Obama's Friends in Low Places

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That Barack Obama is such a kidder. No matter how awkward the moment, he's got just the right quip to purchase some wiggle room. Remember when his old Chicago banking buddy Jamie Dimon, the CEO of JPMorgan Chase, first ran into that bit of trouble over his bank's "London Whale" derivative scam? That scheme has already lost $6 billion with close to $1 billion more piled on by the SEC in fines last week after JPMorgan admitted it broke the law.

Well of course, being Obama, when the scandal first broke last year, the president picked a women's daytime talk show, ABC's "The View," to deal with the scams of his leading Wall Street backer. "JPMorgan is one of the best-managed banks there is," he told the "View" audience. "Jamie Dimon, the head of it, is one of the smartest bankers we got, and they still lost $2 billion and counting." 

Yes, counting; that $2 billion is now likely to end up around $16 billion given the future legal fees and possible payouts allotted to countering the myriad lawsuits connected with this admission of illegal activity. That's aside from the mortgage fraud, Libor rate rigging and energy manipulation cases still confronting the beleaguered bank. Thursday, on the same day that Dimon's bank got slapped with the SEC fine, federal regulators revealed that JPMorgan had agreed to pay $389 million in penalties and refunds to compensate for a credit card identity theft protection scam after $309 million already paid out in that case.

It should be remembered that this same Dimon, who appeared before a Senate committee wearing presidential cufflinks, once worked with Sanford Weill in engineering the reversal of the Glass-Steagall law to make Citigroup, a previously illegal merger of investment and commercial banks, possible. But despite his record as a leader in the radical deregulation of banking that caused all of the trouble, Obama turned to Dimon for direction on fixing the economy.

If you still require to be disabused of Obama's pretend populism, consider his decision to select William M. Daley, JPMorgan's representative in Washington, to be his White House chief of staff. It gave Dimon the key White House connection to accompany the passkey he already had at Treasury with his pal Timothy Geithner as secretary.

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