The Senate hearing last week featuring J.P. Morgan Chase CEO Jamie Dimon "would have been a total fiasco," says Rolling Stone reporter Matt Taibii, except for sharp questioning by Oregon Senator Jeff Merkley about banks "operating like a hedge fund" with the backing of "government-insured deposits."
Tuning in to congressional hearings, even on important topics, isn't a regular American routine. But thanks to colorful political reporting from an unsuspected source, we get an inside, minute-by-minute look at how many Senate Banking Committee members treated the Dimon hearing like a celebrity book-signing.
"Most of the Senators not only supplicated before the blow-dried banker like love-struck schoolgirls or hotel bell-hops," Taibbi writes, "they also almost all revealed themselves to be total ignoramuses with no grasp of the material they were supposed to be investigating." That isn't the usual hearing summary you get on network TV.
Tabii wasn't any kinder to Dimon, whose performance he described as "oddly nervous, grating and maladroit throughout." "He didn't look like an experienced public speaker and one of the most powerful men in the world," Tabii continued, "but more like a traveling salesman stammering and rambling in an attempt to talk a night judge out of a pandering bust."
While castigating the majority of committee members for their softball questioning, Taibii praised Merkley's more biting scrutiny, which included a testy exchange with Dimon about whether J.P. Morgan Chase benefitted from federal government financial bailouts.
According to Taibii, Dimon had been allowed, without challenge, at the hearing to rail against the Volcker Rule, which Merkley authored to require banks to choose between being a bank or a hedge fund.
"But the basic concept of the Volcker Rule is that banks are in the lending business, not the hedge fund business. Would you agree?” Merkley asked Dimon, who responded, "We're not in the hedge fund business."
Merkley pushed back, noting Chase's Chief Investment Office, at Dimon's instruction, was told to "accumulate high-yield assets such as risky credit derivatives instead of safer, government-backed securities." "That sounds like operating a hedge fund," Merkley added, "and doing so at your direction, with government-insured deposits." Dimon protested, saying the investment office wasn't a risky fund, even though he admitted it had lost a huge pile of cash overnight.
What most disturbed Tabii was the tone of the hearing. "The senators [except Merkley] treated Dimon like a visiting dignitary and a teacher of great wisdom," he wrote, "not like a man who, after growing very rich off public money, put the whole economy at risk by engaging in wildly unsafe financial sex on a grand scale."
"You don't get to snort and roll your eyes in front of a judge, and you shouldn't get to do that in the Senate, especially when you're there because you violated the public trust," Tabii said. "Somebody has to remind these legislators who they work for, and it's not Jamie Dimon." From Tabii's point of view, nobody will have to remind Merkley.