Concluding Thoughts Addressed to the Media and the Public
The question I end with for Larcker, Stewart, Sorkin, and White is what would it take? How many frauds does JPM get? When I note that JPM has been engaged in 15 separate violations of the law according to investigators, I do not mean that they have committed 15 felonies. Each of the 15 violations is very large and about half of them are among the largest fraud schemes in history. We are discussing a bank whose leaders have created the perverse incentives and corrupt tone at the top that have produced hundreds of thousands of felonies by JPM's officers and employees. Tens of trillions of dollars in transactions were affected by their frauds.
I can understand why you have to carefully strip these realities from your reportage in order to serve as Dimon's sycophants, but I ask you to stop. When you tell your readers that Dimon is the best bank CEO in the world how do you overcome your gag reflex? You cannot continue to make the coverage of Dimon and JPM an ethics-free and fraud-free zon. You do too much damage to the truth, the reputation of your employers, and our Nation. We cannot afford your continued race to the bottom. You need to commit to a competition in integrity.
Common sense would be an excellent starting point. Larcker's carpenter father, my (deceased) carpenter father-in-law, my (deceased) weekend-carpenter father, and a carpenter who emailed me a message while I was writing this blog would/were all be outraged by Dimon's raise. The evidence from the crisis abounds that orthodox economists' dogmas are the problem. Michael Jensen, the intellectual godfather of modern executive compensation bemoans the catastrophic unintended consequences of his actions. The perverse incentives that led so many economists to ignore common sense and common decency and to pander to the plutocrats are obvious.
One of the first things I learned in dealing with Congress during the savings and loan debacle was that my unsophisticated relatives were spot on about the reality of Congress and lobbyists and that my "sophisticated" understanding of lobbyist and congressional behavior (based on "incentives" and "concern for reputation") that I learned from some of the world's top political scientists and economists was hopelessly naïve. The carpenters have proven vastly more accurate than the theoclassical and even neoclassical economists. If the idea of having to bribe a billionaire CEO with tens of millions of dollars annually in order to induce him to act as if he were moral and not to loot "his" bank sounds like an insane way to run a financial system to you -- you have more common sense than any 3,000 theoclassical economists combined.
Jesus was a carpenter. If Jesus were let loose in JPM for thirty seconds does anyone doubt what he would do? Writing articles in which you remove fraud and ethics from an issue that should be almost entirely about fraud and ethics is an unethical journalistic practice committed by those who benefit from pandering to plutocrats.
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