Financial Reform

JPMorgan CEO Jamie Dimon will today, once again, stand before the authors of Dodd-Frank and attempt to make the case for why a $2 billion trading loss was a stupid mistake, not a willful breach of at least the intent of the law. Our representatives who wrote the law should hold him to the standards set by JPMorgan’s own Code of Conduct: following the spirit and intent, not just the letter, of the law.

When Mr. Dimon’s predecessor J.P. Morgan Jr. was called before the Senate in 1933, he spoke humbly of a banker as a member of a long-standing profession for which there had grown a code of ethics and customs, “on the observance of which depend his reputation, his fortune, and his usefulness to the community in which he works.”

Reactions to departing Goldman derivatives salesman Greg Smith’s “Why I am Leaving Goldman Sachs,” which appeared as an op-ed in the New York Times last week, have ranged from the hyperbolic — Robert Reich’s “If you took the greed out of Wall Street, all you’d have left is the pavement” — to the addicted — Mayor Michael Bloomberg’s “we need their taxes” (my paraphrase).

Both views are problematic, as I will address. But first, some historical context:

I’m a former banker, a one percenter, and I’m mad as hell too. 

Let’s be clear.  This movement is not frustration being expressed, as President Obama, Treasury Secretary Geithner, and now Eric Cantor have suggested.  Frustration is passive; anger is active.  Martin Luther King was not frustrated.  But beyond my anger is real concern for Democracy, for America, for the people of the world, and for the planet upon which we all depend, and for my children’s future.  It’s why I do what I do.  It’s the inspiration for Capital Institute.

Juliet Schor, a Professor of Sociology at Boston College, writes and lectures on the connections between consumerism, work life, and environmental sustainability. She is a founding board member of the Center for a New American Dream and author of the best-seller The Overworked American: the Unexpected Decline of Leisure, of The Overspent American: Why We Want What We Don’t Need, and Born to Buy: The Commercialized Child and the New Consumer Culture.

We spoke with Schor about her new book Plenitude: The New Economics of True Wealth (published as True Wealth in paperback), in which she questions the conventional wisdom that maximizing income and growth is the path to well-being.