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Bank Bashing

A power has risen up in the government greater than the people themselves, consisting of many and various and powerful interests, combined into one mass, and held together by the cohesive power of the vast surplus in the banks.
John Caldwell Calhoun, Speech 1835
For the last quarter of 2010, JPMorgan Chase (JPMC) had a 47% jump in profits and since 2010 was such a good year it set aside $9.73 billion for its investment bankers’ bonuses. It is easy for pundits to decry such bonuses and at the World Economic Forum in Davos the bank’s president, Jamie Dimon, struck back at critics. He deplored what he described as “banker bashing” and said that bankers have become political whipping boys. He doesn’t seem to know why that is. To figure it out he could go back to JPMC’s actions in the early days of the foreclosure crisis and its unwillingness to help homeowners, whose homes were in foreclosure, modify their mortgages, an unwillingness described here and in countless other publications.
Alternatively Mr. Dimon might have considered events that would be described by Stephanie Mudick, an executive vice president in JPMC’s Office of Consumer Practices when testifying before the House Committee on Veterans Affairs on February 9th. She testified that the bank had overcharged approximately 4,500 members of the U.S. military on mortgages and had “accidentally” foreclosed on 18 service members’ homes. Stephanie expressed the bank’s “deepest regret over the mistakes we’ve made in applying these protections [for service members]. I commit to you that we will get this right.” (On February 15th it was announced that the bank would make amends by, among other things, not foreclosing mortgages on any active-duty military personnel. This will, of course, not help those who “accidentally” lost their homes or were overcharged. As one lawyer representing service members who had been cheated by the bank observed: “When I was prosecuting cases, I never had a defendant who got caught breaking the law that didn’t want to give back what they took and promise to lead a better life.”)
When berating his critics, Mr. Dimon knew about the lawsuit that was filed against the bank by Irving H. Picard in early December 2010. Mr. Picard is the bankruptcy trustee who is making claims against those who were unjustly enriched by their dealings with Bernie Madoff. According to Bloomberg News in his suit against the bank, Mr. Picard alleges that the bank knew of Madoff’s fraudulent operation and was, according to Mr. Picard’s attorney, “willfully blind to the fraud, even after learning about numerous red flags surrounding Madoff.

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