to help them. Yet if there is no money to be made, they can die. And even if there is money to pay for drugs, if the margins aren’t big enough, they can still go away and die.

The response to the massive failure of austerity has not been met with efforts to do anything differently. Instead, it has been met with a concerted effort to do more austerity. Predictably, it is creating more disaster, yet the law of the free market reigns supreme and the human misery continues unabated.

Cornel West once said:

In a time in which Communist regimes have been rightfully discredited and yet alternatives to neoliberal capitalist societies are unwisely dismissed, I defend the fundamental claim of Marxist theory: there must be countervailing forces that defend people’s needs against the brutality of profit driven capitalism.

Those countervailing forces are on their way to Greece and the rest of Europe. As people’s lives are trampled by the wandering destruction of faceless greed, they will look to other ideologies for stability and purpose.  The problem is, given the continent’s history, they probably won’t be good.

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Take Part profiles a ‘Panera Cares Community Café’ in downtown Boston, a restaurant where customers pay what they can. Founder and co-CEO Ron Shaich built the small chain of  cafés’on the simple premise that the businesses had to provide value to the communities they were in:

With locations now in St. Louis, Dearborn, MI, Portland, OR, Chicago, and Boston, clearly Panera Cares thinks it has a winning formula for giving those struggling with food insecurity a “hand-up.” But will other big chains follow suit? Shaich hopes so, but he wants public companies everywhere to begin to view corporate responsibility as something broader than returning value to their shareholders.

“Imagine a world in which Nordstrom’s or Gap are running the thrift shops. Or Home Depot is doing distribution in the context of natural calamities. A world in which our energy companies are as focused on prevention as remediation,” he says. “I don’t know how we have a business 50 years from now if we’re not taking care of the communities in which we live.”

People might think Shaich is crazy – after all, business are supposed to be about turning a profit above all else. But as Henry Ford figured out at the turn of the 20th century, having people who can afford your product is the only real solution to long term prosperity. Ford famously raised the wages of his employees for good reason – to expand as he put it, the ”ever-widening circle of buying”. Panera Cares Community Cafés may seem silly to hard nosed capitalists, but it’s an expanding business built on principles that seems to make sense for the people it serves, not just its owners.

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