Jamie Dimon's Raise Proves U.S. Regulatory Strategy is a Joke By Matt Taibbi

[jakeXT]

By Matt Taibbi
POSTED: January 30, 12:55 PM ET


If you make a big show of punishing someone, and when you're done they still don't think they have a behavior problem, you probably picked the wrong punishment. Every parent on earth knows this implicitly – but does the Obama White House finally get it, too, now, after Jamie Dimon's raise?

When the board of JP Morgan Chase gave its blowdried, tirelessly self-regarding CEO a whopping 74 percent raise – after a year in which the Justice Department blasted the bank with $20 billion in sanctions – it was one of those rare instances where Main Street and Wall Street were mostly in agreement.

Everyone from the Financial Times to Forbes.com to the Huffington Post decried the move. The Wall Street pundits mostly thought it was a dumb play by the Chase board from a self-interest perspective, one guaranteed to inspire further investigations by the government. Meanwhile, the non-financial press generally denounced the raise as a moral obscenity, yet another example of the serial coddling of Wall Street's habitually overcompensated executive class.

Both groups were right. But to me the biggest news was how brutal an indictment Jamie's raise was of the Obama/Holder Justice Department, which continues to profoundly misunderstand the mindset of the finance villains they claim to be regulating.

Read more: http://www.rollingstone.com/politics/blogs/taibblog/jamie-dimons-raise-proves-u-s-regulatory-strategy-is-a-joke-20140130

[Scuba]

1. Several decades behind bars may be more of a deterrent than fining them a fraction of their looting.

[blkmusclmachine]

15. When does the GOOD "Change" start ?!?!

[Ichingcarpenter]

2. Jamie Dimon has Presidential Cufflinks

http://www.huffingtonpost.com/2012/06/15/jamie-dimon-cufflinks-presidential-seal-senate-hearing_n_1600335.html


Which should tell anyone who really is in charge. Matt's article is right on as usual

[bahrbearian]

3. Are we paying Diamond to Model the cuff links.

[blkmusclmachine]

14. Where's Diamond's other hand?!?!

Oh, uh, okay...

[yurbud]

18. Great, painful Rubin and Obama pic.

[Fumesucker]

4. Holder and Obama "profoundly misunderstand the mindset of the finance villians"

Yeah, they misunderstand, that's the ticket.

[dixiegrrrrl]

5. I was going to say the same thing..

There is no misunderstanding, none at all.

all those fines are on paper, zeros and ones being moved from one side of a ledger to another.

Most of Dimon's bonuses are in future stock options, tho.
I would love to see those options become worthless.

[Ichingcarpenter]

7. Yeah that line got me too

After all Matt has written, I guess it was an inside joke of his.

[Doctor_J]

10. I think you're right

He and his readers will get this joke. The BOG will take it at face value.

[bullwinkle428]

6. A great big fucking deal was made of Dimon not getting a bonus in 2012,

and that was supposed to be seen as a kind of "victory" for the little people. Turns out they just decided to "defer" that bonus for a year, by doubling it for 2013, despite the $20 billion they had to pay in penalties.

[DeSwiss]

8. Sorry Matt......

...these corrupt pieces of crappola don't misunderstand a damned thing. They are very well trained in their duties. When the hell will you press guys wake-the-hell-up, huh? This is no accident and these aren't miscues and mistakes dammit!

- Good-cop and bad-cop are the same damned cop! Capice!?!?

K&R

[valerief]

9. Because we don't have Justice. We have Justice Theater! nt

[dreamnightwind]

11. Here's what he's saying they don't understand

...

People like Holder still don't understand that the leaders of these rogue firms have no problem blowing up their own companies and/or imperiling the world economy, so long as they continue to personally get paid.

...

Greenspan described his faith in corporate self-interest as the "whole intellectual edifice" guiding modern risk management. This edifice didn't admit the even theoretical existence of the corporate executive who behaves with capitalistically impure motives, i.e. the executive who treats his publicly-traded corporation like a mobster treats a restaurant, as a mark to be taken over and burgled for personal profit.

But as we all know by now, when business leaders can get paid tens or hundreds of millions upfront for deals that take years to pan out (or not), when personal compensation isn't tied to the long-term performance of the company, executives will tend to leverage their firms to the hilt in search of short-term profits, and they won't think twice about zooming past safety thresholds. This is irrational behavior from a corporate perspective, sure, but totally rational from a personal-greed perspective.

...

So even Alan Greenspan figured this out eventually, but apparently Eric Holder and Barack Obama still haven't caught on. They decided last year to make a big show of punishing JP Morgan Chase as a symbol of bank corruption, then forgot to punish the actual people who oversaw the bank's misdeeds. This is a little like trying to rein in a class bully by halving his school's budget. It doesn't work. Crimes are committed by people, and justice has to target people, too. Or else the whole thing is a joke, as we found out last week.

Very interesting take. When I first saw the line about Obama and his administration not understanding, I had the same reaction as other posts I have seen in this thread, I thought how they're not naive and it's probably Matt not understanding or being too kind about their intent.

After reading the article, especially the excerpts above, Matt's take on it makes a lot more sense, It's possible that the administration assumes these corporate executives are acting in the best interests of their companies, Obama and Holder are both capitalists who basically believe in our economic system rather than viewing it as a mob-run restaurant being squeezed for obscene executive pay.

Taibbi is saying to personally punish the executives rather than or in addition to the corporation, since the executives are looting and collapsing their corporations while personally making a fortune. Sounds right to me.

[jsr]

12. Recommend

[blkmusclmachine]

13. Nah, it's just more of Obama's 11-dimensional games.

[yurbud]

17. It will all come together 11 generations after we're all gone.

[yurbud]

16. Maybe he got the raise because the fines were far less than they could have been

And criminal charges don't seem to be on the horizon.

Make a fortune breaking the world economy with fraud and pay a fraction of those profits in fines?

In the eyes of fellow sociopaths that could be a good outcome.