J.P. Morgan was recently socked in the wallet by financial regulators who levied yet another multibillion-dollar fine against the Wall Street baron for massive illegalities.
Well, not a fine against John Pierpont Morgan, the man. This 19th-century robber baron was born to a great banking fortune and, by hook and crook, leveraged it to become the “King of American Finance.” During the Gilded Age, Morgan cornered the U.S. financial markets, gained monopoly ownership of railroads, amassed a vast supply of the nation’s gold and used his investment power to create U.S. Steel and take control of that market.
From his earliest days in high finance, Morgan was a hustler who often traded on the shady side. In the Civil War, for example, his family bought his way out of military duty, but he saw another way to serve. Himself, that is. Morgan bought defective rifles for $3.50 each and sold them to a Union general for $22 each. The rifles blew off soldiers’ thumbs, but Morgan pleaded ignorance, and government investigators graciously absolved the young, wealthy, well-connected financier of any fault.
That seems to have set a pattern for his lifetime of antitrust violations, union busting and other over-the-edge profiteering practices. He drew numerous official charges—but of course, he never did any jail time
Moving the clock forward, we come to JPMorgan Chase, today’s financial powerhouse bearing J.P.‘s name. The bank also inherited his pattern of committing multiple illegalities—and walking away scot-free.
Oh, sure, the bank was hit with big fines, but not a single one of the top bankers who committed gross wrongdoings were charged or even fired—much less sent to jail.
With this long history of crime-does-pay for America’s largest Wall Street empire, you have to wonder why Jamie Dimon, JPMorgan’s CEO, is so P.O.‘d. He’s fed up to the tippy-top of his $100 haircut with all of this populistic attitude that’s sweeping the country, and he’s not going to take it anymore!
Dimon recently bleated to reporters that, “Banks are under assault.” Well, he really doesn’t mean or care about most banks—just his bank. Government regulators, snarls Jamie, are pandering to grassroots populist anger at Wall Street excesses by squeezing the life out of the JP Morgan casino.
But wait—didn’t JPMorgan score a $22 billion profit last year, a 20 percent increase over 2013 and the highest in its history? And didn’t those Big Bad Oppressive Government Regulators provide a $25 billion taxpayer bailout in 2008 to save Jamie’s conglomerate from its own reckless excess? And isn’t his Wall Street Highness raking in some $20 million in personal pay to suffer the indignity of this “assault” on his bank. Yes, yes and yes.
Still, Jamie says that regulators and bank industry analysts are piling on JPMorgan Chase: “In the old days,” he whined, “you dealt with one regulator when you had an issue. Now it’s five or six. You should all ask the question about how American that is,” the $20-million-a-year man lectured reporters, “how fair that is.”
Well, golly, one reason Chase has half a dozen regulators on its case is because it doesn’t have “an issue” of illegality, but beaucoup illegalities, including deceiving its own investors, cheating more than two million of its credit card customers, gaming the rules to overcharge electricity users in California and the Midwest, overcharging active-duty military families on their mortgages, illegally foreclosing on troubled homeowners and … well, so much more.
So Jamie, you should ask yourself the question about “how fair” is all of the above. Then you should shut up, count your millions and be grateful you’re not in jail.
From John Pierpont Morgan to Jamie Dimon, the legacy continues. Banks don’t commit crimes. Bankers do. And they won’t ever stop if they don’t have to pay for their crimes.