JP Morgan CEO Jamie Dimon has never been one to shy away from the press. But barely two weeks after he boasted that he could defeat President Trump in a presidential race – inspiring speculation that the CEO of America’s largest bank by assets is shadow-campaigning for the Democratic nomination – Dimon is once again making the media rounds, sitting for an interview with CNBC’s Jim Cramer before delivering a widely reported address at the World Affairs Council in Philadelphia.
It was at this latter event that Dimon offered what was probably the closest he’s ever come to a mea culpa for Wall Street’s recklessness in the run-up to the financial crisis. With the US economy finally booming again after a tepid, nearly decade-long recovery, Dimon predicted that the public will require 25 years to get over the financial crisis and finally forgive Wall Street.
Still, he believes the government “did the right thing” by casting moral hazard aside and immediately coming to the rescue of the struggling banks, leaving American consumers to shoulder most of the consequences for their reckless behavior.
“It’s going to be 25 years,” Dimon, the CEO at JPMorgan Chase & Co., said Monday at a event sponsored by the World Affairs Council in Philadelphia.
Still, the government “did the right thing” to avoid a disaster, Dimon said, adding that the economy was facing the risk of another Great Depression.
Of course, as we have written extensively, not everyone agrees with Dimon’s sanctimonious comments about how “right” the government was in bailing him out, and we suspect it will be a lot more than 25 years before he or the government is forgiven, as Michael Hudson recently noted:
Today’s financial malaise for pension funds, state and local budgets and underemployment is largely a result of the 2008 bailout, not the crash. What was saved was not only the banks – or more to the point, as Sheila Bair pointed out, their bondholders – but the financial overhead that continues to burden today’s economy.
Also saved was the idea that the economy needs to keep the financial sector solvent by an exponential growth of new debt – and, when that does not suffice, by government purchase of stocks and bonds to support the balance sheets of the wealthiest layer of society. The internal contradiction in this policy is that debt deflation has become so overbearing and dysfunctional that it prevents the economy from growing and carrying its debt burden.
Trying to save the financial overgrowth of debt service by borrowing one’s way out of debt, or by monetary Quantitative Easing re-inflating real estate, stock and bond prices, enables the creditor One Percent to gain, not the indebted 99 Percent in the economy at large. Therefore, from the economy’s vantage point, instead of asking how the banks are to be saved “next time,” the question should be, how should we best let them go under – along with their stockholders, bondholders and uninsured depositors whose hubris imagined that their loans (other peoples’ debts) could go on rising without impoverishing society and preventing creditors from collecting in any event – except from government by gaining control over it…
President Obama, Treasury Secretary Tim Geithner and their fellow financial lobbyists at the Federal Reserve and Justice Department are credited with saving “the economy,” as if their donor class on Wall Street was a good proxy for the economy at large. “Saving the economy from a meltdown” has become the euphemism for saving bondholders and other members of the One Percent from taking losses on their bad loans. The “rescue” is Orwellian doublespeak for expropriating over nine million indebted Americans from their homes, while leaving surviving homeowners saddled with enormous bubble-mortgage payments to the FIRE sector’s owners.
What has been put in place is not a restoration of traditional status quo, but a reversal of over a century of central bank policy. Failed banks have not been taken into the public domain. They have been enriched far beyond their former levels.
Additionally, in what appeared to be another gesture of deference to Trump, Dimon said he agrees with the president that the US needs proper border security and immigration reforms.
He added that Trump is right about trade issues he has been raising with China, but wrong in using tariffs to address the problem.
Just in case you got the wrong idea, Dimon clarified to CNBC that, though he has no plans to run, he believes a CEO could make a good president, adding that Trump “was a CEO.”
“I would not say a CEO can not be a good president,” Dimon said in an interview with CNBC’s Jim Cramer on “Squawk Alley.” President Donald Trump “was a CEO,” he added.
“Jamie, you know what you sound like when you say these things, right? You sound like a politician,” Jim Cramer said.
“I’m a patriot,” Dimon said.
Watch CNBC’s full interview below: