Jamie Dimon is an asshole – so says the entire cryptocurrency community. But whether we appreciate his assertion that bitcoin is “a fraud” or not, there’s one thing about the JPMorgan boss we should remember: when it comes to finance, he knows exactly what he’s talking about.
Fraud is a legal term, of course, which describes the intentional misrepresentation or concealment of facts by the perpetrator which is intended to – and actually does – cause some harm to a victim.
But it also has a more philosophical definition. Donald Cressey, a criminologist and former president of the Institute for Financial Crime Prevention, suggested in 1973 that fraudsters are quite possibly equally guilty of self-deception as they are of deceiving others:
Trusted persons become trust violators when they conceive of themselves as having a financial problem which is non-shareable, are aware this problem can be secretly resolved by violation of the position of financial trust, and are able to apply to their own conduct in that situation verbalizations which enable them to adjust their conceptions of themselves as trusted persons with their conceptions of themselves as users of the entrusted funds or property.1
In other words, they believe that they need something they cannot share; they see an opportunity to have it; and they rationalize their behavior.
This is known as the ‘Fraud Triangle‘ and to understand exactly why Jamie Dimon is an asshole, and not just a dumbass, we need to apply this theory to his earlier work at the largest bank in the USA.
In 2013, the Justice Department announced “the largest settlement with a single entity in American history” when JPMorgan Chase agreed to pay $13 billion related to mortgage-backed securities. There was no admission of fraud.
Earlier in 2013, JPMorgan Chase was fined $920 million by U.S. and U.K. regulators for admitting to “unsafe and unsound practices” related to the London Whale derivatives fiasco. The settlement was civil, no criminal charges were filed against JPMorgan senior management; and Dimon kept his job.
July 2015 – JPMorgan Chase settled for $136M after evidence was found that it instigated lawsuits and obtained judgments against consumers using false and deceptive affidavits and other documents prepared without following proper procedures.
Fines, fines, settlements, fines. But criminal charges for Jamie Dimon, CEO and Chairman of the Board of JPMorgan Chase while billions of dollars of shareholders’ money were refunded to customers, or paid in penalties to the Federal government? Never.
Even Forbes, a reliably pro-establishment capitalist forum, has its own questions. (Although, in an unusual oversight for such a richly-provenanced journal, their search engine optimization is doubtless compromised by their misspelling of Mr. Dimon’s name in the title of this article.)
Jamie Dimon is an asshole – not a dumbass – and the distinction is important. Part of the inherent societal disincentive to act selfishly is that those who do so are ostracized and punished. Jamie Dimon is not singled out by the judicial system. He is not punished. In fact, he continues to be rewarded – to the tune of $28M per year – for running a company that repeatedly settles claims that it has defrauded the public (without admitting liability, naturally).
Even when admitting that “I was dead wrong,” Dimon uses the plural personal pronoun when it comes time to assign actual blame. Mea culpa? More like nostra culpa.
Speculation as to what runs rampant in the minds of billionaires is pointless. We may as well try to imagine what a cold bottle of Fiji water must taste like to a child dying of thirst. But whereas the latter is driven by true need, the former, the drive to accumulate – to have “a financial problem which is non-shareable” – is incomprehensible to most of us.
But to have that drive… and moreover, to be “aware this problem can be secretly resolved by violation of the position of financial trust”… and, confusingly, to find oneself seemingly immune to the judicial process which governs others?
Is it inconceivable that these pillars might lead one to “adjust their conceptions of themselves as trusted persons with their conceptions of themselves as users of the entrusted funds or property”?
What further reinforcement might we need that the third pillar of the Fraud Triangle – rationalization – is hard at work in Mr. Dimon’s psyche?
And if that is so, what possible motivation might he have for describing bitcoin as a fraud?
And that’s why even though Jamie Dimon is an asshole for essentially pissing all over bitcoin, a technology that has the potential to benefit humans across the globe, we might seriously want to consider whether he is actually right.
Because in playground speak, it takes one to know one.
(Image by Steve Jurvetson (Flickr: Jamie Dimon, CEO of JPMorgan Chase) [CC BY 2.0 (http://creativecommons.org/licenses/by/2.0)], via Wikimedia Commons)
Money image by user Maklay62 on Pixabay.com