“Soft despotism is a term coined by Alexis de Tocqueville describing the state into which a country overrun by "a network of small complicated rules" might degrade. Soft despotism is different from despotism (also called 'hard despotism') in the sense that it is not obvious to the people."

Saturday, April 10, 2010

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.


  1. I wish I could make a cogent comment on this post, but I, honestly, am lost in the game.

    Somehow, we've let the Big Banks get so far out of control (or, in control) that I don't know if it will ever be possible to bring them back to earth.

    There are, literally, as far as I can tell, Hundreds of those people that should be going to jail. We have the ridiculous circumstance of "Corporations" pleading guilty to "Criminal Fraud," and the people running the corporations, and perpetrating the fraud, getting on their private jets, multimillion dollar bonuses in hand, and flying off to their 3rd, or "4th," "197 kazillianth" home in Bermuda, or wherethefuckever. It's gotten completely, batshit, insane.

  2. Good Cop?

    Yea, Blankfein's a peach.

    In fact he's "doing god's work."


  3. It seems that the tail is wagging the dog, has been for quite a while.

    Since the abolition of the Silver Certificate.

    The member banks of the Federal Reserve control the US Government, not the other way around.

  4. Djibouti: A U.S. warship captured six suspected pirates Saturday after a battle off the Horn of Africa. The Navy said the suspected pirates began shooting at the amphibious dock landing ship USS Ashland. It returned fire and destroyed the suspects' skiff.

    Mexico: An attacker threw an explosive device over the wall around the U.S. Consulate in the border city of Nuevo Laredo, breaking windows and startling employees inside but causing no injuries, the U.S. Embassy said Saturday.

    Muskogee, Okla.: A shooting inside a crowded mall left one person dead and several injured Saturday in what witnesses described as a gunfight. Police said it was unclear whether the person killed was among several involved in the shooting or a bystander.

    Times wires