Jaime Dimon in Sheep's Clothing, Again
October 25, 2012
Wall Street is using the "bipartisan" label again to hide and push its agenda.
The so-called Bipartisan Policy Center ("BPC") launched a Financial Regulatory Reform Initiative last week. It claims to be not just bipartisan, but also independent and open minded to a range of views.
Yet, as is too often the case, peel away the label and the "dark side of bipartisanship" is quickly revealed, as former IMF Chief Economist and current MIT professor Simon Johnson lays out in a his New York Times column with that title:
"In Washington today, 'bipartisan' is a loaded term. The traditional usage of bipartisan refers to an agreement across the usual political divide — sometimes a good idea and in many cases the only way to get things done. But a darker meaning applies all too frequently — to a group in which the members, irrespective of party affiliation, are very close to special interests and work to advance an agenda that helps a few powerful people while hurting the rest of us."
Simon, is, if anything, too polite about the Initiative and task force membership, which reads like a who's who of industry allies and hired guns or, at least, many whose wealth and status are unpinned by financial industry business interests and money. I hope I'm wrong, but I doubt very much that anyone will be saying "can you believe that they have endorsed [fill in the blank]."
The likelihood of surprises here is equal to the likelihood of Jamie Dimon calling for a breakup of the too big to fail banks like his own JP Morgan Chase: not happening in our lifetime. (For more on Jamie, read this and this.)
That doesn't make those industry allies and hired guns bad or venal people, but it does mean on almost every key issue their position won't likely result from a fair, balanced, independent and open-minded analysis of the facts and context. And, after all, that is really the point of the BPC's "initiative": put out reports that claim to be independent and credible and, most importantly, do not appear to be from the financial industry. But, those reports will nevertheless just happen to consistently support the industry's views and positions, which the industry will then use to weaken financial reform and/or bend it industry's way.
"Look, don't take our self-interested and discredited word for it. Here's this terrific, independent and -- don't miss this -- bipartisan report agreeing with what we are saying. This should be weighted very heavily." This is the financial industry's MO and daily pitch to politicians, regulators and the media in pushing its agenda, which -- don't be misled -- is profit protection, not financial reform, not protecting the public, not protecting taxpayers or any of the other soothing things they sometimes claim to support. (Tellingly, one of the task force members is a partner at the consulting group of Oliver Wyman, which produced just such a report and which the industry is using in its relentless attack on the Volcker Rule. While the industry claims the Oliver Wyman report is independent validation of its claims, the report has been widely discredited by genuinely independent groups.)
Hiding such almost certainly one-sided, pro-industry outcomes behind an organization and "initiative" is a favorite tactic of the influence industry and a time honored tradition in Washington DC, but that doesn't make it right. If honestly in labeling was required this "initiative" and so many of the other front groups, "think" tanks, policy centers, purchased allies and academics and too many others to list would go out of business. Their reason for existing is to launder the financial industry's self-interest behind a veil of credibility, independence and, yes, bipartisanship. This is all the more important now for a discredited industry. It desperately needs outside validators to push its agenda and message. Unfortunately, there is no shortage of willing hired guns and organizations willing to provide them cover.
Could this be too harsh in this particular instance? After all, they just launched. I don’t think so. First, as Simon points out, the way they framed the initial key topic is decidedly pro-industry and anti-reform, in addition to being flat wrong. Second, if this was a seriously independent and open minded initiative, you’d think it would have talked to those active in this area to learn about what is being done by others and what would make sense for launching an initiative. To our knowledge, that wasn’t done. Third, and most telling, where are the Shelia Bairs or Neil Barofskys or the others who would provide some balance to the industry representatives on the task force? The fact they are not there speaks loudly about what is going on here.
Importantly, Simon is right to point out that there are 3 academics and 1 other member of the task force without obvious ties to the industry. However, even if they are independent and open-minded (and we have no reason to think otherwise), they are not only outnumbered (10 vs. 4), but totally outgunned. Remember, most of the industry allies have very large organizations (often law or consulting firms) and massive resources behind them. Backing them up are the unlimited resources of the financial industry itself. An academic or someone else here or there is no match for that overwhelming firepower.
Sadly, this type of covert advocacy is partly what got us the deregulation and non-regulation that greased the skids for Wall Streets reckless investment and trading that caused the financial collapse and ongoing economic crisis. That’s also what partly defeated a really strong and direct financial reform law and what is fighting mightily every day to kill, gut or weaken the regulations that are supposed to implement the law that was passed.
Unleashing Wall Street again will only make the next crash and crisis inevitable. Unfortunately, it'll likely be much worse next time (and this time was pretty bad, even though no one wants to talk about it - read more here.)