Mitt Romney and House Speaker John Boehner appear to believe that the best way to defeat President Obama in November is by focusing on the economy. The sluggish economy certainly makes Obama vulnerable, according to most of the polls, but the economic news also continues to underscore the ideological rigidity and impoverished thinking behind the Republican program.
The latest news involves JPMorgan Chase and the latest financial genius to be revealed as fallible. Jamie Dimon, the chairman and CEO of JPMorgan, announced in recent days that the bank had lost $2 billion in questionable investments that Dimon himself was forced to describe as a “self-inflicted” disaster. Dimon had to face investors at the bank’s annual meeting this week, some of whom said Dimon should no longer act as both chairman and CEO. The board needed to exert greater oversight, they said. In the end, however, Dimon did not suffer a demotion, and he was allowed to keep his $23 million compensation package.
The FBI and federal prosecutors, meanwhile, are looking to see whether any laws were broken by JPMorgan traders.
After the fact, it’s easy to spot a disaster. Before the fact, Dimon was a genius who had managed to guide his bank through the financial crisis without grievous losses. It turns out one day’s genius is the next day’s financial pirate, steering the nation’s economy onto the rocks. After all, it was risky trading like the recent investments by JP Morgan that crashed the economy three and a half years ago.
Dimon resisted the Dodd-Frank law, which was designed to impose financial restraints on big banks, though now, chastened by recent experiences, he acknowledges that regulation might be useful. Mitt Romney, John Boehner and other Republicans also opposed tough regulations. And that is how the economy — or at least the predatory capitalists who use the economy as a plaything — can play into the hands of Obama.
Romney argued after the JPMorgan fiasco came to light that this is the way capitalism works. JPMorgan took the risks, and it will take the losses. The trouble is that the big banks put at risk the entire economy and people’s jobs all across the country. Millions of people lost their jobs as a result of the last crash. JPMorgan’s recent troubles will not sink the economy; indeed, the company as a whole will be able to absorb its losses. But the bank has proven that, even in the wake of recent disasters, banks can’t be trusted not to wreck the economy. This is a lesson that Romney refuses to learn. But let him argue now that JPMorgan and other big banks must be treated with kid gloves.
Meanwhile, Boehner has promised to create another fiscal crisis by holding the federal budget hostage to blackmail over the debt ceiling. Boehner’s plan appears to be part of the Republican strategy of wrecking the economy with the hope that voters will blame Obama. Not only is Boehner seeking to coerce the Obama administration into further austerity, further depressing the economy, as in Europe. But he is threatening to put at risk the credit-worthiness of the United States by playing chicken with Obama over the debt ceiling.
The voters are catching on to these congressional machinations, or at least public opinion polls suggest they are. Congress is held in lower regard than almost any institution in the nation. Obama and his campaign are no doubt shaping a message designed to show voters the destructive role the Republican Party is playing with the economy and urging voters, not just to re-elect Obama, but to elect enough Democrats to Congress that they can break the stranglehold that radical Republicans have on policy.
Economic events — JPMorgan’s meltdown — combined with the destructive policies of congressional Republicans are making a strong case for Obama’s re-election. Obama needs to perform a form of political jiujitsu, letting the momentum of Republican nonsense propel the Republicans to defeat.
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