Dimon had little interest in joining Republicans in complaining that President Obama’s regulations destroyed capitalism as they knew it. In fact, he even had some kind words for the Dodd-Frank financial reforms.
“If we had done something remotely like Simpson-Bowles,” Dimon said in response to Sen. Michael Bennet, D-Colo., at the end of the hearing, “you would have increased confidence in America. You would have shown a real fix of the long-term fiscal problem. I think you would have had ... a more effective tax system that is conducive to economic growth.”
In fact, he said, not enacting such a plan “helped cause a downturn last year.”
“Mr. Dimon,” said Sen. Mike Johanns, R-Neb., it “occurs to me that an enterprise as big and powerful as yours, you’ve got a lot of firepower and you’re – you’re just huge.”
“You’re obviously renowned, rightfully so, I think,” contributed Sen. Bob Corker, R-Tenn.
Democrats, perhaps worried that Wall Street has been shifting its campaign largess to Mitt Romney and the Republicans, joined the sycophancy sweepstakes. Sen. Robert Menendez of New Jersey called JPMorgan Chase “one of the nation’s finest,” and Sen. Jon Tester of Montana told Dimon: “You guys know the industry better than anybody sitting up here.”
“Has Dodd-Frank more than marginally made our banking system safer?” Corker asked.
“You know we supported some elements – “ Dimon began.
“I know what you supported,” Corker snapped. “Has it made our financial system safer?”
“I think parts of it, in conjunction with higher capital liquidity,” the executive replied. “The financial system is safer today than it was in ‘07.”
Sen. Roger Wicker, R-Miss., asked if he could paraphrase Dimon’s answer as “the financial system is safer today, and you can’t say that Dodd-Frank has helped at all.”
Dimon repeated his admission that “Dodd-Frank and other things made it safer.”
He acknowledged that the “Volcker rule,” a proposed regulation that would sharply limit banks’ trading, “may very well have stopped parts” of Morgan’s losing bets. He conceded that regulators have made “improvements in companies, including JPMorgan.”
It wasn’t as if the banker suddenly loved the regulatory state; he said the Volcker rule is “unnecessary.” his trademark arrogance returned when confronted by the only tough questioner, Sen. Jeff Merkley, D-Ore. Dimon, speaking over Merkley, said the senator was “misinformed” and relying on “factually wrong” analysis.
But this time, Dimon had a more deserving target for his criticism than Democrats and regulations: a demand to “get our fiscal act in order” before the election and before automatic tax increases take effect next year. The Simpson-Bowles plan “is a road map which I like,” he said, and the important thing is “getting something like that done.”
If Dimon is the senators’ best friend, as their fawning suggests, perhaps they’ll take this advice seriously.
Dana Milbank’s email address is firstname.lastname@example.org.