I make it a habit of regularly bagging the transcribers of press releases (formerly known as “journalists”) for utterly failing to do their jobs, particularly when it comes to challenging the rhetoric of the so-called “free market.” So, today, is a day of rest ranting about the sad state of affairs among the denizens of the Fourth Estate. Because, hells bells, Michael Hiltzik at the Los Angeles Times has penned a devastatingly good piece about the most recent example of JP Morgan Chase getting slapped on the wrist for a pretty big piece of scamming the people.
If you take our federal and state energy authorities at their word, you just might be convinced that the $410 million penalty dropped Tuesday on JPMorgan Chase for manipulating energy markets in California and the Midwest is a big deal.
“A historic fine,” declared Commissioner Tony Clark of the Federal Energy Regulatory Commission, which reached the settlement with Morgan. He said it “sends a strong signal.”
Over at the California Independent System Operator, the quasi-state agency that was directly victimized by JPMorgan’s behavior, the penalty was hailed as “a success story for market monitoring and market oversight,” as ISO general counsel Nancy Saracino stated on a conference call with the news media. “It’s a huge deterrent for the rest of the market,” she said.
Here are some better ways to think about this “historic” penalty, which was imposed for JPMorgan’s $125-million rip-off of California and Midwestern consumers: It’s chicken feed. A pittance.
It will have no more deterrent effect on white-collar wrongdoing at JPMorgan or anywhere else than telling its traders they’ve got to take the Ferrari to work instead of the Lamborghini, though they can still take the Lambo to the beach house. Our top regulators actually think they’ve gotten the better of a huge illegal enterprise, which is a good sign that they’re delusional. They didn’t even get Morgan to admit that it had done anything wrong. [emphasis added]
So, to give him the clicks to his story, go over and read the rest. It’s a great yarn and he lays out the case against JP Morgan, which he calls worse than the behavior at Enron.
His last paragraph nails it:
Is that what we pay our regulators for — justice on the cheap? JPMorgan’s behavior was disgusting, but FERC’s decision to let the bank get off for pennies on the dollar is inexcusable.
As readers here know, I’ve been arguing for a couple of years that this entire show of fining companies is a charade, paid for my shareholders and customers, when the guilty parties (ooopppsss…sorry, no one ever has to admit to guilt in most of these deals) should really be getting jail time. And Jamie Dimon should have long ago at least lost his job, if not be chief mess hall cook in the prison cafeteria.
But, that’s not the way it works in America. If you are a banker, you get saved by taxpayers when you fuck up, while the White House tells workers in Detroit to drop dead and go ring someone else’s bell for financial assistance. Obscene.