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Originally published Wednesday, May 16, 2012 at 3:00 PM

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JPMorgan Chase's 'Jamie the Great': tap dancing with derivatives

JPMorgan Chase CEO Jamie Dimon, the shining industry agitator against some of the tougher regulations on banks, has suddenly become the shining example of why still tougher regulations may be needed, writes Maureen Dowd.

Syndicated columnist

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WASHINGTON — Jamie Dimon calls it "a doozy."

And it was. A $2 billion credit derivatives trading bungle that could mushroom to a $4 billion loss.

The shining industry agitator against some of the tougher regulations on banks has suddenly become the shining example of why still tougher regulations may be needed.

After the economy nearly atomized in a cloud of cupidity, Dimon became known as America's least-hated banker. But now the blunt 56-year-old New York City native who snowed Democrats in Washington with all his talk about not lumping in "good banks" with "bad banks" has fallen off his pedestal.

If "Jamie the Great" and his "good" bank can make such a gigantic blunder, sending déjà vu shivers down America's back, what hope is there for lesser bankers?

As Noam Scheiber writes in The New Republic, "we now have ironclad proof — as if we really needed it — that everyone is capable of disastrous stupidity."

Dimon doesn't buy the argument that bosses of big, complex companies can never make mistakes. A smart quarterback still needs great defensive ends, as he puts it, or the guy who runs McDonald's can't ensure all the meat is fresh.

Britain has been rocked by a "shareholder spring," a revolution of ordinarily placid investors vetoing bloated executive pay deals and bonuses. Three top executives of British firms were sacked in revolts of shareholders, who also rose up against giving new executives millions in "golden hellos."

As a pay advisory body crisply put it, "It is unclear how a golden hello benefits shareholders."

It is redolent of the classic movie "The Solid Gold Cadillac," with Judy Holliday as scrappy small stockholder, challenging the board of directors about fat salaries and dubious policies.

With CEO pay going stratospheric as workers' pay grew stagnant, anger was bound to erupt.

Yet there wasn't much ire at the JPMorgan Chase annual shareholders meeting in Tampa, Fla., on Tuesday. It was over quickly and painlessly, despite — or maybe because of — Dimon's admission on "Meet the Press" that his team was "sloppy" and "stupid" and used "bad judgment" in incurring the loss, which has led to the rolling of three heads at the bank, an FBI investigation, and a congressional ramp-up for more chiding hearings.

Talking even faster than usual, the tarnished silver-haired banker told shareholders that he couldn't justify the "self-inflicted" debacle. While the trade was "poorly vetted and poorly executed," he said it wouldn't make a dent in the "fortress balance sheet."

A few shareholders asked pointed but polite questions, but most supported Dimon. "We think you are doing a fabulous job," one Tampa shareholder told the CEO. Outside, a paltry 20 protesters gathered.

The Rev. Seamus Finn, representing shareholders from the Catholic organization Missionary Oblates of Mary Immaculate, did gently press the boss: "We're wondering, Mr. Dimon, given what we've learned, do you still believe a company can self-regulate when trading on their own accounts?" He added: "Furthermore, should our company really be spending shareholder funds on, some $7 million last year alone, on lobbying efforts to thwart the Dodd-Frank legislation and the work of regulators to write the rules stemming from that legislation?"

The priest concluded that the shareholders, "weary of mistakes" and pledges to reform, wonder if Dimon is listening.

But the group endorsed Dimon's pay package of $23 million and let him keep his dual titles of chairman and CEO.

Dimon says he's a "barely Democrat," but he's known as the favorite banker of the president, who called Dimon "one of the smartest bankers we got" on "The View" on Tuesday. President Barack Obama's financial-disclosure report released on Tuesday showed a checking account at JPMorgan worth $500,000 to $1 million, and in 2010 the president defended Dimon's $17 million bonus, on top of compensation in 2010 and 2011 of $23 million.

New York City's chief audit officer is urging Dimon to "claw back" salary and bonuses paid to the top executives who dragged the bank into the excessive risk. That would be a first for Wall Street. Dimon says he is "likely" to do it, but is loathe to "act like a judge and jury" with Ina Drew, the head of the investment office who resigned on Monday, given that she lost $2 billion on that deal while she was making $9 billion on others.

He knows he has to claw his way back to high regard.

"I never put myself on a pedestal," he said. "You lose credibility, you have to earn it back. You have to earn respect every day. It's never how great we are. It's always the good, the bad and the ugly."

Maureen Dowd is a regular columnist for The New York Times.

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