Good Cop, Bad Cop

Jamie Dimon: The Good Cop in a Bad Mood

By Michael Corkery WSJ

JP Morgan CEO James Dimon hates being compared with cross-town rival Goldman Sachs CEO Lloyd Blankfein. Well, when it comes to the two men’s political strategies, there is no comparison.

Lately, Blankfein has been playing Wall Street’s good cop, while Dimon is the bad cop. (Or at least Dimon is a good cop in a bad mood.)

Dimon, one of Washington’s biggest boosters during the financial crisis, has grown increasingly frustrated with Washington, according to this Page One Wall Street Journal article.

Take lobbying. JP Morgan spent $6.2 million last year on lobbying Washington lawmakers in an effort to fend off such proposed measures as the consumer protection agency.

Goldman spent less than half that amount, or $2.8 million, on lobbying in 2009, according to federal lobbying records.

Of course, one could argue that Goldman has less to lose from the current financial overhaul proposal grinding its way through Washington. The so-called Volcker Rule, which would have restricted proprietary trading at bank holding companies, is all but dead.

In addition, Goldman lacks a consumer lending business and so avoids the restrictions that JP Morgan finds so onerous about the consumer protection agency.

Then, there is the two CEOs’ general demeanor. Dimon, as reported in today’s Journal article, is unhappy that large banks like his have been “demonized” in the “current political environment.”

He’s communicated his displeasure privately to the Obama administration and publicly in a 36-page shareholder letter, released last week.

At the same time, Dimon voices his support for a range of overhual measure such as ending “too big to fail.’’ But he stresses that his support for the administration financial overhaul proposal is not unconditional.

“While we support the general principles behind enhanced regulation of derivatives, securitizations and enhanced consumer protections, we do not support each and every part of what is being recommended. The devil is in the details, and it is critical that the reforms actually provide the important safeguards without unnecessarily disrupting the health of the overall financial system.”

Blankfein takes a more succinct tone in his eight page shareholder letter, stating simply:

“Goldman Sachs has pledged to remain a constructive voice and participant in the process of reform, and has been forthcoming in recognizing lessons learned and mistakes made,” Blankfein writes. Specifically, he supports higher capital levels and clearinghouses for standardized derivatives.

Washington, it seems, has a new BFF in Blankfein.