Monday, June 4, 2012

What the Mainstream Media Still Doesn't Get About Big Banks

JPMorgan Chase losing $2 billion on a risky trade has many pundits calling for more regulation. But they're still missing so much of the story.

Reading over the coverage of JPMorgan Chase’s $2 billion fiasco, it’s impossible not to be reminded of the heady early days of the Lesser Depression. Not because the scale or risk is equivalent, but because the naked hubris, incompetence and greed on display have once again stirred up a regulatory fervor among large swaths of the media.

All of a sudden pundits and editorial boards are sounding less like Paul Ryan and more like Paul Krugman. There are also the predictable right-wing hacks who claim this episode somehow makes the case against the Volcker Rule, the part of Dodd-Frank that bans commercial banks from engaging in speculative bets to increase their own profits, known as “proprietary trading.” Read More