Saturday, April 3, 2010

The Most Dangerous Man in America: Jamie Dimon?

The above headline, without the question mark, is used by Simon Johnson to declare that "President Obama's favorite banker", Jamie Dimon, is growing a bank that is much too big. I would argue that the optimum size for a bank should be left to the markets. However, the current environment of bank regulation, that favors the politically elite, is so far from a market situation that no one knows what an optimum size bank would look like.

The curent regulations prevent many banks from growing, while it provides an edge to the favored banks like the one operated by Dimon. Which means that, coming from a different direction, I agree with Johnson's warning about Dimon and understand full well that:

Dimon represents the heavy political firepower and intellectual heft of the banking system.  He runs some of the most effective – and tough – lobbyists on Capitol Hill.  He has the very best relationships with Treasury and the White House.  And he is determined to scale up.
Is he America's most dangerous man? Not in a world where that has people in it who are designning things like Obamacare, but he is close.

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