After JPMorgan Chase's admittedly "stupid" trading bets that lost the company billions of dollars in just a few weeks, Congress did what it's supposed to do: it announced hearings that would allow lawmakers to get to the bottom of things.
Three weeks ago, we saw the first hearing, in which Senate Banking Committee Republicans, led by Richard Shelby (R) of Alabama, upbraided the Commodity Futures Trading Commission for not doing more to prevent this. Regulators explained that they still have limited powers in this area, but for GOP senators, this not only didn't matter, it was inexplicably used as a rationale to give agencies less authority.
If lawmakers gave regulators a hard time about JPMorgan's fiasco, surely they'd be apoplectic when JP Morgan Chase CEO Jamie Dimon appeared before the same committee yesterday, right? Well, not exactly. Consider this clip from last night's Ed Show.
Republicans on the panel didn't demand answers or propose solutions to prevent future disasters; they praised Dimon and sought his advice.
The moral of the story? Wall Street's bravado is apparently back -- if it ever really went away at all.
Jon Chait had a good piece on this yesterday.
The financial crisis ushered in a kind of transition period. Americans were in a purple-faced rage at an industry they more or less correctly perceive as having first destroyed the economy, then received a generous bailout and resumed making obscene money while the rest of the country suffered. The rage was strong enough to make politicians of all stripes leery of appearing close to the industry. That hesitation is what allowed liberals to pass the Dodd-Frank law -- just enough Republicans and moderate Democrats were frightened to be seen as carrying Wall Street water to force them to support a potentially serious reform.
Those days have clearly passed. Wall Street is still unpopular with the American mainstream, but GOP policymakers don't seem to care -- Republicans not only fawned over Dimon yesterday, Mitt Romney is assuring voters he'll eliminate pesky financial-industry safeguards if elected president, and replace them with nothing.
And why do Republicans do this? In part so they can benefit from Wall Street's generous campaign contributions, and in part because they plan to rebut any Democratic pushback by saying Dems are "anti-business" for criticizing the industry's recklessness.
It's quite a racket, isn't it?
The New York TImes editorial board added this morning, "A month after the trading losses were first revealed, Mr. Dimon has yet to offer a thorough explanation for what happened." That's just how GOP policymakers like it.