By Bill Huey
Junius Pierpont Morgan would have been proud of Jamie Dimon, CEO of his namesake megabank, after yesterday’s appearance before the Senate Banking Committee. After all, it was old Junius who once cowed the press into believing there wasn’t a financial panic happening when evidence clearly indicated otherwise.
In his great book, Money and Class in America (1988) Lewis Lapham recounts how Morgan’s typical high-handedness carried the day:
“During the panic of 1894, at a time when people literally were killing one another outside the New York Stock Exchange, the press sent a delegation of reporters to receive a statement from E.H. Harriman and J.P. Morgan. The reporters waited for three hours in the anteroom, their hats balanced politely on their knees. A secretary eventually brought them a single sheet of paper bearing the message, ‘The United States is a great and growing country,’ and then, below the signatures, a further advisory, ‘This is not for attribution.’ The reporters accepted the news with the humility becoming their station, much in the manner of Heine’s stockbroker bowing to Baron Rothschild’s chamber pot. Finding their ways back to their offices through crowds rioting in the streets, the reporters reassured their readers that prosperity was at hand.”
The Senate Banking Committee was similarly cowed by Jamie Dimon, who was by turns humble, arrogant, apologetic, defiant, and sticking to his story no matter what was asked. The senators, most of them as ignorant of high finance as a bunch of Capuchin monkeys trying to sing Bach’s Christmas Oratorio, gave Dimon a free pass.
Senators from what might be charitably termed the hick states -- including my own -- acted as though they had never seen a CEO before.
Dimon, a human redaction machine, stuck to his script almost religiously, wandering off only occasionally, as when he was confronted by some aggressive questioning from Senator Jeff Merkely of Oregon.
In that exchange, he fell back on the old Wall Street chestnut that JPM didn’t really need TARP -- they were forced to take it.
He also proudly informed Senator David Vitter that JPM bought Bear Stearns and Washington Mutual and still had the wherewithal to come through the Panic with a “fortress” balance sheet -- completely ignoring the fact that JPM was handed WAMU by the FDIC and given $29 billion by the Fed to finance the acquisition of Bear Stearns.
In other words, as Senator Robert Menendez of New Jersey noted earlier, “the fortress had a moat around it, dug by the American taxpayer.”
Reviews were mixed. The market rallied on the performance, and traders were generally buoyant. CNBC’s Jim Cramer sounded a typically contrarian opinion of Dimon, calling him a “loser,” and saying, “he was a loser when he went in, and he was a loser when he came out.”
Dimon obviously didn’t feel that way, mugging for the street cameras outside with a bobbing and weaving motion, as if to say, “Hah, they didn’t lay a glove on me!”
It even played well on the evening news, with ABC’s David Muir running a puff piece that portrayed Dimon as the product of a Greek immigrant family from Queens who made it big in American finance, when in fact Dimon grew up on Park Avenue and attended an exclusive prep school.
These kinds of facts are so easy to check that one can only wonder when and how the seeds of such corporate mythmaking were planted.
So, thanks to lots of political contributions and lackadaisical staff work by the Senate Banking Committee, the American public didn’t hear any answers to the important questions about what happened and what should be done to prevent it from happening again.
And that’s just the way Jamie Dimon wants it. But the optics are bad -- as the political gurus say -- and bad optics can make your halo seem more like a pair of horns.
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Bill Huey is president of Strategic Communications, a corporate and marketing consultancy and author of "Carbon Man," a novel about greed. |