Nothing beats a fine whine from our Galtian overlords:
Jamie Dimon, chief executive of JPMorgan Chase, launched a broadside against financial regulation on Wednesday, warning that new capital rules could be “the nail in our coffin for big American banks”. [...]
Mr Dimon’s comments come as Wall Street executives and Republican members of Congress are starting to attack regulation as anger at the financial industry subsides. On Tuesday, Alan Greenspan, the former Federal Reserve chairman, wrote in the Financial Times that the Dodd-Frank financial reforms risked creating “the largest regulatory-induced market distortion since America’s ill-fated imposition of wage and price controls in 1971”.
Spencer Bachus, the Republican chairman of the House financial services committee, has said that regulators are there to “serve” the banks and warned the Treasury not to hurt Goldman Sachs’ shareholders when it writes new rules implementing Dodd-Frank.
Personally, I see absolutely no reason to believe that anger at the financial industry has subsided. The Obama administration was softer on the financial industry than the public wanted, which played into the hands of the other political party. In an ideal world voters would have realized that the other political party wants to be even softer on the financial industry. But in the real world, that’s not how it worked. But I think most people are still pretty damn angry at the financial industry and don’t at all agree with Rep Bachus that the proper role of US public policy is to serve the bankers.
Indeed, what’s missing in the entire Greenspan/Dimon charge against Dodd-Frank is some explanation of what would actually be bad about disadvantaging US-based banks relative to Europe-based ones. Banks located in an inadequately supervised country are necessarily going to have an advantage over banks in a better-supervised country. Just ask Iceland pre-crash. But the advantage stems from greater vulnerability to disastrous crashes. Just ask Iceland post-crash. Yves Smith points out that “the permanent growth losses of financial crises greatly exceed the benefits.” As long as Dimon is whining about this point, we’re doing something right.