15 Apr 2022 Jamie Dimon, JPMorgan, and the Authoritarian Impulse
It appears that Jamie Dimon, the CEO of JPMorgan Chase, really enjoys telling other people what to do, whether they’ve chosen to interact with him or not.
A few days back billionaire Peter Thiel laid into Dimon (along with Larry Fink and Warren Buffett) as “gerontocrats” for rejecting Bitcoin and for preferring the politicized capital of the ESG movement to the clean individualism of Bitcoin: “BTC v. ESG.”
Thiel may have been overspicing the stew a bit. Dimon’s only 12 years older than he, not the old man of the mountain. And Buffett has rather famously challenged Fink directly about his “asinine” (and nefarious) plans to use ESG to force his personal policy preferences on other people’s companies in the spurious name of “stakeholder capitalism” (about which more has appeared recently in these pages).
He is certainly right, though, that ESG, powered by so-called stakeholder capitalism, is “a deeply political … hate factory,” one explicitly designed to allow the most influential CEOs to use other people’s capital to play the role of unelected, unappointed economic and social czars for a country in which the vast majority shares few of their policy desires.
Jamie Dimon is in many ways as responsible as Larry Fink for bringing about the insurrection from the C-suites. It was he at least as much as Larry Fink who pushed the Business Roundtable to pretend to redefine the purpose of the American corporation in 2019. It is this mendacious and fatuous redefinition that has given Fink, in particular, cover for his attempt to dictate his and Dimon’s political and social visions to all corporations nationwide.
Dimon has jumped into the policy-dictation pool as well. JPMorgan is a publicly traded company legally responsible to its shareholders to act with care in their interests alone, and a too-big-to-fail bank that is ultimately backstopped against the consequences of failure by the American taxpayers – all of the American taxpayers. And Dimon insists that the company does not discriminate on a political basis against businesses or people who seek its services. Yet it has debanked Dinesh D’Souza, a famous and outspoken conservative of decades’ standing. It debanked, for a while, General Michael Flynn, before eventually reversing field and apologizing.
WePay, a Chase subsidiary, withdrew its services from a Donald Trump, Jr., event on the grounds that the event’s sponsors were propagating “hate, violence, racial intolerance, terrorism, the financial exploitation of a crime, or items or activities that encourage, promote facilitate or instruct others regarding the same.” This decision was reversed too, but by then the event had been cancelled. And there was no way to cancel the bank’s clandestine cooperation with the January 6 investigation committee – a committee on which sit no members appointed by the Republican minority – as it handed over its customers’ financial records without any legal process whatever.
Even if the decisions are eventually reversed, this looks like a systemic cancellation problem – one that a bank would create policies and practices to avoid if it were serious about combatting the threat. It does not appear that Chase has acted to stop its politicized banking. Rather, it has focused its attention on a “racial equity” audit, and then followed up in myriad ways that underscore that what racial equity means is active and fulsome discrimination now to make up for other discrimination by other people against other people in the past. The company’s responses have included fellowship programs that are restricted to blacks and Latinos, race- and sex-based quotas for outside counsel and suppliers and other profoundly discriminatory programs.
This reintroduction of overt systemic racism into the company and banking generally is something that most Americans deeply oppose, and that creates tremendous legal, legislative and reputational risks for JPMorgan Chase, risks that an ego-constrained CEO would avoid.
Dimon, though, is not so constrained, nor even is he constrained by consistency. JPMorgan and other too-big-to-fail banks have been barred by some states and are being investigated by others specifically because of their discrimination against carbon-energy generation businesses, or businesses that won’t decarbonize on the politicized schedule that has caused such havoc in Europe. In response, Dimon has recognized that too-early decarbonization is a dangerous idea, but his solution is not to draw back from politicized schedules and political interference in this absolutely vital industry. Rather, he’s called for a “Marshall Plan” to ramp up carbon energy now through government interference now, while later paying for the green transition by similar interference.
Both parts of this plan are dreadful. Within not only general living memory but the living memory of a precocious tot, the United States was producing significantly more energy not by spending bails of government money on it, but by reducing regulation. A flood of government money is certain not to reduce regulation, but to multiply it, as the government demands its say in exchange for the unasked-for infusion of other people’s cash. We don’t need a Marshall Plan to get back to producing enough energy to be able to help Europe to avoid reliance on Russia. We just need both a regulatory rollback to the sepia-toned days of two years ago, and a statutory restriction against additional regulatory increase that will provide at least some protection for energy producers that electoral caprice won’t upend all of their plans and their investments.
The second half of Dimon’s plan is even worse. The Marshall Plan arose in response to very specific circumstances. Europe after World War II was starving, and various parts of the section that remained free of Soviet control seemed susceptible to Communist infiltration as long as they continued to starve in rubble. The Marshall Plan offered American capital to help these countries buy (American) food and build shelter – both things that the world knew how to do with fixed amounts of money, and both things that were sure to make tens of millions of lives better.
None of this is true of the touted decarbonization revolution. We’ve been told for decades that the tipping point into disaster is just a few years away. It appears that all of those predictions have been wrong, but if they haven’t been wrong, it’s too late now for a huge, expensive push toward green energy to make any difference. We should then be racing the economic engines to try to be wealthy enough to deal with what’s coming. If we are instead to believe that all the previous projections have been wrong, but that this exact set are right, we must be shown with immense precision, detail and reliability why these are the special predictions. No one anywhere on earth has begun to provide that. Nor has anyone provided an explanation of how anything the West does can matter if the rest of the world doesn’t go along.
Meanwhile, in contrast to the post-war rebuilding of Europe, there’s no reason to believe that green energy can supply the world’s needs, regardless of the money spent. And there are grave reasons to believe that the efforts to do so will be worse for consumers and for the environment than what we have now.
So no, no Marshall Plan for energy. No ESG/shareholder capitalism-based, “public-private” managerial socialism from the C-suite. As a fairly famous avatar of genuine capitalism once nearly put it, when asked what government should do to fix the economy and save society from problems it had itself created: “Get the hell out of our way!”