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CNBC Treasures Jamie Dimon’s Enormous Bank

For some reason, Alex Pareene was booked on the CNBC Friday afternoon program, Closing Bell. It is baffling why Pareene, a senior writer at Salon, was asked to come on the show–though his appearance does, so far as we know, mark the only time a Baffler contributor has darkened CNBC’s sanctum of market idolatry.

One thing was undeniably clear from the segment’s outset: the show’s hosts had no interest in hearing his argument, which is that JPMorgan Chase and Co. CEO Jamie Dimon should lose his job. The segment, however, felt like Pareene was brought on to debate the Jamie Dimon Fan Club about whether Jamie Dimon should lose his job. The anchors, Maria Bartiromo and Scott Wapner, along with Fortune magazine’s Duff McDonald, used the very same defense that JPMorgan’s communications shop has been trotting out in defense of Dimon and his enormous bank.

Pareene’s argument is simple enough: JPMorgan Chase is beset by a number of embarrassing regulatory charges that make the company look terrible—perhaps because it is terrible. Recently, for example, the company settled with the SEC on a $920 million fine over the “London Whale” investigation, a case in which—crucially—the company had to admit wrongdoing. JPMorgan Chase is also working with the U.S. Justice Department to arrive at a potential $11 billion (!) dollar settlement over a host of investigations into the company’s practice of knowingly selling toxic mortgage-backed securities as safe investments. Also, this September the new Consumer Finance Protection Bureau and U.S. Treasury’s Office of the Comptroller of the Currency ordered the company “to refund $309 million to customers and pay $80 million in fines over alleged unfair credit card billing.”

Investigators are also digging into JPMorgan’s “Sons and Daughters” program in China, which openly celebrates nepotism and cronyism by hiring members of prominent Chinese families, thereby easing the bank’s dealings in the country. Pareene’s mention of this program provides the most comical (read: stunning) pushback in the CNBC segment, with the lackeys actually saying that nepotism is an ancient practice, and just the way things work. When Pareene is pressed to give “sources” for this so-called “bribery” and mentions the New York Times, Bartiromo sarcastically shakes her hands, makes googly eyes, and says, “Ooooh, the New York Times.”

CNBC’s main defense of Dimon’s reign at JPMorgan is that Pareene, and by extension all Dimon doubters, should “look at all the money this bank makes!” Specifically, how the shareholder value keeps going up.

Duff McDonald: [Pareene’s argument is] preposterous. The stock’s touching a ten-year high. It’s a cash-generating machine.

Maria Bartiromo: Should we talk about the financial strength of JP Morgan? The company continues to churn out tens of billions of dollars in earnings and hundreds of billions of dollars in revenue. How do you criticize that?

Aside from bizarrely badgering Pareene to pick Dimon’s replacement, the extraordinary amount of money the company has been making was the anchors’ main explanation for why this CEO, who is the target of a billion different investigations and lawsuits, shouldn’t lose his job. Implicit in that defense is that major regulatory fines and federal investigations are nothing for banks to be ashamed of and certainly nothing to change big bank culture over. According to this reasoning, fines and investigations are just the “cost of doing business.” If the fines can be paid off without making a severe dent in the company’s bottom line, then there is absolutely nothing wrong happening here.

This inside-the-bubble perspective shows how completely major Wall Street players—and their CNBC comrades—have eliminated any concern for how the public perceives their business practices. There is no longer any fear of a public backlash stemming from that great unpleasantness of five years ago. As Reuters financial reporter Felix Salmon puts it, it is as if CNBC no longer understands the space that JPMorgan occupies in the larger economic system. The media outlet sees it as just another company with a stock symbol that appears to be doing pretty well. Here’s Salmon:

Besides, banks shouldn’t be obscenely profitable: they’re intermediaries, and in an efficient economy their profits should be quite easily competed away. When bank profits are high, that’s a sign that the bank in question is extracting rents from the economy, rather than helping it to grow.


Eventually, Bartiromo asks Pareene, with a straight face, who would be the best CEO of JP Morgan “from a shareholder perspective”. Since, clearly, the shareholder perspective is the only one that matters. Except, of course, it isn’t. JP Morgan’s balance sheet shows assets of $2.4 trillion and liabilities of $2.2 trillion, leaving $200 billion in total stockholder equity. Sure, the shareholders matter — but even in terms of the balance sheet they only matter about 8.6%. And in terms of the systemic importance of JP Morgan to the nation as a whole, its shareholders matter even less. The country was seriously damaged by JP Morgan’s lies and misrepresentations about its mortgages — much more than it would be damaged if the share price went down instead of up. And the public has every reason to want the individuals running JP Morgan to be held accountable when it gets into serious regulatory trouble over and over again.

At one point, a frantic Wapner says that he can’t even believe that they’re having this conversation. Well, it’s your show, pal. I don’t know.

What Wapner, Bartiromo, and McDonald just can’t believe is that anyone would suggest that Dimon could deserve to lose his job. (If you’d like to see an in-depth analysis of how people acquire and parrot these strange beliefs on this ludicrous cable network, see Jason Linkins’ exhaustive CNBC takedown, “High Church Hustle,” from Baffler 21.) For those who have watched the financial stylings of JPMorgan Chase and Co. unfold over the past several years, the question we’re left with, the question we can’t even believe we have to ask is this: Why does an embattled company tangled up in near constant controversy and regular admissions of wrongdoing feel no pressure whatever to fire its CEO, or any of its other executives for that matter? Doesn’t this suggest that JPMorgan Chase and Co. occupies a dangerously powerful position in our world?