Doing well by doing good — but better by doing bad
“Many of the country's most powerful CEOs are finding that they can do well by also doing good,” growls Morley Safer like the war correspondent he once was.
The subject is Year Up, a “boot camp” that grooms struggling young people for corporate jobs. Let's say this right off: Year Up is a wonderful program. Founded by tech entrepreneur Gerald Chertavian, it deserves the highest praise.
But there's Dimon sharing the glory for doing the smallest of good — very small, given the Wall Street behemoth's $18 billion annual income. Safer's questions are so affectionate that Dimon almost seems embarrassed being asked them.
“Now firms like J.P. Morgan are actually paying Year Up $23,000 per intern,” Safer says with awe. Actually, the investment bank's hotshots spend more than that on one month's American Express bill.
“Has that investment paid off for you?” Safer asks.
Yes, it has, answers Dimon. His company has done well by doing good.
But it's done so much better by doing bad.
For instance, JPMorgan Chase recently settled government charges that it palmed garbage mortgages on unsuspecting investors. At the bottom of this subprime-mortgage food chain were the low- and moderate-income borrowers milked by exploding interest rates and punishing upfront fees. Many lost their houses in the inevitable financial collapse.
Since 2011, JPMorgan Chase has made an estimated $185 million helping American companies renounce their U.S. citizenship to avoid paying taxes in this country — all the while staying put. We speak of the “inversion” loophole, whereby a company merges with a smaller one in a lower-tax country and then claims to be based there.
President Obama has called companies exploiting this tax trick “corporate deserters.” Exploitation of the loophole is expected to deprive the U.S. Treasury of close to $20 billion over the next decade. Other taxpayers will have to fill the gap — or we could cut government programs, including those that help “underprivileged youth.”
The investment banks say that if they don't do the deals, their competitors will. That may be true, but Wall Street owns Congress. If JPMorgan Chase really wanted to make a patriotic gesture, it could lead an industrywide campaign urging Congress to end the dodge.
Don't these societally damaging activities rate at least a dishonorable mention on “60 Minutes”? Worry not. The newsmagazine markets itself as hard-nosed investigative journalism, so it will get around to the “uncomfortable” part — to the ugly details. Right?
“It's no secret that Wall Street's image has been tarnished over the last couple of years,” Safer eventually says, letting mild skepticism creep into his voice. He's so scary that Dimon feels obliged to respond with a sheepish laugh.
Safer goes on: To what extent is this activity “window dressing” to show “civic responsibility”?
Dimon responds: “I think we are civically responsible. We don't want to drive successful people down. You want to get people who don't have the opportunity, you want to give them the opportunity.”
And “60 Minutes” lets it go at that.
“60 Minutes” still does some great investigative pieces, but sheesh. Sometimes that clock ticks down in a sad way.
Froma Harrop is a Providence Journal columnist. She can be reached at email@example.com.
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