Following up on the CNBC Pareene/Bartiromo slapdown that DougJ posted earlier, an analysis by finance guy Felix Salmon at that socialistic outlet Reuters:
… 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…
piratedan
does this mean we can now safely equate CNBC “talent” with lawyers and used car salesmen as inhabitants of the sixth circle of hell?
I would love it if those CNBC hosts went on the road and took their business expertise out on the road and showed the locals how to make money in this economy, maybe someplace like Tec Nos Pas, AZ or Rigby, Idaho or even Oceana, West Virginia… lets see you put that business acumen into play in REAL AMERICA and then lets see you thrive!
NotMax
“Capital as such is not evil; it is its wrong use that is evil. Capital in some form or other will always be needed.”
– Mohandas K. Gandhi
“We estimate the wisdom of nations by seeing what they did with their surplus capital.”
– Ralph Waldo Emerson
LosGatosCA
Normally, I don’t use cuss words about a woman but Maria Bartiromo is simply a jackass in a dress.
The prophet Nostradumbass
CNBC needs to be nuked from orbit.
srv
Banks should be small enough to strangle in a bathtub.
With room to spare for these quacks.
Higgs Boson's Mate
Bartiromo’s belief that “profit excuses anything” is fine with me. That means that she’d have no problem with a reality show where each week another pack of empty headed journos are burned at the stake.
Villago Delenda Est
I’m sure Bartiromo would have no problem if her pimp routinely confiscated all her earnings in the name of “profit”, if heroin dealers had her children as clients, and if some bank foreclosed on her home because it was the right time in the cycle to do so.
Bill E Pilgrim
Faced with the facts that institutions like JPM pushed the entire US economy into disaster by precisely the kinds of behavior that they just received the biggest fine in history for, Bartiromo’s exasperated response about how much money they make was one of the best “but… these go to eleven!” responses I’ve ever seen in real life. Cluelessness and arrogance in equal parts.
Villago Delenda Est
In other words, they’re parasites.
Ben Cisco
@Bill E Pilgrim:
Sadly, both traits were requirements for the job in the first place.
geg6
LC Greenwood is dead and Jamie Dimon still lives and thrives. And people wonder why I’m an atheist.
cvstoner
Unless the company is run by those who are themselves large shareholders, in which case the shareholders matter 100%.
gelfling545
Some 20 years ago in a faculty room conversation I expressed the idea that drug dealers are the truest of conservatives. They just want to make basketsful of money & have the government leave them alone. It got a good laugh although was mostly serious in my opinion. Now, it appears, they’ve become the role models for our banking industry. I expect to hear that bankers are gunning down rival bankers at any time now.
BobS
This was the first I’ve seen of the CNBC segment. After a long time reading the excellent Alex Pareene, I thought he was disappointingly flat-footed when he was challenged to cite examples of JP Morgan corruption. The link Felix Salmon provides to the Tim Fernholz list of outstanding and settled investigations of the organized crime syndicate masquerading as a bank are all things that should have rolled off Pareene’s tongue when he was challenged.
NonyNony
@gelfling545:
Oh no. You’ve got it quite backwards. Organized crime has always looked enviously at the banking industry and what they can get away with legally. The banks are big enough that they don’t need to bottom feed like the criminals do – they can run cons and shark loans in ways that even the biggest syndicates can only dream about. And plus they don’t need to hire enforcers to do their dirty work – they have cops who will do it for them!
schrodinger's cat
The ethos that profit trumps everything, and is the greatest good, is the result of the neoliberal version of economics, for which we can thank Milton Friedman and his Chicago boys!
My review of Inside Job, Charles Ferguson’s documentary about the Financial Crisis, with a special focus on the nexus between the banking sector and academia.
MattF
Wall Street is down a percent in early trading. Are we having a bad day yet?
negative 1
@cvstoner: Not that I disagree with the tone of the article but that is a disingenuous argument for Felix to make, and I bet that he knows it. Shareholders own the company, so under a capitalist scenario, they are all who matter. Debtholders are merely repaid according to arrangement. Otherwise, your mortgage company would have the largest say in deciding your decorating and landscaping and your auto finance company should be able to tell you where to drive and how to do it.
The more interesting part of this conversation is whether or not private ownership by outside parties, hence capitalism and Wall St. in general, is a good arrangement at all, because it seems that Felix is saying that it is not. I’m all for more people agreeing with me, certainly, and I wonder how many people would agree with Felix that would disagree when he mentioned one of the basic tenets of Marx (capital shouldn’t own companies).
Chris
@NonyNony:
This. Wall Street Bankers and lawyers are what Mafia dons want to be when they grow up.
Well. Don’t forget, in some circumstances, the rich and powerful have also been known to use the mob itself as their enforcers.
Ted & Hellen
When are you Bots going to accept that the Obama Administration agrees with the CNBC anchors? They’ve had five freaking years to do something to indicate otherwise…