The Agenda

Lawrence Lindsey on Why Jamie Dimon Has Become a Punching Bag

Lawrence Lindsey’s op-ed in the Wall Street Journal on the J.P. Morgan’s $2 billion trading loss on a $200 billion portfolio makes a number of provocative observations. 

(a) He contrasts J.P. Morgan’s loss against the $28.8 billion taxpayers have lost on the federal government’s auto-industry bailout;

(b) he notes that J.P. Morgan made a $5.4 billion profit last quarter, and that it had repaid TARP funds in 2009 (though of course calculating the actual value of TARP is not an entirely straightforward proposition);

(c) yet Dimon has become a lightning rod because, Lindsey suggests, he has become a vocal critic of regulatory overreach:

J.P. Morgan takes risks. Some paid off, some didn’t, and in the end they made billions in profit. But Washington demagogues want to convey a different message. If you are politically incorrect and lose a sizable sum in any of your divisions, you will pay a terrible and very public price.

In the marketplace, the natural response will be to take fewer risks even if that means a lower profit. It also means fewer loans, which means fewer small businesses, which means fewer jobs. And lower profits mean less tax revenue.

The most direct impact of a political climate hostile to risk-taking will be on liquidity. Washington is undermining the institutions that comprise the greatest capital market in history.

This reminded me of Amar Bhide’s argument that U.S. financial markets are plagued by excessive liquidity. And indeed, Bhide offered a very different, more critical take on Dimon in an interview with Bloomberg Television’s Inside Track. I recommend reading Lindsey and then watching Bhide. 

Reihan Salam is president of the Manhattan Institute and a contributing editor of National Review.

Most Popular

Politics & Policy

Fox News Anchor Shepard Smith Resigns

Fox News Channel's chief anchor, Shepard Smith, announced on air Friday that he would be resigning from his post after 23 years with the network. “This is my last newscast here,” said Smith. “Recently, I asked the company to allow me to leave Fox News. After requesting that I stay, they obliged.” He ... Read More
NR Webathon

Don’t Let Michael Mann Succeed

I  enjoyed the running joke of Jarndyce v. Jarndyce in the great Dickens novel Bleak House, back when I first read it. Little did I know that one day I and the magazine that I love would effectively be caught up in a version of that interminable case, courtesy of a litigious climate scientist with zero regard ... Read More
White House

What Is Impeachment For?

W hat is impeachment for? Seems like a simple question. Constitutionally speaking, it also appears to have a simple answer: to cite and remove from power a president guilty of wrongdoing. Aye, there’s the rub. What sort of wrongdoing warrants removal from power? I’d wager that the flames of ... Read More
Elections

Beto Proposes to Oppress Church with State

Beto O’Rourke’s presidential campaign is within the margin of error of non-existence, but in his failure he has found a purpose: expressing the Democratic id. His latest bid for left-wing love came at a CNN forum on gay rights, where he said that churches that oppose same-sex marriage should have to pay ... Read More