Entitlement Issues Redux: Thank You JP Morgan Chase

Gulfstream G550: a good place from which to suffer the slings and arrows of outrageous fortune.

Since JP Morgan Chase Bank is looming large in the news again, I thought it might be useful to resurrect this post I did last year on the overdeveloped sense of entitlement that is forever exhibited by the best and brightest on Wall Street. While Morgan was accumulating its current $2 Billion loss in its proprietary trading accounts, CEO Jamie Dimon continued to lobby hard for repeal of the Dodd/Frank banking reforms and specifically the Volcker Rule, which would prohibit the very trades that have got him in trouble. One of the first things candidate Mitt Romney proposes to do if elected is to throw these regulations out. I wonder if he still thinks that's a good idea given this latest abuse of fiduciary responsibility by a big bank?

Anyway...here's what I had to say on the matter previously.

People who have too much money and people who have too little share one common trait. After a time they come to believe that they deserve their fate. They settle into the trappings of their lives, and wear their circumstances like a second skin. This settling works like a self-fulfilling prophecy. The rich get richer, and the poor get poorer. What started as purely fortune, whether good or ill, becomes the natural order of things.

This all became evident to me as I struggled to make sense of my own fall from grace. I knew that the economy had collapsed, not because of any real or fundamental change in productivity or capacity or supply or demand, but because of an artificial set of circumstances precipitated largely by global financial institutions. While everyone was pointing fingers at the bursting of the real estate bubble and the huge sludge pool of underwater sub-prime mortgages, I knew that the real culprit was the enormous and mostly unregulated market in over-the-counter derivatives, speculation in which had allowed, even forced, the underwriting of the toxic mortgage paper, which in turn had fueled the real estate bubble, which in turn brought us all low when it burst.

The great irony in all this is that the investment bankers and speculators who brought us this mess escaped with our money. They fleeced us. Treasury and the Fed helped them do it. The big audit firms blessed the ubiquitous bookkeeping legerdemain. And when their overvalued and under-performing assets became problematic, we bailed them out. I've written about all this before. So have a lot of other people. If you'd like to sort all this out for yourself, I recommend the following:

• Too Big to Fail – Andrew Ross Sorkin
• Freefall – Joseph E. Stiglitz
• 13 Bankers – Simon Johnson
• The Devil's Casino – Vicky Ward
• Griftopia – Matt Taibbi

These are by no means exhaustive, but they do, together, convey the broad sense not only of what went wrong and why, but that nothing that was broken has been fixed in any real, meaningful way. You should not read the last three without taking your blood pressure medication.

The tragedy is that, even though the contributory problems still lie festering under the surface, nobody cares anymore. The economy is recovering. The markets are orderly. We've got other problems to occupy our collective consciousness. The Middle East is in flames. Japan is radioactive. Charlie Sheen is taking us all to school in a completely different kind of China Syndrome. Who has time to worry about something that happened three years ago, even if many of us are still trying to crawl out of the smoking ruins of our former lives. It's apparently time to move on. I'm trying, but moving on is about as easy as loving my enemies or turning the other cheek.

When I first lost my job, the Lehman Brothers collapse was all over the news. The Lehman debacle was the precipitating event, the end of the beginning, the thing that galvanized the movers and shakers in government and on Wall Street to come together and save themselves from the disaster they had created. These were historic events: rewriting Fed rules to allow the lending of funds to investment banks and insurance companies, death spiral deal making facilitated by government functionaries who came from and would return to the institutions they were regulating, the sale of the TARP program (a one-page legislative mandate) to a panicky Congress by a credible Chicken Little. I was enthralled, and, being unemployed, I had plenty of time to immerse myself in the heady details.

I'd like to say that I learned, among other things, how the other half lives, but it's not the other half. It's more like the other 0.00001%. I learned how the guys in the ethereal high plains of self-entitlement live. They are not like you and me. They may have been once, but no more. They no longer carry the burden of living and working at the sufferance of others. They are the ones who do the suffering, and they do it from high-rise glass office towers, multimillion dollar Manhattan apartments, the custom appointed cabins of their Gulfstream G-550's, and palatial estates where their wives enjoy closets that are bigger than my house.

The most disconcerting thing about all of this is that it became obvious to me that these folks honestly believe that they deserve everything they have and more. They actually think they got where they are because they are smarter, more industrious, better prepared, more enlightened, and ultimately more deserving than the rest of us. They have bought in, wholesale, to their own bullshit, and they are occupied, full-time, curating their singular circumstances.

The rest of us let them do it. We've bought into their bullshit as well. We think they deserve what they've accumulated, and mostly just because they managed to do it without going to jail. So when Jamie Dimon of JP Morgan Trust says we don't need any more banking regulation, we don't think that maybe Jaime's not ready to put down the fleecing sheers just yet. Instead we think, he's smart and he's rich, he must know what he's talking about. And, when Lloyd Blankfein of Goldman Sachs says they didn't bilk their investors out of billions by selling them bundled mortgages that had been hand selected by the firm that stood to profit most if they defaulted, and that their investors were sophisticated speculators who should have been able to figure out what Goldman wasn't telling them, we don't think he's talking out of both sides of his mouth at once. This is Goldman Sachs, for crying out loud, not some fly-by-night investment chop shop like Bernie freaking Madoff.

People listen to people with money. It hardly matters what they say. This is why Donald Trump is able, with a straight face, to tell us that one of his most attractive qualities as a candidate for the Presidency is that he's rich. He apparently believes this is sufficient to convince us of his sincerity, intelligence, leadership, and good judgment in spite of the overwhelmingly contrary evidence of his hair, and the fact that he let his marital infidelity with Marla Maples in 1990 play out on prime time network TV.

If this were all there were to it, that we listen to and believe rich people because they are rich, it probably wouldn't bear remarking. The sad thing though is the other side of the coin—that we don't listen to or believe the impoverished, the more than half that is not in the 0.00001%, the half that does not suffer in executive jets or ride private helicopters to work. Us. You and me. Hell, we don't even believe each other.

I mentioned the other day that I have ascribed to myself 1/40^th the relative value of Bill Gates. By this I mean that I think that my ideas, conviviality, cleverness, and good nature, are, on average, at least 1/40^th as good as his. I don't think this is a vain assumption on my part. I think your ideas, etc., are probably that good as well, and I don't even know who you are.

That being the case, I also don't think it's unreasonable for me to demand from the nebulous creative energy of the limitless universe, the deliberately secularized power behind the so-called law of attraction, that I should receive something akin to 1/40^th of Bill Gates' net worth—specifically $749,000,000. If I had $749,000,000 people might actually begin to listen to me. Some of them might even read my frigging book. (5 darkly humorous and highly entertaining short stories for a mere 99 cents from Amazon. No religion, no economics, no politics...just good fun.. Click the link. Live a little.)