The Unholy Alliance wastes vast sums of money

As early reports have made plain, JPMorgan Chase Bank has blundered its way to what is already a multibillion dollar loss. Once again, a Big Finance bank made witless bets. And, as we also know, Washington failed to temper the Great Casino during the Great Recession. Indeed, America’s political elite took bankster money and acted in the interests of the financial elite and America’s oligarchs. It has thus been business as usual for the most predatory banks, a general situation that makes Washington’s political failures with respect to Big Finance both notorious and tragic for the “lesser people” (Alan Simpson) in America and around the world.

There are silver linings in this story, however. Yves Smith pointed to one of them:

The real upside is that this may be the first real dent to [JPMorgan Chase’s CEO Jamie] Dimon’s image. The firm has gotten off scot free for dubious tactics during the Lehman and MF Global failures, and Dimon has taken to bullying central bankers and regulators (I’ve heard of incidents beyond the press reports of him browbeating Bernanke and later his Canadian analogue, Mark Carney). Dimon’s hyperaggression may simply by apparent success stoking an already overly large ego, or it may be the classic “the best defense is a good offense” strategy, of dissuading overly close scrutiny of JP Morgan’s health and practices. We’ll have a better basis for judging as the year progresses, since difficult trading markets will continue to test all the major dealers.

Sensible people always welcome the destruction of a personality cult when it surrounds a powerful person. Dimon would be no exception to this rule. Likewise, sensible people would welcome any event which diminishes further the aura of rational action which surrounds Big Finance. Wall Street may have rationalized tools but substantive rationality is not a virtue found therein. These institutions are predators, and their predation, based upon analytical mysticism, serves no useful and general purpose.

Americans should be so lucky if the Securities and Exchange Commission and Britain’s ‘private’ Financial Services Authority were to act rationally in this case. Unfortunately, it would be more realistic to expect Angels to solve our financial problems than it would be for Congress or Parliament to enact sensible legislation meant to rationalize America and Britain’s financial markets and institutions. This is a neoliberal world, after all. “There is no alternative,” as we were told.

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