Commentary By Ron Beasley
Jamie Dimon of JP Morgan Chase and the officers of the other big Wall Street banks are terrorists - economic terrorists. In 2008 they went to the Bush administration and congress wearing suicide vests of toxic loans and demanded that they be bailed out by the US taxpayer or they would blow the economy up. It worked so they are at it again. As Ron Lieber of the New York Times reports the latest threat is they will dump anyone with a less than six figure income if the government regulates their fees.
Chase sure doesn�t sound happy. In a remarkable display of staying on message, it gave the same comment last week when The Wall Street Journal, CNN Money and the trade publication US Banker asked it to explain the reasoning for the new monthly fees.
�We don�t want to raise fees on our customers,� a company spokesman said. �But unfortunately, regulation is forcing us to do it. And as a result, some customers may end up unbanked.�
This statement is striking for a number of reasons, and the eye-popping earnings the bank announced on Friday don�t exactly make the company more worthy of sympathy. So I�ve spent the last week trying to figure out why I was so sure I did not believe it the instant I read it.
As Ron says, the Chase statement is trivially false: of course Chase wants to raise fees on its customers. That�s what it always wants. It already has the maximum amount of US retail bank accounts that it�s allowed � which means that it can�t increase earnings by becoming so attractive that more and more people flock to it. Instead, it would rather increase earnings by steadily culling the least profitable parts of its customer base, and replacing them with richer and more profitable depositors.
JP Morgan Chase CEO Jamie Dimon and CFO Doug Braunstein said on their earnings call today that roughly 5% of bank customers �may be pushed out of the banking system� as a result of the Durbin Amendment on debit interchange. Ron says he �sincerely doubts� that�ll happen � but I take it more as a threat than a forecast. Banks can kick out any customers they like � even embassies. The not-so-subtle implication here is that if the Consumer Financial Protection Bureau starts getting all bleeding-heart on America�s biggest banks by asking them not to gouge their poorest customers, then just maybe those poorest customers might find themselves with no bank at all.
Of course there is no need for them with to have no bank at all. We already have a Socialist answer to the big banks - Credit Unions. They have an advantage - no stock holders, only share holders.
Unfortunately while we may not need the big Wall Street banks the politicians do so it's likely that Osama bin Dimon's terrorist threats will once again be effective.
In a perfect world we would keep GITMO open for Dimon and the other economic terrorists but this is far from a perfect world and the bankster's fraudulent loans and fraudulent foreclosures will magically become legal and we the taxpayers will be the proud owners of a lot of bad loans that should never have been written in the first place.
Yglesias thinks a public option bank through the Post Office is the answer. Believe me that's DOA - the Post Office is already under attack.
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