JPMorgan's reckless, $2 billion fiasco appears to have a silver lining of sorts: the bank's bad bets help demonstrate the need for safeguards in the system. In his new column, Paul Krugman thanks JPMorgan Chase CEO Jamie Dimon for offering "an object demonstration of why Wall Street does, in fact, need to be regulated."
And yet, somehow, some still don't see it that way. On NBC's "Meet the Press" yesterday, Republican National Committee Chairman Reince Preibus, common sense be damned, argued that the JPMorgan mess changes nothing.
Host David Gregory asked a straightforward question: "In light of the losses on Wall Street this week, you think we need less financial regulation rather than more?" In Preibus' mind, it's not even a close call: "I think we need less." The RNC chief added that Democrats have "made things worse" by approving new safeguards and adding new layers of accountability to the financial system.
It reminded me of an Upton Sinclair line: "It is difficult to get a man to understand something, when his salary depends upon his not understanding it."
This really isn't that complicated. In 2008, Wall Street, left to its own devises, nearly collapsed the global financial system. Four years later, institutions like JPMorgan are still taking enormous risks in reckless schemes. It's hard to even conceive of a straight-face argument against sensible regulations in light of recent developments, but the chairman of the Republican National Committee was on national television anyway, arguing that policymakers should be doing less.
Mitt Romney, the Republicans' choice for president, believes the same thing, calling for eliminating Wall Street safeguards and replacing them with nothing.
As we discussed on Friday, this seems politically suicidal – who wants to vote for a presidential candidate running on a "leave Wall Street alone" platform? -- but the GOP believes the public hates government regulation, at least as much as voters hate the Wall Street elite, so the party has no qualms about its position, regardless of the JPMorgan fiasco.