If the Supreme Court hadn't ruled as it did in Lawrence v. Texas, most of the Republicans on the Senate Banking Committee might face arrest, were they to travel to Texas. In groveling before JPMorgan Chase CEO Jamie Dimon at Wednesday's hearing, Republicans on the committee came close to violating the broadly worded sodomy statute the high court overruled in 2003.
Like other too-big-to-fail banks, JPMorgan Chase is backstopped by the federal government. In the event of the bank's collapse, the government (read: the taxpayer) provides the money to make it whole again.
Dimon was called before the committee that writes the laws for his industry to explain how his investment division lost $2 billion on one trade.
Yet what should have been rigorous questioning by indignant senators turned out to be two-and-a-half hours of man-love, as one Republican senator after another gave himself over to the charismatic investment bank CEO.
Consider South Carolina's Jim DeMint:
DEMINT: Thank you Mr. Chairman. Thank you Mr. Dimon. I -- I really appreciate you voluntarily coming in to talk with us. It is important that we talk about things in the industry. It'll, I think advise us, help us and -- as we look forward. And hopefully it will contribute to a best practice scenario in the industry and I appreciate your emphasis on that continuous quality improvement. We can hardly sit in judgment of your losing $2 billion.
We lose twice that every day here in Washington. And plan to continue to do that every day. It -- and it is comforting to know that even with a $2 million -- $2 billion loss in a trade last year, your company still, I think had a $19 billion profit.
DeMint avoided kneeling before Dimon, but he came close: "Thank you... advise us, help us." You took time from your busy schedule to fly down from New York to enlighten us. We throw money away and are in no position to judge you.
Remember, the bank failures that delivered this country, and the world, into the worst economic crisis since the Great Depression? The crisis the nation has yet to recover from? The crisis caused by the deregulation of financial institutions?
Back to DeMint:
DEMINT: My -- my concern and I -- and some of the questions have been very helpful. As -- as you can tell there's a temptation here every time something goes amiss, that we want to add a regulation and we've surrounded the banking industry with so many regulations and we still seem to have problems here and there.
Problems here and there? A $2 billion loss on one transaction, by an institution whose failure will create systemic risk, reduced to "problems here and there."
But Jim DeMint wasn't through with Dimon.
I -- I -- I think we do need to recognize that you are a very big bank, the biggest in the world. You've got very big profits and periodically you're going to have big losses. And we need to look at that as part of doing business, but also in the context of making sure, as the senator just said, that we don't create additional risks for the taxpayer -- which you appear to be in much better shape than -- than we are as a country.
DeMint stopped short of thanking Dimon for losing $2 billion, but the obsequious Republican senator came close.
Two liberal Democrats on the Committee, Jeff Merkley of Oregon and Sherrod Brown of Ohio, pressed Dimon with tough, on-point questions. (At one point Merkely said: "This is not your hearing. I'm asking you to respond to questions...")
Other Democrats, such as Rhode Island's Jack Reed, asked a few challenging questions.
But the Republicans were an embarrassment to their constituents — unless they consider the banks their constituents.
And maybe sodomy is the wrong metaphor. Isn't it the Mann Act, also known as "the White Slavery Act," that prohibits interstate prostitution?
JPMorgan is Banking Committee Chair Tim Johnson's (R-South Dakota) second largest contributor over the past 20 years. It is also the second-biggest donor to the number-two Republican, Alabama's Richard Shelby. Dimon's bank is the third largest donor to the third-ranking Republican on the committee, Mike Crapo of Wyoming. And JPMorgan is the fourth-largest career contributor to Democrat Chuck Shummer, who represents Wall Street -- that is New York. So love is for sale on both sides of the aisle.
You can watch the entire hearing, if you have the stomach for it, by going to the Committee website and clicking on the video link.