The Senate may have brought JP Morgan CEO Jamie Dimon in for a hearing on the firm's $2 billion loss last week, but there was very little sizzle in his grilling. Instead of the kowtowing that took place, Roosevelt Institute Senior Fellow Rob Johnson told the Real News Network what questions he would have asked had he been in the room:
Question number one: "Why, when he claims what he’s doing is hedging other risk, he actually lost money on the hedge?" And as a follow up, to bring home the larger point: "Isn’t the Volcker rule, which separates all of this proprietary trading from other activities that society guarantees... absolutely necessary?" As Rob explains, this loss may not have been a significant portion of the bank's overall portfolio, but who's to say that the next loss isn't worse, or that a bank loses all of its capital the way Lehman did?
Question number two: "What was productive for society in the credit allocation process in that particular action?... Why does any of this activity have anything to do with making the economy function better, restoring the value or the stability in the housing market, or any of those types of real functions of financial mediation?" It can be easy to lose site of this point in all the talk of "job creators" and "doing God's work," but finance does exist for a purpose, in theory. So beyond maximizing stockholder's stock, what purpose was there for the rest of us?
And one final question: "I would be tempted to ask him why he spent so much money pulling together the entire lobbying force that used to work for Freddie Mac and Fannie Mae," Rob says. Such actions don't belie an interest in transparency, but quite the opposite: an effort to "thwart the public interest" and bury the important truths behind the bank's actions. So what are they hiding over there? If it's up to the Senate, we may never find out.