J.P. Morgan Economist Calls Senators ‘Ignorant’

The Huffington Post’s Shahien Nasiripour, a great financial reporter, has a good piece on a top executive at J.P. Morgan Chase trashing Sen. Carl Levin (D-Mich.) and the Hill in general. James Glassman, a Morgan senior economist, writes a note to his clients bashing the financial regulatory reform process and senatorial “ignorance”:

From the perspective of economic literacy, last week’s [Levin's hearings] had to be, well, not memorable, or inmemorable (as infamous is to famous)… The hearings exposed an unnerving ignorance of fundamental principles of market economics by folks who have a hand in remapping rules of finance that will be with us for a while. Flip assertions about what is and is not socially valuable reflect a confusion about our market economy that is as fundamental as knowing that George Washington was the first president of the United States.

He also labels one graph, “People in glass houses shouldn’t throw stones,” referring to the high unemployment rate in Levin’s home state of Michigan.

Sounds to me like Glassman should take his own snooty advice. J.P. Morgan suffered massive losses due to its exposure to the subprime mortgage market it ostensibly did not understand. It received a $25 billion bailout from the American taxpayer. So, his moaning that “low level of economic literacy is plaguing financial reform” rings false in my ears. It was Wall Street’s “low level of economic literacy” that necessitated financial reform in the first place.