Are you ready for some more outrageous Wall Street banking behavior? You may have heard last week that JPMorgan Chase CEO Jamie Dimon got a 74% raise. This is after the London Whale trade lost the company $6 billion in 2012. Then, last year, the company was fined $20 billion for financial misbehavior—also known as fraud or “stuff that would get regular people thrown in jail.” But Dimon got a huge raise. Hooray for capitalism!
Matt Taibbi wrote a great article yesterday, Jamie Dimon’s Raise Proves US Regulatory Strategy is a Joke. He noted that the “record” fine against the company didn’t make its board and top management repentant, but it did cause them to layoff 7,500 non-CEO class of line employees. And they froze the pay of the people who remained.
Taibbi goes into some depth about the problem. If we didn’t already know before, we should have known after the 2008 financial crisis: the CEO class does not run its companies in the long-term interests of those companies. Instead, they run them in the short-term interests of themselves. All the top people who caused the 2008 crisis went away with tens of millions of dollars. What does it matter to them what ruin they leave in their wake?
It would be one thing if these people were socially ostracized. That might make them less inclined toward their dirty dealings. But all of them do it. What’s more, no level of fine is ever going to make Jamie Dimon unwelcome on CNBC. These people are our royalty, so anything they do is acceptable, with a minor exception for a Bernard Madoff sort of scam. (Although even there, I think if Madoff had controlled the kind of money that JPMorgan Chase does, it might have been different.)
But I’m focused on that 74% raise. In my work life, I’ve had employers who were hugely impressed with my work. I’ve been given ostentation raises. But I’ve never gotten any raise even close to 74%. I’ve talked to people, and no one I know has ever gotten a raise like that. Supposedly, raises are given to stop an employee from leaving. But that clearly isn’t the case with Dimon. He certainly wasn’t going anywhere. It is just that people in our society assume that the rich are better and thus deserving of ridiculous compensation packages. And this is with Dimon already making gobs of money.
Of course, as Taibbi notes, JPMorgan Chase was “sending a message” to the justice department. Not only are they not cowed, but they are also willing to inflict a bunch of harm on innocent employees if the government messes with them. After six years of watching the bankers flip off the rest of society, it isn’t surprising. But it seems that the Obama administration is determined to be naive in these matters. A proper government would have thrown people in jail. Or at least tried!
The last five years have told the people of the United States everything they need to know about justice in America. If you reveal our torture program to the press, you must go to jail. But if you rip off people for billions of dollars, cause a financial crisis, and generally screw up the economy for a decade or more, you’re in the clear. In fact, you are probably rich and well respected!
American justice in action!
And the la-hand of the Freeeeee!
And the hoooome, of thhhhhe, braaaave!