July 17, 2009
So Now Profits Are Bad News? The Demonization of JPMorgan Chase, Goldman Sachs and Bank of America
Posted by Christine Hurt

So, a few months ago I would have guessed that we would all be cheering if we started hearing reports of quarterly profits from the financial sector.  How silly of me!

This week, Goldman Sachs and JPMorgan Chase have announced huge profits for last quarter.  And no one cheered.  Instead, it was as if your neighbor yelled from his window that his 401K tripled, and your block threw tomatoes at him.  Here, the NYT reports ominously that record profits at these two firms may spell a new world order in the financial industry.  And that order will be bad.  Bank of America, though "still struggling," also beat Wall Street forecasts this morning

The article points out (again, negatively), that these firms have taken advantage of opportunities in the crisis.  JPMorgan picked up Bear, Stearns and WaMu.  (Weren't we glad when that happened?  Wasn't that better than bankruptcy?)  Now, JPMorgan is watching for other opportunities to jump into markets.  Isn't that what capitalism is about?  No.  In fact, the article tells us, we need new regulations to "level the playing field."  What?

Then come the op-eds:  Paul Krugman reminds us that the investment banks got us into this mess, so now we've bailed them out and they are back to their old ways.  The fact that their trading desks are making money again warns us that their "financialization" of the U.S. economy is back in business and leading us to another fall.  Michael Osinski, a former computer programmer and current oyster farmer, even chimes in to compare Goldman Sachs' evil profits to its misunderstood and noble employee Sergey Aleynikov, who was arrested after stealing code from Goldman to take to his new employer.  (The title of the op-ed (probably written by an editor) is "Steal this Code," a not-so-subtle homage to Abbie Hoffman's anti-capitalist book "Steal this Book.")  Implicit in Osinski's apologetic for Aleynikov is the notion that Aleynikov created something, built something, something which he thought of as his "baby."  And the only think he stole was code, which is copied all the time anyway.  He writes of this transgression like attorneys might write of an associate taking her form file with her to her new firm.  Osinski seems offended that Goldman, who (with its friends) destroyed the U.S. economy by transforming it from one where people created and built to one where computers sliced and diced now gets "first class service from the FBI."

So, part of the reputation problem seems to be that these banks took taxpayer money, and now they have the gall to make a profit.  So, would it be better if they had taken the money and not made profits?  Gone bankrupt?  And, Goldman and JPMorgan had the nerve to pay the money back!  So, you mean the U.S. made a loan to someone, they paid it back, and now the borrower is turning a profit?  What a stupid system! 

Last October, we were clamoring for the administration to do something, anything, to save the financial industry.  Now, it seems as if we would be happier if the financial industry stayed dead.  Maybe we like it when our Wall Street friends have no bonuses to outbid us on life's luxuries.  Maybe the op-ed writers like getting into any restaurant in NY they like or getting a summer rental in the Hamptons at a deep discount.

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