Reforming Global Finance

Wall Street: Wake Up, Step Up or Shut Up

Wall Street lost its bid to unseat President Obama. Now it should get onboard with sensible regulation and oversight.

JPMorgan Chase CEO Jamie Dimon (Credit: World Economic Forum)


  • Unrelenting opposition to modest financial reform and an inability to take even mild criticism has turned Wall Street into a caricature of itself.
  • What Dimon and others on Wall Street need to do is show real, meaningful leadership. That means calling off their war on financial regulation.
  • As CEO of the biggest too-big-to-fail bank, Dimon has the ability to change the entire debate by aligning his bank's actions with his words.

For Jamie Dimon and all of Wall Street, it’s time to wake up and step up or, finally, shut up.

Wall Street and its investment banks lost on their biggest bets in a long time: defeating President Obama‘s re-election bid, defeating Elizabeth Warren in her campaign for the U.S. Senate and, most important to them, defeating financial reform.

They went all in, spending hundreds of millions of dollars directly and indirectly. They had a presidential candidate, Republican Mitt Romney, expressly vowing to repeal the Dodd Frank financial reform and Wall Street re-regulation law. All their efforts were for naught. The loss was total.

The question now is whether or not they will learn anything. If past is prologue, they won’t. But they have a moment to seize an opportunity, rehabilitate themselves, and do what’s right for the country — which will also turn out to be what’s right for Wall Street.

So, the question is, will Jamie Dimon allow himself to continue to be the pretty face behind which the ugly business of Wall Street gets done? Or will he, against all evidence, become a statesman that rises above his parochial economic interests and ego and take on a role that promotes the greater good?

Unrelenting opposition to the most modest financial reform and an inexplicable inability to take even occasional mild criticism has turned Wall Street into a caricature of itself.

Will it move on? Will Dimon see how self-defeating such an approach and attitude ultimately is? Will Wall Street fall even lower in the opinion of the American people?

These are some of the questions confronting Dimon and Wall Street at this electoral crossroads.

What should he do? First, he has to realize that using his influence to address the fiscal cliff and related issues isn’t going to do him any good. Actually, it reflects shallow thinking and useless conventional wisdom.

Yes, Wall Street and American business have to try to influence the rigid, ideological, right wing that is still opposed to all things Obama and think compromise is akin to surrendering to the devil.

But doing that is just trying to restore a little sanity to the debate. Trying to get people to be responsible is not leadership, and it is not being brave. Nor, frankly, is it doing more than what should be done as a routine matter anyway. It is also, unquestionably, in their immediate self-interest.

What Dimon and the others on Wall Street need to do is show real, meaningful leadership. That means calling off their war on financial regulation (and Obama and the Democrats, more broadly).

It means calling off the thousands of lobbyists and lawyers, reaching out to those fighting for financial reform, giving up on those things that help their short-term profits and supporting those things that promote long-term growth and market confidence.

Just one big example: Dimon has often said he is against too-big-to-fail banks and financial firms. He has gone so far as to testify recently that if any such firm requires government assistance that it should be “dismantled” and “the name should be buried in disgrace.”

But, as is so often the case with Wall Street, what Dimon says isn’t what his lawyers, lobbyists, allies, front groups, purchased academics, political fundraisers and other fellow travelers (either directly and indirectly on his payroll) fight for and against.

His bank, JPMorgan Chase, is the biggest too-big-to-fail bank in the United States and the world. Dimon alone has the singular and unilateral ability to dramatically and meaningfully change that entire debate by aligning his bank’s actions with his words. That would be leadership. That would be a statesman.

This isn’t asking Dimon or his counterparts on Wall Street to become public servants or even to act against their own real best interests. The war on financial regulation is not only wrong, it is not even in Wall Street’s best interests.

For 70 years after the Great Depression, Wall Street and the U.S. financial industry was more heavily regulated than at any time in history. Yet the United States prospered: It built the largest and most broad-based middle class in the history of the world, its businesses thrived, and Wall Street dominated finance worldwide.

What happened? Deregulation and non-regulation resulted in the biggest financial collapse since the Great Crash of 1929 and has caused the worst economy since the Great Depression.

That is going to cost the United States no less than $12.8 trillion. It has cost Wall Street, too, in terms of prestige, confidence, status, revenue, profits and influence, as so dramatically proved in this election and in the opinion polls.

This all proves the value of Goldman Sach’s old but artless slogan: “long-term greedy.” A key problem is that Wall Street and its enablers have all become super-short term greedy. It is what caused the financial collapse and is destroying Wall Street, as well as rotting and corrupting the country’s political system and culture.

There is nothing wrong with making money, even lots of it. But it must be done in the service of open, fair and competitive financial markets and a growing real economy rather than just grabbing the biggest bonus as fast as possible.

So the choice is Mr. Dimon’s to make: statesman or shill for a discredited Wall Street?

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About Dennis Kelleher

Dennis M. Kelleher is the president and CEO of Better Markets, Inc., a nonprofit organization that promotes the public interest in the U.S. and global financial markets.

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