The Committee didn't ask Dimon why he should be considered an expert on effective banking with a track record of this kind.
The Committee didn't ask Dimon for more details on the "clawbacks," or revoking of past bonuses, he said the bank would impose on some executives. And they didn't ask whether his pay would be clawed back too, since the unit reported directly to him and he reportedly approved the trades.
The Committee didn't ask Dimon how that or any other reasonable measure could be taken against a bank CEO who also holds the position of Board Chair, thereby making it impossible for shareholders to rebuke or restrain him, or why regulations should not forbid a dual role which gives a banker such unrestrained power.
The Committee didn't ask Dimon what he meant when he said that "some issues" about the multibillion-dollar loss had already come to light when he told investors and analysts that it was a "tempest in a teapot" on an April 13 phone call, and whether this was a deception that rose to the level of investor fraud.
The Committee didn't ask Dimon why he continues to call the CIO's trades "hedges," which are in effect a form of insurance against adverse changes in the business environment (the classic example of a true "hedge" would be an airline that buys oil derivatives to protect itself against the losses it would experience if fuel prices soared unexpectedly), when the CIO's bets appear to be much more like gambling-style hedge fund behavior. (Sen. Merkley tried to ask him, but was flummoxed by the five-minute rule and his servile colleagues).
The Committee didn't ask Dimon how anybody, much less Jamie Dimon, could argue against stronger regulations after a fiasco like this one.
But then, why would they? As George Zornick reported, almost all of the Senators on the Banking Committee have received campaign contributions from JPMorgan Chase.
Closed-Captioned
The hearing should have been conducted with closed-captioning for the morally unimpaired, so that the real meaning of the questions and of Mr. Dimon's answers was clear to the audience. Unfortunately that closed captioning would have bordered on the obscene, since 90 percent of Dimon's responses would have led to a caption that read "I own you b*tches, so let's get this over with."
Senators Jeff Merkley and Bob Menendez tried to challenge Dimon, but were boxed in by the five-minute limit given to each Senator for questions and answers. Merkley asserted that JPMorgan Chase wouldn't have survived without the taxpayers' bailout. He's almost certainly right, but Dimon was allowed to repeat his assertion that JPM didn't need the money and only took it at the government's request "so that the other banks would take the money, too."
How did the Republicans do? Sen. Jim DeMint reassured Dimon that his colleagues "can hardly sit in judgment of your losing $2 billion." (The figure is actually $3 billion now, according to Dimon's reckoning, and possibly much more: But then, who's counting?) "You're not located in my state," said Sen. Mike Johanns of Nebraska, "and I doubt that you're probably considering locating in my state, although it'd be a great place for you to do business." Sen. Bob Corker of Tennessee just wanted to sit at the feet of the master: "If you were sitting on this side of the dais, what would you do to make our system safer?"
The role assigned to Republicans is that of openly servile solons who make no secret of their eagerness to serve at Wall Street's beck and call. "Washington exists to serve the banks," said Rep. Spencer Bachus of the House Banking Committee, "not the other way around." How did the Democrats fare?
Merkley and Sen. Bob Menendez of New Jersey struggled against the limitations imposed by the five-minute rule and their colleagues' servility. For the rest of them it was lob balls all the way. Dimon was allowed to strut, preen, and pontificate with an airly of thinly-disguised contempt -- an emotion that was well-earned on Wednesday.
Tell you what, Jamie: You can be on our bank's board if we can be on yours.
Not a single Senator asked Dimon about the propriety of his seat on the Board of the New York Gederal Reserve. JPM received $48 billion in secret, direct emergency loans, and it also benefited from the $107.3 billion in loans given to Morgan Stanley. All of that money was given to Dimon's institution while he held a power position on the Board of the New York Federal Reserve, and on the committee that decides the Fed's executives salaries and other compensation.
The Federal Reserve was created by an act of Congress. It is our bank, not theirs. Yet its boards are dominated by the very bankers that benefit from its generosity -- which is ultimately our generosity. The Committee didn't ask Dimon about that either.
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