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Thursday, December 08, 2011

Jamie Dimon actually thinks he is successful


James Dimon, CEO of JP Morgan Chase, said in a speech to stockholders yesterday, "Acting like everyone who's been successful is badand that everyone who is rich is bad,” he said. “I just don't get it."  

It is hard to know what to respond to first: the fact that he is clueless, or the fact that he thinks he is successful.

Rich, yes he is rich. But rich is not the same as successful. Often, rich is the opposite of successful. Rich is the symptom of a system that has allocated its resources illogically, responding to the kind of power differentials that are at the heart of rentseeking and monopoly. On Dimon's scale, Idi Amin was successful. Even in the narrow field of bank management, Dimon has been anything but successful. As the head of JP Morgan Chase in 2008, Dimon's leadership essentially led the bank to the brink of bankruptcy, and it would have gone over if  if the Fed hadn't thoughtfully chosen to 'loan' it emergency money to the amount of 391 billion dollars - at 1 percent interest or below. Here's a nugget from Business Week:

"JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon told shareholders in March 2010 that his bank used the Fed's Term Auction Facility “at the request of the Federal Reserve to help motivate others to use the system.” He didn't say that the New York-based bank's total TAF borrowings were almost twice its cash holdings or that its peak borrowing of $48 billion came more than a year after the program's creation." 

In other words, if we judge success by an ability to operate as an insider and a parasite on a national scale, he's successful. If we judge success as, well, running a bank that contributes to the wellbeing of society and the creation of wealth, he is the very opposite of successful. He is rust. He is mold. He is the element that creeps and crawls, bores and bites, and turns wealth into dust. As Jeremiah, who had an eye for the Dimon type, put it:  "As the partridge sitteth on eggs, and hatcheth them not; so he that getteth riches, and not by right, shall leave them in the midst of his days, and at his end shall be a fool."

Anyway, let's look into the bones of his comments. He then announced that, according to his calculations – made no doubt with his fingers crossed behind his back -  he is paying 50 percent of his income in income taxes, state and federal. But one has only to look at his Business week profile – which is different from his Forbes profile, such are the 75 ways to see a CEO’s compensation package -- to see that his real income is in stock options. According to Forbes, he has a cool 58,968,234.00 that are currently exercisable. According to Businessweek, he has 31,089,284. The Forbes profile doesn’t include the happy little bonus he got of 5 million dollars, but both sources agree he did make a million dollars in salary. What does this mean? Well, remember that it means, firstly, a tax writeoff for JP Morgan – sweetly enough, Congress has decided that companies can write off the expense of stock options they grant to their execs against their corporate taxes. How convenient! And then it means that when Dimon wants to exercise his options, and he does it after waiting the approved period, 2 years,  he will pay an astonishingly low 15 percent on the amount.  But will he really pay that amount? Or will he exercise his options in such a way that they are run through the increasingly popular tax haven system, so as to avoid hits to the millions and millions for running a bank that exists simply because Lord Bernanke the Lesser looked upon it and decided lo, it was good - and created some money ex nihilo and loaned that money to it.
So mark it down: Dimon, after being bailed out by the government,  is complaining that 3 million dollars (an improbable sum, but lets pretend that his casual remarks correspond to his  accountant’s results) is going to be taken from his six million dollars, and at some date the government will even take 15 percent from his 20 million in stock options, leaving the poor man with a mere 21 million + dollars for 2011. 

One can not call this phenomenon successful, save in the way that freaks and frauds that beguile a gullible audience are successful. Mark the man for what he is: like a partridge that sits on eggs that will not hatch, he is a fool, a deadbeat, a loser with a bonus, another plutocratic mediocrity.

Here's another observation from Jeremiah about the end of systems in which creatures like Dimon experience success:

Because my people hath forgotten me, they have burned incense to vanity, and they have caused them to stumble in their ways from the ancient paths, to walk in paths, in a way not cast up;

16 To make their land desolate, and a perpetual hissing; every one that passeth thereby shall be astonished, and wag his head.

17 I will scatter them as with an east wind before the enemy; I will shew them the back, and not the face, in the day of their calamity.



  

1 comment:

Brian M said...

Damn, roger. Remind me again why you, not David Brooks or George Effing Will, are not writing for the New York Times?