In a news article last week, JP Morgan Chase was reported to have hit another low that scares me, because they own many of our retirement accounts. JP Morgan Chase just paid a huge fine to the feds and admitted that they sold off their investments with Bernie Madoff when they suspected he had a Ponzi scheme going, but they continued to buy these investments for their customers. No jail time was given.
If companies are individuals and can give campaign contributions, then a person or persons at the bank should be held responsible for this and serve jail time, don’t you think? Regardless, I’m glad to see the feds step in and get the billion dollar fine and are going to get it to the people who lost all their money buying these investments. The problem is, what will the bank do to help absorb the cost of the fine? Raise our fees, adjust salaries to the detriment of the workers.
Jail is a better deterrent of corporate wrongdoing.
I have no problem with business, in fact, I think trade and business is what has got us here today, the best time for the average human being around the world, in the history of the world. What I have a problem with is a business that is shielded from responsibility or government leaders who accept their money in exchange for favors. Why not let us change our leadership? Maybe vote for someone without the word “Democrat” or “Republican” after their name?
Why protest when we can simply vote?
Things fade into the background if they’re no immediate danger to us. The aging nuclear power plant that provides power but is not in compliance with safety regulations and sits near an earthquake fault line (like the Indian Point nuclear reactor outside of NYC). Or the cost of war in lives and money that doesn’t effect you… yet. Or the bank that continues to go into debt making risky bets because the government bailed them out by also going into debt. And without making cuts in government services…yet.
Last week the CEO of JP Morgan Chase, Jamie Dimon, made an interesting announcment. The company lost over $2 billion dollars continuing their risky betting. Now, this is a fraction of their hundreds of billions of dollars in income. (Income, not profit: They have 3 times as much debt as assets.) So is Dimon preparing us for worse to come? Maybe. Or is he trying to establish an environment of acceptance of risky betting? Dimon said the investments were a “terrible, egregious mistake” but “we maintain our fortress balance sheet and capital strength to withstand setbacks like this.” Was this a PR move to instill trust in a market that is losing it?
In 1912, JP Morgan, the founder of this company, was speaking in a testimony with Congress. He was asked whether banking debt is based on money or property.
He answered that it was about character, “before money or anything else. Money cannot buy it…Because a man I do not trust could not get money from me on all the bonds in Christendom.”
Do you trust a market where you buy things like a television? How about a market that buys…money? There’s a big difference that needs to be appreciated. One is in the business of creating cheap goods and services for money. The other is in the business of creating money. One is less government driven and difficult to corrupt, while the other is more government driven and much easier to corrupt. What they have in common is that the consumer decides whether to buy their goods or services.
And that consumer is you and me.