With JPMorgan Chase CEO Jamie Dimon, you either love him or hate him – and whichever the two emotions one feels, one feels to the core of their capacity. Dimon is known for his aggressiveness, confrontational tendencies and his outspoken disgust over the new financial laws that keep him – and his fellow Wall Street banker counterparts – in check. Eh…we all live by rules and these heavy hitters aren’t exempt. So why is Warren Buffet singing the praises of a man even he has done a round or two with? This week, Warren Buffet said he believes Dimon would be the ideal replacement for exiting Treasurer Tim Geithner. Here’s why President Obama might disagree.
Initially, Dimon and Obama were like two peas in a pod. Many believe Dimon took a liking to Obama after he was elected because he was positioning himself to become a confidant while Obama mulled new financial regulations. Turns out, the Obama Administration didn’t need Dimon and in fact, one of the first issues tackled by President Obama during is first term was financial overhaul. Dimon wasted no time spewing his beliefs that more regulation was the last thing the nation’s banks needed. The vast majority of Americans, meanwhile, respectfully disagree. Those new laws have made for much better oversight in the financial and specifically, the credit card industry. Still, Dimon and others remain vehement in their efforts of finding a way around what they feel are intrusive laws.
Buffett, when explaining his reasons, had this to say,
f we did run into problems in markets, I think he would actually be the best person you could have in the job,
Buffett said in an interview with PBS interviewer Charlie Rose.
World leaders would have confidence in him.
It should be noted Dimon is not believed to currently be in the running for the Cabinet position; however, this isn’t the first time we’ve heard his name in those conversations.
The Hard Truth
Before anyone considers seriously Jamie Dimon for this role, there are a few truths and realities that seemed to have escaped the memories of some.
With his aggressive and confrontational nature, Dimon has locked horns with the likes of U.S. Fed Reserve Chairman Ben Bernanke and Bank of Canada Governor Mark Carney during an IMF meeting last year. So heated was that discussion that others had to step in to keep the two from passing blows. That’s what the White House needs, right?
When asked about the massive trading loss born in London that Dimon’s bank was responsible for triggering, which also totals $6.2 billion to date (with the numbers still increasing, by the way), Buffett said,
Obviously, you know, there was a failure of control. If you run an army, if you run a church, if you run a government, any large institution, people will go off the reservation sometimes.
It’s important to remember, too, that during those initial days and weeks after the writing was on the wall with the true economic state of the country, after Wall Street was bailed out so brilliantly with taxpayer dollars, a whopping $36 billion in bonuses were issued for Wall Street executives. Meanwhile, robo-signing foreclosures were happening, unemployment was racing higher with each passing day and Americans were facing a new reality of bankruptcy, homelessness and excessive credit card and banking fees.
Remember, too, that Wall Street is the single largest sector in the United States and despite those who believe manufacturing accounts for this sector, the fact is, our financial sector is far bigger than all others combined. And it is also the sector that led not only the U.S., but global economies, into what is now known as the worst economic crisis since the Great Depression.
Not at Dimon’s Feet
Of course, no one is saying Dimon is responsible for that catastrophe, but let’s face it, he is vehemently opposed to any kind of regulations or overhaul and once those new laws were put into place, he’s been the most vocal in terms of why this was the worst thing the Obama Administration has delivered to the American people – and this is the same administration that’s shoving Obamacare down our throats.
Dimon’s aggressive nature, on the other hand, could be beneficial especially on global level. It seems as though the U.S. has gained the reputation of being a pushover and even passive. (One word: Benghazi). Dimon could change that image, which is very much needed. The only problem is who would trust him? Who could really be able to trust a man to play a role in overseeing the laws he is opposes to the core of who he is?
As mentioned, it doesn’t appear Dimon is being seriously considered by President Obama at this time. Also, remember that Wall Street collectively supported a Romney presidency because Mitt Romney promised to overturn all of these laws that have meant lower banking and credit fee structures, the elimination of banks and credit card companies being able to change the rules that govern our credit card accounts and the elimination of the one federal agency that has done more in its first two years than many agencies have managed to accomplish over the past two decades.
From what we have been able to discern, it looks as though Geithner’s replacement could be one who’s already in the White House. Jack Lew is currently the White House Chief of Staff and is a former Office of Management and Budget director. Geithner is said to have agreed to lead negotiations on the fiscal cliff and once that’s been settled, he will make his departure.
What do you think? Should Dimon stay where he is, at the helm of the nation’s largest bank or do you think he’d provide the right balance to the Obama Administration? Dimon is superb as a bank CEO and remember, it’s his bank that brings us some of the most impressive credit card offers we’ve seen. But is that enough to justify a move into financial politics?