The hubris and apparent sense of impunity of Jamie Dimon, CEO of JPMorgan Chase, and the heads of the other big bank is beyond belief. According to a March 14 article, "JPMorgan Faulted on Controls and Disclosure in Trading Loss," in the NYTimes.com, a recent Senate report concluded that:
After emerging from the financial crisis in far better shape than rivals, the bank saw itself as being above its regulators. The bank was so filled with hubris, Senate investigators said, that an executive once screamed at examiners and called them "stupid."
These are the people who brought the global economy to its knees, costing millions of people their jobs, their homes and their life savings. But they show no signs of remorse or sense of culpability for the damage they did. On the contrary, despite being bailed out by the American taxpayer, they are doing nothing but enrich themselves and their largest shareholders by buying back stocks, increasing dividends and continuing to award huge bonuses to their top executives. And, apparently, they see themselves as being beyond regulation. They may be right, of course, given that none of them has been held personally liable for their actions by the Obama Administration.
The President has been silent on this issue since 2009 when called Dimon and the rest together and warned them the he was the only thing between them and the pitchforks. Apparently, he and his advisors have since concluded that the big banks - much bigger now than they were before the crisis - are not only too big to fail but are also too big to jail. Reflecting, no doubt, the Administration's position, Attorney General Eric Holder justified inaction in this area on account of the potential destabilizing effect that full-scale criminal investigations of the banks could have. In recent Senate testimony, he stated;
If you do bring a criminal charge, it will have a negative impact on the national economy, perhaps even the world economy. And I think that is a function of the fact that some of these institutions have become too large.
Obviously, we should not expect to see Dimon, other big bank CEOs, or any of their senior associates in handcuffs anytime soon. So, where does that leave us? William Greider, in his article, "Sherrod Brown Goes After the Big Banks,"in the April 1 issue of the Nation, quotes Senator Brown as follows:
The four largest behemoths, now ranging from $1.4 trillion to $2.3 trillion in assets, are the result of thirty-seven banks merging thirty-three times. In 1995, the six biggest US banks had assets equal to 18 percent of GDP. Today, they are about 63 percent of GDP.
Breaking up these huge banks that are too big to fail, jail, or be regulated seems to be the only option on the table right now and Senator Brown, along with Senator David Vitter, is leading the effort to do just that. The two have introduced legislation that would not only limit the size of the largest financial institutions but also establish capital standards that would make all of them less vulnerable to the types of reverses that required their bailout by taxpayers in 2008.
Are the Administration and Congress behind these modest reforms? That remains to be seen but it will probably not occur without active public support. That is why all of us need to get behind the Brown/Vitter legislation, if we want to avoid a repeat - on a much larger scale - of the 2008 financial meltdown from which we are yet to recover fully. We also need to address the unprecedented and dangerous concentration of the country's financial resources in the hands of a few institutions that have become even more arrogant, unmanageable, and disdainful of regulation than they were five years ago.