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A charismatic rebel leader has emerged in recent weeks to challenge the way things work on Wall Street – and, boy, does he come from an unexpected place.
You would expect to find such a firebrand these days in Manhattan’s Zuccotti Park, where young people have assembled to “occupy Wall Street” and fight against corporate greed. However, this affair is turning into a bit of a snooze for anyone who remembers when political protests in this town featured the rhetoric of a Malcolm X or the street theatre of an Abbie Hoffman.
I suspect the problem with the downtown demonstration has something to do with the tendencies of the Facebook generation. Roused by appeals on social media, idealistic Americans have taken to the streets so they can essentially do more social networking. Twice a day, the protesters schedule “general assemblies” in the hope that sustained dialogue will lead to a plan of action. To which, I say, like, you know, whatever.
If you are looking for a real mad-as-hell-and-not-taking-it-anymore thorn in the side of global banking supremos, you have to go several miles uptown to 270 Park Avenue. There sits the reigning bad boy of the New York banking world, Jamie Dimon, chairman and chief executive of JPMorgan Chase, the sprawling financial group with historic links to the House of Morgan, the Rockefeller family and other not-so-subversive threads of our social fabric.
Mr Dimon’s latest eruption came last week when he tore into the governor of the Bank of Canada at a closed-door meeting that bankers and financial regulators held in Washington to discuss new capital rules for lenders. Mr Dimon hit this Canadian, Mark Carney, with such a rhetorical wallop that Lloyd Blankfein, chairman and chief executive of Goldman Sachs, later sent a conciliatory email to smooth things over, according to people quoted in this newspaper.
The steel-cage match in Washington came only days after Mr Dimon told the FT that capital rules being considered by the Basel group of international bank regulators were “anti-American”. One of the things Mr Dimon apparently made clear to Mr Carney was that he would continue to use the expression “anti-American” in discussing the subject.
Nor is Mr Carney the only regulator who has found himself on the fighting side of Mr Dimon. In June, Mr Dimon “instantly became Wall Street’s hero”, according to the Business Insider website, when he confronted Ben Bernanke at a televised debate that followed a speech by the Fed chairman.
“I have this great fear that someone is going to write a book in 10 or 20 years and the book is going to talk about all the things that we did in the middle of a crisis that actually slowed down recovery,” Mr Dimon said. “I don’t personally buy the argument that because it was a financial crisis it has to take a long time coming out.”
Mr Dimon’s superiority as a rebel can be attributed to several factors. Unlike the Zuccotti Park crowd, he bases his activism on analysis (rather than the other way around). Mr Dimon’s language can be strong, but his logic is straightforward. His main concern is mathematical – how much capital big banks like his should hold as protection against possible business reversals.
This capital-cushion question demands an answer. Mr Dimon is basically saying he can get by with
a futon on the floor. Regulators would prefer he throw a few extra pillows around the room, too. If the protesters in the park were up to speed on capital adequacy matters, they might suggest the way to keep bankers from hurting themselves and others is by putting them in padded cells. But I wouldn’t hold your breath.
Mr Dimon has also demonstrated his skill as a rhetorician. One of his worries about the potential new rules is how they treat certain products and practices that are common in the US but not elsewhere. These are highly technical matters. But by calling the proposed capital rules for made-in-the-USA thingamajigs “anti-American”, he has made obscure balance-sheet entries, like mortgage-servicing rights, a matter of national pride.
And when one of the biggest bankers in town is coming up with better populist slogans than the protesters in the park, you also know how this kind of thing is going to turn out. Call me old-fashioned, call me cynical, but my guess is that the ruling class survives.