It had to happen sooner or later: Jamie Dimon, the bank CEO who's become the public face for our greedy and corrupt banking system, is openly backing the austerity plan pushed by former Senator Alan Simpson, the arrogant and abusive voice of our country's bought-and-sold elite "bipartisan" consensus. Will the Democratic Party led by Barack Obama stand up to that corporate consensus, or submit to it?
The Simpson-Bowles plan is designed to force the American people to pay for the wealth, greed and criminality of the banking class that Jamie Dimon has chosen to represent. The day after Dimon's testimony another institution announced that it was planning to impose the Simpson-Bowles austerity plan on us: the Presidential Administration of Barack Obama, as represented by Treasury Secretary Tim Geithner.
What did Jamie know?
The Senators dutifully made a show of their concern about JPMorgan Chase's multi-billion dollar losses. They were shocked -- shocked! -- that gambling was gong on in his establishment.
That hearing should have focused on the need for tougher bank regulations, which Dimon has been vigorously fighting, and on the epidemic of criminal behavior and mismanagement within his own bank. The Senators should have grilled Dimon on the disparity between his public statements about his bank's financial conditions and risk controls and what we now know was really going on behind the scenes.
It's not only wrong to intentionally make misleading statements of that kind -- it's also a crime. Yet the Senators never raised the question that should have been at the core of their hearing:
What did Jamie know and when did he know it?
The Committee never asked Dimon about his statement that the unit behind these trades, the "CIO," had been using a "new risk management model" that reduced its daily risk of potential losses by nearly half -- from $167 billion under the old model to $67 billion.
The Committee didn't ask Dimon why this change, which was never announced publicly, didn't constitute a material misrepresentation under securities law.
The Committee didn't ask Dimon to elaborate on reports that the CIO unit reported to him directly, bypassing the usual chain of command.
The Committee didn't ask Dimon about reports that he personally approved the trades in question.
The Committee didn't ask Dimon about the many documented crimes committed by the bank under his leadership -- crimes that have led to billions of dollars in settlements.
The Committee didn't ask Dimon whether he could reassure them that the crimes have stopped.
The Committee didn't ask Dimon whether he would cooperate with authorities to make sure that the people who committed these crimes within his organization are brought to justice.
The Committee didn't ask Dimon about his own legal obligation under Sarbanes-Oxley to affirm that all risk controls and anti-fraud measures are in place and adequate.
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