Jamie Dimon is right about socialism, and Bernie Sanders is wrong about the 2008 'bailout.' Here's a quick fact check about both.
In an interview for CNBC’s “Squawk Box” in Davos, JP Morgan Chase CEO Jamie Dimon said something quite sensible and historically correct about socialism:
Most state-owned enterprises don’t do a particularly good job. You look around the world and they become corrupt over time. That doesn’t mean that capitalism is perfect. That doesn’t mean that every public company is perfect. No, there are flaws.
It doesn’t bode well for the Democratic Party of 2020 that one of its leading presidential candidates pushed back at Dimon for these remarks. Bernie Sanders, Alexandria Ocasio-Cortez, and the New York Times might think socialism is a good idea.
But history resounds with examples of Dimon’s thesis. Greece and Spain’s woes. The Soviet Union’s bread lines and human rights nightmares. The People’s Republic of China’s devastating famines and human rights nightmares. Venezuela’s brutal economic crises – and human rights nightmares.
Ahem, what about Scandinavia?
Bernie Sanders says Jamie Dimon was fine with socialism when his bank got a multi-billion bailout from the government. But he’s wrong. The government did not bail out JP Morgan Chase in 2008. This was already settled by one of Sanders’ colleagues.
In 2012, when Dimon testified before the Senate Banking, Housing and Urban Affairs Committee, Sen. Jeff Merkley challenged him about taking TARP funds.
The JP Morgan CEO answered:
JP Morgan took TARP because we were asked to by the Secretary of the Treasury of the United States of America. Put the FDIC in the room; the head of the New York Fed, Tim Geithner; chairman of the Federal Reserve, Ben Bernanke.
He added, over Merkley’s repeated interruptions:
We did not, at that point, need TARP. We were asked to, because we were told, I think correctly so, that if the nine banks there, and some may have needed it, take this TARP, we can get it into all these other banks and stop the system from going down.
There you have it. The funds weren’t a “bailout.” JP Morgan Chase didn’t need the money. The government told them to take it. And they weren’t just given cash either. It was a low cost loan that the bank repaid.
While we’re on the subject of hypocrisy, Sanders seemed fine with capitalism when his book sales pushed his net worth past $2 million. And he seemed fine with capitalism when he bought his third house, a ritzy half-a-million dollars vacation home to summer in. How many poor children’s health insurance policies could he have bought?
The trouble with politicians like Bernie Sanders and Alexandria Ocasio-Cortez is they’re champagne socialists. To address poverty, they advocate radical changes to the most successful economic engine ever devised, heedless of the unintended consequences.
And yet they and all their supporters could just do something about poverty themselves, with all the money they raise election after election to give to media corporations for ad placements. They wouldn’t have to be radicals. And they wouldn’t have to disrupt capitalism. They could just actually care about the poor instead of power.