No Excuse for losing $2 Billion

In spite of what some people will tell you, the reason that we are in the Great Recession, the reason that millions of Americans are out of work, the reason there was a downturn in our economy is due to irresponsible recklessness on Wall Street. The folks on Wall Street will have you believe that this was the “perfect storm.” No. This was the result of massive deregulation which was pushed by Wall Street and unfettered greed. Until we, the American public, recognize that as long as there are massive incentives (read – huge bonuses) to cut corners and take risks this will happen over and over again. When you’re risking somebody else’s money and have the ability to make millions and millions of dollars, why wouldn’t you take the risk? Of course you would.

From Robert Reich:

Ever since the start of the banking crisis in 2008, Dimon has been arguing that more government regulation of Wall Street is unnecessary. Last year he vehemently and loudly opposed the so-called Volcker rule, itself a watered-down version of the old Glass-Steagall Act that used to separate commercial from investment banking before it was repealed in 1999, saying it would unnecessarily impinge on derivative trading (the lucrative practice of making bets on bets) and hedging (using some bets to offset the risks of other bets).

Dimon argued that the financial system could be trusted; that the near-meltdown of 2008 was a perfect storm that would never happen again.

Since then, J.P. Morgan’s lobbyists and lawyers have done everything in their power to eviscerate the Volcker rule — creating exceptions, exemptions, and loopholes that effectively allow any big bank to go on doing most of the derivative trading it was doing before the near-meltdown.

And now — only a few years after the banking crisis that forced American taxpayers to bail out the Street, caused home values to plunge by more than 30 percent, pushed millions of homeowners underwater, threatened or diminished the savings of millions more, and sent the entire American economy hurtling into the worst downturn since the Great Depression — J.P. Morgan Chase recapitulates the whole debacle with the same kind of errors, sloppiness, bad judgment, and poorly-executed and excessively risky trades that caused the crisis in the first place.

In light of all this, Jamie Dimon’s promise that J.P. Morgan will “fix it and move on” is not reassuring.

Remember that banks like J.P. Morgan Chase are too big to fail. If they take ridiculous risks and fail, politicians will come to us with their hats in their hands and tell us, once again, that we need to bail out these big banks.

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ABOUT AUTHOR
Errington C. Thompson, MD

Dr. Thompson is a surgeon, scholar, full-time sports fan and part-time political activist. He is active in a number of community projects and initiatives. Through medicine, he strives to improve the physical health of all he treats.

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A Letter to America

The Thirteeneth Juror

Where is The Outrage Topics
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