I don't know which producer at CNBC had the genius idea of asking Alex Pareene on to discuss Jamie Dimon with Dimon's biggest cheerleaders, but the result was truly great television. What's more, as Kevin Roose says, it illustrates "the divide between the finance media bubble and the normals" in an uncommonly stark and compelling manner.
The whole segment is well worth watching, but the tone is perfectly set at the very beginning:
Maria Bartiromo: Alex, to you first. Legal problems aside, JP Morgan (NYSE:JPM) remains one of the best, if not the best performing major bank in the world today. You believe the leader of that bank should step down?
Alex Pareene: I think that any time you're looking at the greatest fine in the history of Wall Street regulation, it's really worth asking should this guy stay in his job. In any other industry - I can't think of another industry. If you managed a restaurant, and it got the biggest health department fine in the history of restaurants, no one would say "Yeah, but the restaurant's making a lot of money. There's only a little bit of poison in the food."
This is a very strong point by Pareene - and it's a point which was well taken by Barclays (NYSE:BCS). When the UK bank was fined $450 million last year for its role in the Libor scandal, its CEO duly resigned. After all, a $450 million fine is prima facie evidence that the CEO really isn't in control of his bank.
But $450 million is a rounding error with respect to the kind of fines that Dimon is now talking about paying - $4 billion, $11 billion, $20 billion, who knows where this will stop. Tim Fernholz has a good roundup of all the various things that JP Morgan is in trouble for; Libor manipulation is at #5 on his list of seven outstanding investigations - on top of another four settled investigations. If Libor manipulation alone was enough to mean the end of Bob Diamond, it's hard to see how Jamie Dimon should be able to survive this tsunami of litigation.
Unless, it seems, you work for CNBC. In which case you just ignore Pareene's question, and get straight onto the important stuff:
Duff McDonald: It's preposterous. The stock's touching a ten-year high. It's a cash-generating machine.
Maria Bartiromo: Should we talk about the financial strength of JP Morgan? The company continues to churn out tens of billions of dollars in earnings and hundreds of billions of dollars in revenue. How do you criticize that?
This view - that profits cleanse all sins, and that so long as you're making money, nothing else matters - is not normally expressed quite as explicitly as it was here. After all, there are licit and illicit ways of making money, and surely if your profits fall into the latter category, you should not be able to remain comfortably ensconced as a celebrated captain of industry. Besides, banks shouldn't be obscenely profitable: they're intermediaries, and in an efficient economy their profits should be quite easily competed away. When bank profits are high, that's a sign that the bank in question is extracting rents from the economy, rather than helping it to grow.
The rest of the interview is a glorious exercise in watching CNBC anchors simply implode in disbelief when faced with the idea that JP Morgan in general, and Jamie Dimon in particular, might be anything other than a glorious icon of capitalist success. In the world of CNBC, the stock chart tells you everything you need to know, while the New York Times is a highly untrustworthy organ of dissent and disinformation.
Eventually, Bartiromo asks Pareene, with a straight face, who would be the best CEO of JP Morgan "from a shareholder perspective". Since, clearly, the shareholder perspective is the only one that matters. Except, of course, it isn't. JP Morgan's balance sheet shows assets of $2.4 trillion and liabilities of $2.2 trillion, leaving $200 billion in total stockholder equity. Sure, the shareholders matter - but even in terms of the balance sheet they only matter about 8.6%. And in terms of the systemic importance of JP Morgan to the nation as a whole, its shareholders matter even less. The country was seriously damaged by JP Morgan's lies and misrepresentations about its mortgages - much more than it would be damaged if the share price went down instead of up. And the public has every reason to want the individuals running JP Morgan to be held accountable when it gets into serious regulatory trouble over and over again.
Right now, the banks aren't lending money to homeowners - the government remains the only game in town, when it comes to mortgages, and that isn't healthy at all. JP Morgan's shareholders might be happy with Jamie Dimon, but that doesn't mean the rest of us should be. Jesse Eisinger wants the banks executives to face personal charges; whether that happens or not, it still behooves them to take responsibility for the long series of egregious errors that JP Morgan has made. Shareholders might not want to see Dimon go. But if JP Morgan does end up paying an 11-digit fine, then resignation would surely be the honorable thing to do.