A lot of people have attacked JPMorgan Chase CEO Jamie Dimon over the years, including this author. After Tuesday’s shareholder votes at JPM, Mark Gongloff is right to describe Dimon as a “cult leader.” Gongloff quotes critics, like Public Citizen’s Bart Naylor who offer pointed and very valid criticism of Dimon and his board.
But that’s not the end of the story. It’s too easy to externalize responsibility by pinning the blame on villains. Every people has used the symbolism of demons in an attempt to extirpate something within themselves. The Jamie Dimon story shows that something more fundamental needs repair – in our economy, in our society, in us.
Don’t get me wrong. That isn’t meant to suggest that we’re guilty of fraud, or greed, or fiscal management. But we definitely have some work to do.
Men at Work
Chuck Prince. Robert Rubin. Lloyd Blankfein. Jeff Immelt. Brian Moynihan. Jamie Dimon. The bank CEO names roll off the tongue almost as rapidly as the billions pass algorithmically through cyberspace. What happens if one falls, as Prince did? Another takes his place before his precedecessor’s shadow has left the ground he was standing on.
Reality’s a drag. Reality’s for suckers, for losers, for regulators. Reality’s where banks go when they need taxpayers to pick up the tab.
And we use the male pronoun advisedly, since so far they’ve all been male. Male, and ambitious, and aggressive. To a man, in fact, they’ve embodied the aggression we profess to idolize as a society, in our leaders and in our athletes, until it gets us where we live.
If Jamie Dimon and his peers have any legitimate complaint about the condemnation that’s heaped upon them today, it’s this: A few years ago you praised us for doing exactly what you condemn us for today. You’re the ones who made Gordon Gekko a culture hero, these bankers might say, not us.
Can’t you people at least be consistent?
There are still those who come to praise Jamie Dimon, however, not to bury him. They’re all over the media, as in the story entitled “Dimon Is Forever” (which we found via Reuters columnist Felix Salmon.) A self-described friend of Dimon’s, Michael Burns of Lionsgate, even wrote a piece about him called – without irony – “Too Great to Fail.”
Before you condemn them both too harshly, remember: People in great fear sometimes overcompensate. And, as economist Robert Johnson notes in this compelling video discussion with Cornel West, our most powerful financial executives live in fear today. They feel, not without reason, that their way of life is being threatened.
A change in their way of life might be good for the rest of us, but those kinds of insecurities don’t bring out the best in people. Given the power bankers possess, that should worry us.
Fears notwithstanding, by any objective measure it was a good day for Dimon. A certain kind of person might consider that, plus a glass of brandy and a good cigar, a perfect day. But we have the feeling that Dimon’s looking over his shoulder a lot these days. The public and its leaders may be turning against him. There are real allegations of criminality in the works again, and he may be worried that he won’t be as lucky this time.
And Dimon’s an intelligent person. Somewhere he has to realize that what he’s doing isn’t right. That has to nag at a person, too. “We can be heroes,” says the Bowie song, “if just for one night …”
Jamie Dimon may be wondering if his lone night of heroism is coming to an end. And everybody faces another night at one point or another in their lives – a long dark night of the soul.
We Are Jamie Dimon
Those critical pieces about Dimon haven’t lacked for material: the epidemic of recurrent fraud and criminality during his tenure in the “buck stops here” chair. The trail of potentially lawbreaking mismanagement over the multibillion-dollar “London Whale” fiasco which seems to lead directly to Dimon’s door. The arrogance which led Dimon, as head of a bailed-out bank (yes, Chase was bailed out, denials withstanding), to demand sacrifice from America’s elderly and disabled in order to foot the bill for the financial crisis he and his peers created.
But Dimon isn’t the cause of our economic problems. He’s merely a symptom. He’s no more responsible for the wreckage he leaves behind than a surfer is responsible for the undertow of the wave he’s riding. Dimon may lack moral sensitivity, but then, that’s the character that got him where he is today.
Jamie Dimon’s publicity-seeking and arrogance has made him a target for people like me. But those among his peers who prefer to move under the radar are no different. The question we should be asking ourselves is: Why do we continue to tolerate this, or at the very least to tolerate it?
Welcome, Ladies and Gentlemen, to the Show That Never Ends
Dimon isn’t a CEO or financier in the usual sense – or, to put it more accurately, in the traditional sense. He’s a salesman, a showman, a master manipulator of political power. He’s a surfer on the waves of economic illusion. And he’s very good at his job.
He’s certainly displayed no more mastery over finance than any of his peers, despite his highly publicized claims otherwise. Nor has he distinguished himself as an ethical leader, a competent manager, or a high-minded public citizen, despite his equally arduous attempts to publicize himself as all of those things as well.
What Jamie Dimon seems to be, to all appearances, is a creature of our financial system. Nothing more, nothing less.
Human beings react to incentives, especially in the absence of a higher moral order. Dimon seems extremely sensitive to incentives – both in responding to them, and in creating them for other people such as his board, his shareholders, politicians and the press. And those incentives aren’t always financial. They can manifest themselves as power, or glory, or ego gratification.
If you want a full list, here’s a very ancient cheat sheet.
JPMorgan Chase is a perfect example of modern corporate leadership in its native habitat: at the center of a complicated matrix of human desires which it manipulates to suit its own ends. And you and I are allowing it to continue.
At Tuesday’s annual shareholders’ meeting, JPM’s board did none of the things that a responsible and competent board would do in a sane society or a rational economy.
It did not rebuke Mr. Dimon for seemingly deceiving shareholders – whom the Board purportedly represents – when he told participants on an investor call that the “Whale” case was “a tempest in a teapot,” despite knowing that billions of dollars have been lost.
It did not suggest that the bank’s as-yet unbroken string of repeated fraudulent behavior has brought dishonor on the institution, and therefore upon Mr. Dimon and themselves.
It did not demand that Mr. Dimon step down from his dual role as CEO and board chair, an unusual relationship which has contributed to the London Whale and other spectacular bank failures. That measure was defeated by more than three to one in shareholder voting.
It did not direct Mr. Dimon to refrain from investments which profit from human rights violations. That measure was defeated by more than twelve to one.
It did not direct the bank to disclose its lobbying efforts, which measures it was lobbying for or against, or the recipients of its lobbying largesse – even though those efforts are very likely hardly some of the bank’s largest institutional investors (and many of its smaller private investors as well). That measure was also defeated by more than twelve to one.
Nor did the board require Dimon and other senior executives to retain a significant portion of their stock until they reach retirement age, a measure which would have given them an incentive to behave in a responsible manner which protects the corporation’s long-term interests (along with the stability of the overall economy, the safety of its customers’ money, and the job security of its employees).
That measure was defeated by an equally overwhelming margin.
But then, why wouldn’t it be? Most of the bank’s investors don’t want Dimon and the rest of senior management to be thinking responsibly or for the long term. They want exactly what Dimon and the other senior executives want: numbers, and a story that looks good enough to pump up the stock price artificially and make them all money in the short term.
Use Your Illusion
That’s the dark secret at the heart of our broken economy: Companies don’t need strong fundamentals anymore. That’s especially true of too-big-to-fail banks, but it applies to most publicly traded corporations. They don’t have to be stable, or genuinely profitable. They can be rickety contraptions propped up by government indulgence. They can be subject to a myriad of risks – financial, political, structural – and still make a fortune for their managers and their shareholders.
You don’t have to believe in a company to make money from it in the stock market. You just have to make some other poor bastard believe in it enough to buy the stock.
That’s why Jamie Dimon got everything he wanted today. Many of the people supporting him may now his deficiencies and those of his institution inside and out. As long as the stock does well, it doesn’t matter. Bank stocks may not do particularly well compared to other stocks, but the entire market is an illusion propped up by mass delusion and mutual deception.
That’s why they love Jamie Dimon. His bank may be a mirage, a hallucination, an institutional sting meant to deceive sucker investors and delude the public into thinking they live in a sound economy. But those illusions are making them all a lot of money. Why on earth would they want to face reality at a time like that?
Reality’s a drag. Reality’s for suckers, for losers, for regulators. Reality’s where banks go when they need taxpayers to pick up the tab. Then they return to the world of illusion, where they can make money at other people’s expense.
Free Jamie Dimon!
We come, not to bury Jamie Dimon, but to praise him. We assume, at least for the moment, that underneath his defects he is as human as the rest of us. We all want to believe we’re doing great things with our lives. Dimon may even have believed it when he spoke these words today:
“(As) an insight of our financial performance, to the better part of this decade, our company has been doing great things. And during this period of economic volatility and social and political change around world, our work matters more than ever. As much as any other company, JPMorgan Chase is positioned to help individuals, businesses of all sizes, governments, not-for-profits and other partners see the opportunities and respond to the challenges of our times.”
The past decade which Mr. Dimon alludes to also saw repeated fraud against homeowners, a nearly one-billion-dollar bribery scandal in Jefferson County, Alabama, the LIBOR scandal, and the “Whale.”
But the human capacity for self-deception is powerful, especially when we seek to give our own lives meaning. Dimon is probably like most of us: a little bit of altruism alongside a lot of self-interest.
Isn’t it partially our fault that Dimon manages to satiate his altruistic impulse – or at least to inoculate himself against guilt – with half-measures like these? If society gave him different incentives – not just financially, but for his ego and his moral sense – would he use his abilities a little differently?
Sympathy for the Devil
I was in high school when the Rolling Stones released Beggars’ Banquet, the album with Sympathy for the Devil on it. We were listening to the record for the first time at a party when it came to this line: “I shouted out ‘Who killed the Kennedys,’ when after all it was you and me.”
I didn’t buy the Stones’ version of collective guilt then, and I haven’t changed that much since. Unethical or lawbreaking bankers are morally responsible for their actions. We didn’t break the law or throw people out of their homes. They did.
But even if we don’t share in the guilt, we share the responsibility. Did we do everything we could to stop them? They’re too powerful, people will say, and that’s true. But we have a responsibility to try, and to keep on trying, no matter what. We have a responsibility to engage in the great effort, which is a struggle for better regulation and a more humane economy. It’s also a struggle for hearts and minds – Dimon’s, the media’s, and our own. We should be demanding more – of the banks that serve us, of the media that entertain (if not inform) us, of the government agencies that work for us.
And we should be demanding more of us. These union pension funds, institutional investors at JPMorgan Chase, took action today to change the way business is done there. So did Father Seamus Finn of the Interfaith Center on Corporate Responsibility, who introduced one of the resolutions on behalf of a family trust with JPM shares.
More of us need to join them in concerted, constructive economic activism. We can also work to reduce our dependence on the kinds of loans that lead to financial servitude, to the extent that’s possible in this harsh economic climate,
Felix Salmon says Dimon “needs a boss.” But he has one, in our culture’s simple-minded pseudo-populist greed. That greed is made manifest in the form of Jim Cramer, the fast-talking TV huckster who serves as the clownish and loutish Id of the American economy. Gongloff quotes Cramer as saying, “If you voted for Dimon to lose the chairmanship, you voted for a lower stock. Who in heck would every [sic] do that?”
Who in heck, indeed – except people who are determined to build a better society and a better future? Jamie Dimon had a very good day on Tuesday. But we can have the future, if we want it.