Occupy Wall Street marches to house of JPMorgan CEO and Federal Reserve board member
Protesters from the “99 percent” movement marched on the Upper East Side of New York City Tuesday, planting themselves on a block between FAO Schwarz and Bloomingdale’s where high-profile members of New York’s moneyed elite live.
Among the targets: Conservative donor David Koch, media mogul Rupert Murdoch and JPMorgan Chase CEO Jamie Dimon. The march plays into the broader themes of the 99 Percent movement by directly confronting leaders of the business and financial elite. It also specifically condemned Gov. Andrew Cuomo’s (D) proposal of a cap property taxes thought to benefit New York’s highest earners.
But Dimon has another connection to economic policy apart from his wealth, his politics and his role as head of a major financial firm: He sits on the Board of Directors of the New York Federal Reserve, one of the most important economic policymaking institutions in the country.
Dimon is a “Class A” director on the New York Fed board, meaning he is a banker who was chosen by the New York Fed’s member banks to represent them on the board. Under the Dodd-Frank financial regulation law, “Class A” directors no longer have a role in selecting the president of the regional Feds, but they did have that power during the first three years of Dimon’s tenure on the board.
When it comes to the Fed’s power to stimulate the economy by boosting spending, Dimon has mostly been a supporter. He endorsed “quantitative easing” and keeping short-term interest rates low. However, he has also been one of the leading proponents of the view that many of the current economic problems are caused by too much government regulation.
In the minds of many Wall Street observers, Dimon’s name is strongly associated with the financial crisis of 2007-2008. It was JPMorgan that initially developed the type of credit derivative that caused the failure of multiple financial firms, although JPMorgan itself managed to escape mostly unscathed from the crisis because it wasn’t as exposed as other firms.
Dimon has been a strong critic of financial regulation in the post-crisis era. He has called for the United States to withdraw from the Basel international regulatory regime after a raise was made to the minimum amount of capital that banks are required to keep on their books. He called the new rules “anti-American.” And he has publicly speculated that sluggish U.S. job growth is caused by new financial regulations from the federal government since 2008.
Most economists point to insufficient capital as the reason why so many financial firms failed or were bailed out by the government during the crisis. The New York Federal Reserve, as one of the institutions charged with regulating Wall Street banks, approved Wall Street’s use of credit derivatives, contracts that transfer risk from one financial firm to another. Wall Street banks used derivatives as a way to free up capital that they were otherwise required to keep on their books as insurance against a loan failing.
Since the crisis, Dimon has also been very involved in politics. He has close ties with the Obama administration and for a while had open access to Treasury Secretary Tim Geithner, who was president of the New York Fed during Dimon’s first three years on the board.
Many say that Dimon’s close relationship with Obama officials has cooled, and he has recently met with Republican presidential candidate Mitt Romney, who has surpassed President Obama as the biggest recipient of Wall Street campaign contributions in 2012.
Here’s video of the “Millionaires’ March” getting ready to head to Dimon’s house: