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writing for godot

Wreak Havoc, Rob a Bank, Get a Bonus: Class Warfare Unmasked

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Written by Thomas Magstadt   
Wednesday, 29 January 2014 01:30
Breaking news that stock markets around the world are in free-fall mode competing with a story about JP Morgan CEO Jamie Dimon being awarded a heart-stopping, headline-grabbing, tub-thumping pay increase for 2013. What does it mean?

Supposedly, the boss was asking for his 2013 compensation to be roughly equal to his pay for 2012, or $11.5 million. Recall that "[l]ast year the board decided to cut Dimon’s 2012 bonus payout, a decision that was driven in part by a desire to hold him accountable for some the issues that led to a multibillion-dollar trading loss stemming from a bad bet on derivatives." But what actually happened is that the bank’s board of directors awarded Dimon total pay worth $20 million for 2013 – that's a tidy $8.5 million over and above his 2012 pay (!) "even though a steady stream of scandals and a raft of regulatory actions have in recent months cast doubt on Mr. Dimon’s leadership at the nation’s largest bank."

Never mind that the big raise for 2013 came in the face of opposition from a vocal minority of board members.

Never mind that "JPMorgan Chase recently reached yet another settlement with the U.S. government -- a $13 billion deal with the Department of Justice for peddling deceptive mortgages" or reported a $400 million loss in the 3rd quarter thanks to a $7.2 billion legal tab.

Never mind that Dimon's bank is reportedly holding $23 billion in reserves for potential litigation.

And never mind that we're talking about the same too-big-to-fail bank whose top managers "recklessly gambled with our economy".

JP Morgan is still flying high and Jamie Dimon got a 74% raise last week.

To understand what it means consider that the decision to give Dimon a multimillion dollar raise comes at a time when:

1. The minimum wage in this country is a mingy $7.25; it was set in 2009 and many right-wing Republicans, business leaders, and libertarians advocate abolishing it.

2. The top one-tenth of one percent who make an average of $23.8 million per household have taken the lion's share of the nation's economic growth over the past 30 years; the average income for 90 percent of US households is $31,244.

3. Like others of his ilk, Jamie Dimon has not been put on trial for his role in bringing about the 2008 financial calamity that disrupted the lives of millions of Americans; indeed, Dimon points to the fact that the bank he heads AVOIDED going to trial by negotiating a settlement with the Justice Department as evidence of his stellar leadership.

4. According to a 2013 American Civil Liberties Union (ACLU) study, more than 3,200 prisoners are without parole for nonviolent serving life sentences offenses, including siphoning gas from a truck and shoplifting belts from a department store.

5. "In the 2010 campaign cycle, people and political action committees associated with banks gave more than $18.8 million to federal candidates, committees and parties through November 2010." JPMorgan alone contributed the tidy sum of $671,221 to its favorite candidates and campaigns in 2010. The American Bankers Association chipped in almost a cool million ($919,150).

Meanwhile, back at the big bad bank Dimon runs, most of the 10 board members are – surprise! – rich white guys. The three-member "compensation committee" includes Lee Raymond, the former CEO and Chairman of the Board of ExxonMobil, William C. Weldon, former CEO and Chairman of the Board of Johnson and Johnson, and Stephen Burke, a Harvard MBA, who is CEO of NBCUniversal, Executive Vice President of Comcast, and a director of Berkshire Hathaway.

Jamie Dimon is both the CEO and Chairman of the Board that awarded him the oh-so-sweet pay package. For the record, Dimon's pay in 2007 was $49.9 million. (Presumably, $50 million sounded a bit too tawdry.) For the three-year period, 2009-2011, he pocketed a total of $62.2 million.

Make no mistake: the decision to reward one of the ringleaders in the 2008 Wall Street collapse and subprime crisis with a multimillion dollar raise is not a mindless act by a clutch of privileged cretins. Rather it is a deliberate move freighted with symbolic meaning. These guys are shameless, arrogant, and utterly unrepentant. Worse still, the social and economic privileges they enjoy now come with a political guarantee of even greater importance: immunity from prosecution. Thanks in no small part to gerrymandering, the filibuster, and Citizens United, the best way to rob a bank in America is to "own" one.

Note: When an earlier version of this article appeared at Nation Of Change (www.nationofchange.org) on 01/27/2014 it prompted a strong reaction from, and running debate between, two well-informed readers with diametrically opposing points of view on my Facebook page. Read it at https://www.facebook.com/thomas.magstadt. The third participant, by the way, is a well-known Kansas City artist and (full disclosure) a personal friend.
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