Quite honestly, I’m not sure what to make about rumors that have surfaced in recent weeks about the possibility of JP Morgan’s CEO Jamie Dimon as a replacement for Tim Geithner as Treasury Secretary. It is no secret that Geithner does not enjoy the support of a growing plurality of Congressional representatives, and was asked by a representatives at a recent Joint Economic Committee hearing if he would consider stepping down as Treasury Secretary. The beef with Geithner in many quarters – a sentiment I happen to share – is that he, in the midst of a need for stronger regulatory reform, is too cozy with the oligarchs on Wall Street and the Lords of Finance in the banking industry.
Despite what I consider to be legitimate criticisms of Geithner, I hardly see how appointing Jamie Dimon would be an improvement. Confidence in Geithner has waned in recent months precisely because he is considered too close and comfortable with Wall Street (he desires to be a financial industry executive, and was even considered for the CEO of CitiGroup before losing out to Vikram Pandit), and he has pursued rather soft reforms for the industry and is considered industry-friendly rather than consumer-friendly.
The Administration couldn’t get any cozier than appointing Dimon: it’s like inviting a wolf to the sheep fold — it just doesn’t make sense! It is simply a bonehead move that will only reap derision and contempt from pundits, and will further erode confidence in the voting public that the Administration is not doing enough, or fighting hard enough for Main Street rather than Wall Street. I would consider Dimon’s appointment a HUGE! mistake. Yet, it is clear that Dimon’s star is on the rise in Washington – and disturbingly, in the White House, where he has attended several private (ie, “secret”) meetings with President Obama. Dimon has been the most vocal critic of Obama’s regulatory reform agenda and the staunchest defender of the status-quo in the financial industry. Dimon has gone so far as to openly criticized the need for a consumer protection agency despite the fact that JP Morgan has had to pay several multi-million dollar fines to regulators in recent years for unethical business practices toward consumers, as well as employees.
The fact that the primary report originates from the New York Post is, umm, fishy — but perhaps appropriate since that’s all I use the NY Post for after I read the sports page…
You decide, read more here.
Photo: Wheelhouse Advisors blog, ERM Current
