Banks Are Bad Things—Don’t We All Know That?

It’s retro-Sixties season at Syracuse University, as students hold protests and firm up plans to hold even more protests against the university’s plan to have James Dimon, chairman and CEO of JPMorgan Chase & Co, speak at commencement on May 16. “Chase, “Chase, Chase, go away, don’t come back any day!” Syracuse students chanted at a “Take Back Commencement” rally on April 16–that is, when they weren’t chanting, “Jamie Dimon’s got to go!” As the Huffington Post reported, the 100 students at the demonstration also “held signs, played the tuba, banged pots, pans, plastic jugs, danced to anti-Dimon songs and chanted anti-JPMorgan slogans.”
The reason for the anti-Dimon fervor, which includes a petition signed by nearly 900 Syracuse students and alumni asking the university to rescind his invitation to speak? Well, it seems that JPMorgan Chase is a bank, and we all know that banks are Bad Things. Didn’t banks play a role in the sub-prime mortgage meltdown of 2008 that generated the current recession? As Ashley Owen, a Syracuse senior who was one of the petition signers told the Wall Street Journal: “He’s a figurehead of an industry that has failed the American people in a lots of ways.”
The irony of which most of the Syracuse protesters seem unaware is that “figurehead” is about all the ammunition they’ve got in their battle to have Dimon dis-invited on graduation day. In fact, JPMorgan Chase was the only large Wall Street financial institution to weather the current financial crisis relatively unscathed, posting profits throughout every federal quarter including a $3.3 billion profit for the first quarter of this year. Under Dimon’s leadership JPMorgan started selling off its sub-prime portfolio—mortgages, credit cards, auto loans, and home equity loans involving high-risk borrowers—as early as the fall of 2006, when few other institutions (think Lehman Brothers and Bear Stearns, washed out to sea in the sub-prime tsunami) worried about a growing percentage of delinquencies in the loans underlying the financial instruments they traded.


JPMorgan tried to turn down the $25 billion TARP (Troubled Asset Relief Program) bailout loan that U.S. regulators forced it to accept in late 2008, and a few months later the bank repaid the amount with interest. Even President Obama, while generally critical of Wall Street, praised JPMorgan in February 2009 as “pretty well-managed.” Just last week Dimon won kudos from Fortune magazine writer Patricia Sellers for the candid he wrote to JPMorgan shareholders just before the bank released its first-quarter report. Dimon characterized JPMorgan’s results as “mediocre” (despite its solid profits history, it’s still staggering under the problem loans it acquired when it purchased the assets of Bear Stearns and the failed sub-prime mortgage giant Washington Mutual Inc. for pennies on the dollar last year) and called for JPMorgan manangers to speak their minds at meetings “without fear of offending anyone.”
Dimon’s candor, rare for a CEO, his astuteness at navigating gauging the housing and financial markets at the height of the housing bubble, and the fact that obviously neither he nor JPMorgan played a part in the bursting of that bubble count for little with the protesting students at Syracuse. That’s because Dimon’s performance isn’t the issue. What is the issue is the free-market economic system for which he stands.
Dimon is a “figurehead,” all right. He’s a convenient symbol for the reflexive anti-capitalism that characterizes much of campus culture at both the student and faculty levels. Tellingly, protest leader Andrea Owen informed Wall Street Journal reporter Michael Corkery that she had to cut her interview short so that she could read 20 pages from Karl Marx’s “Das Kapital” for one of her classes. The “Take Back the Commencement” petition displays a similar lack of interest in any personal failings on Dimon’s part as either financier or corporate president. The document instead states vaguely that its signers are “against using the 2010 commencement to restore the public image of the banking industry.” Oh, and also that JPMorgan Chase has “anti-environmental and anti-humanitarian interests” that allowing Dimon to speak would “validate.” Indeed, the Syracuse protesters seem to have started something of a fad in agitating against the tapping of financiers as commencement speakers. Graduate students at Columbia University’s School of International Affairs are up in arms about the administrations decision to invite Citigroup CEO Vikram Pandit as graduation speaker. (That protest at least is arguably legitimate, as Citigroup’s lending practices resulted in its being hard-hit by the sub-prime implosion and has admitted that it is currently under investigation by the Securities and Exchange Commission.)
So far Syracuse Chancellor Nancy Cantor and the rest of the university’s administration is holding firm on Dimon, who was selected from a list of possible speakers formulated by the students themselves (business and economics majors at Syracuse generally support his choice as speaker). The protesters are considering ideas for blocking Dimon’s appearance at commencement that sound about as silly as the April 16 rage dance: holding hands around the administration building when Cantor and other administrators leave work, walking toward the administration building snapping wooden pencils on the ground, refusing to wear their graduation caps and gowns, and holding a vigil for students struggling to pay for college during the current economic crisis. “We want to have a vigil for everyone who had to drop out and everyone across America who is suffering from what JPMorgan represents,” one protester said.
One of the things about Dimon that sticks in the protesters’ craws is that JPMorgan has made a $30 million pledge to Syracuse to fund a technology center and student internships for Syracuse undergraduates, and that the invitation to Dimon was a quid pro quo. One might ask: So what? It might be useful for Syracuse’s Marx-besotted liberal-arts majors to learn that the money that pays for their college educations, as well as the colleges they attend, doesn’t come from thin air, but rather from the astute decisions of the men and women who operate the enterprises that create wealth. As Gregg Greenberg of the blog The Street summed it up, praising Cantor’s refusal to dis-invite the JPMorgan CEO wrote, “Eventually her students will learn that the “Bank of Momand Dad’ will not be open forever and that they may need a Dimon if things get rough.”

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Charlotte Allen

Charlotte Allen blogs for the Los Angeles Times and writes frequently about cultural trends for the Weekly Standard.

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