15 May 2011

Considering J.P. Morgan

I confess that I am a bit confused by what I am considering... and I have things to do.  I think this is one of the things that happens to us when considering our current condition.  There is a moment when the connections, implications, challenges, structures, relationships, etc. all become very complex.  It can become difficult to understand how to get things done.  Questions about inclusion and exclusion go right out the window.  Then it seems to me that we might at some such point begin to deploy or rely on strategic coping to deal with the complexity and feeling of confusion.  The confusion itself might be a coping mechanism.  I have some form of all this going on much of the time.

I am also not a conspiracy theorist.  I mostly just consider such conspiracy theories advanced forms of blame, which is to say they may indicate some part of what is occurring, but are usually very convenient for the holder.  These things I write are not meant to be some sort of definitive research or suggest prescriptive answers.  I am simply working through what I can feel about the delusional insanity of this moment as best I can.  These are meant as reflections on that process.  If you have chosen to read these, please do not take them as more than that.

I am currently thinking about J.P. Morgan Chase.  I do not apparently have any explicit, immediate relationship to J.P. Morgan.  At the time of the J.P. Morgan, Chase merger I was working for a consultancy that was helping with the post merger integration.  J.P. Morgan was not my client, but I was writing white papers about post merger integration and working with the team that was accountable for the post merger integration and redesign from time to time.  Like most mergers that merger did not do most of the things that were espoused as the purpose for the merger.  In terms of wealth consolidation however, it was very effective, which should be the real measure and regulatory concern with mergers, since that is the actual purpose.  This incongruence between espoused ends and actual ends is a gold mine for management consultants, since most people in the corporation fully believe that they must produce the espoused ends and do everything they can to do so.  Most consultants believe this as well.

So I am thinking about J.P. Morgan and I am confused.

Consider the following ad.  

There is a series of these ads, the latest emphasizing the idea of investing in 'home.'  I cannot seem to find that one on the net as of yet.

What are these ads saying?  J.P. Morgan is your friendly neighborhood bank?  What are the implications of 'home' and 'place?'  "The way forward."  This is the current branding mechanism.  The ad makes a sort of emotional case for some kind of localization as 'the way forward,' an idea with which I more or less agree.  The good news about this ad is that the marketing at J.P.Morgan Chase apparently feels that there is sufficient interest in local banking that they are advertising in this way.  I wish I understood this better.  Do they imagine themselves competing for local deposits against local banks?  Or is the imagined competitive landscape one of competing against other massive banks such as BoA for local deposits, by making themselves look local in some way?  Of course the ad is a complete lie.  Such 'local' action seems to be about a quarter of their business, but does not match that percentage in terms of profitability, most of which seems to sit in their Investment activities.  It is not directly about the local business or community in any way.  I think it is more of a PR piece to distract people from the kind of reaction they are having to Bank of America.

Before we get too far, perhaps it might be useful to consider these two bits of wisdom from Wendell Berry.

The same kind of thing is now happening in banking. In the county next to mine an independent local bank was recently taken over by a large out-of-state bank. Suddenly some of the local farmers and small business people, who had been borrowing money from that bank for twenty years and whose credit records were good, were refused credit because they did not meet the requirements of a computer in I distant city. Old and once-valued customers now find that they are known by category rather than character. The directors and officers of the large bank clearly have reduced their economic thinking to one very simple question: "Would we rather make one big loan or many small ones?" Or to put it only a little differently: "Would we rather support one large enterprise or many small ones?" And they have chosen the large over the small.
"Conserving Communities," Wendell Berry

I know from my own experience and observation that a bank of community scale, owned principally by local investors, understanding it dependence on responsible service first of all to local customers - even in a fevered delirious economy - can function usefully and considerately as a part of the community.  Such a bank does not, because if it is to survive it cannot, adopt the lending practices that resulted in our recent housing bubble.  In such a bank the loan officers understand necessarily that their responsibility is to the borrowers as much as to the bank.  In a locally owned community bank, the lender is a neighbor of the borrower.  You don't put your neighbors into trouble or into ruin by misleading them to assume debts they cannot pay - which ultimately, of course, would ruin the lender.
"What Matters: Economics for a Renewed Commonwealth," Wendell Berry

JP Morgan received USD$12 billion in bailout funds.  They used this to build a new hangar for the new corporate jets they bought, among other things.  The hangar for the jets is a 'green' hangar.  yay...?  If you are not familiar with the basic way bailout funds work it is something like this.  The financial institution pleads their desperate case.  The government gives them a low interest loan.  The financial institution puts up low value collateral for the loan, such as the student loans the institution may hold.  The government now owns the low value collateral.  If those default then it is on the government.  It is essentially a re-leveraging of the debt of these massive financial institutions, funded by the taxpayer, through which the banks get to clear all the low value items on their books at the expense of the US citizen. I think the total averages out to just under $3000 per US tax payer.  This does not include the direct Fed sponsored bailout, in general or in the case of J.P Morgan.  This is currently being unsuccessfully investigated by the US Congress.  Additionally it creates an environment of scarcity and devaluation in which the reinvestment of the now re-leveraged debt is favorable.  They essentially have a bunch of free capital at a time when that is very leveraged.  I think the economist Joseph Stiglitz wrote and talked about this a lot around the time of it happening and you could look at that for a clearer view.

J.P. Morgan is the quintessential non-local, thoroughly global financial institution.  Their fate is in no way tied to the fate of 'place' or localized community and business.  It is not even subtle.  And what are their 'investment' activities concerned with?  Consider the following article here.

Who is J.P. Morgan in that?  I am an interested citizen.  I wonder if I could get a multi helicopter support team from the military to go on a resource tour of Afghanistan?  Did J.P. Morgan pay for that?  I mean, is it a rental deal of some sort?  If J.P. Morgan payed for it, it just means the US taxpayer paying for it in any case.  I have not noticed the Chairman of J.P. Morgan and his military entourage in my neighborhood recently... you know investing in the places we call home in order to show the way forward and whatnot.  Creating millionaires? No. Rather he is investing in the displacement of the places called home for millions of people for the sake of acquiring 'resources' to support a rapacious consumer based economy.  

Add to my incomplete list of the simple, but seemingly impossible things to do from within an industrialized context: Remove all money from any global bank.

So the war in Afghanistan is actually a war with China over resources?  I suppose I should have known that.  Well... China and the Taliban.  I suppose I should just resign myself to the insanity of playing out some tribal, zero sum insanity about who owns the planet and who will profit from such ownership.  I suppose that would be ok if the owners had any real sense of responsibility and accountability for anything besides the health of their own coffers.  I have great compassion for almost all the people in such systems and effected by such systems, but I do not have compassion for the system, nor the corporate entity as such, though I find it analytically useful to consider the delusional frame in which such systemic actions seem to make sense.

My response to this at the moment is also strategic and decidedly adolescent since it mostly consists of particular, succinct communication:  fuck you.  I could elaborate on that and perhaps have been.  One danger of such a sentiment is that it is depressing, since there really is no appropriate object for such indignation.  I do not always feel this and I feel like it is a kind of response in kind.  Essentially when the Chairman of J.P. Morgan militarizes a prospecting journey to Afghanistan, I cannot help but feel this as communication of that sort to most of the people on the planet.  These institutions are saying "fuck you,' even as they market themselves as benevolent and create arcane rationalizations for how that is so.  

They are accountable to no one.  Nation-states serve and are directed by them, and not the reverse.  They have no "place."  They have no "home."  They have no accountability to you.  They do not care about you in any way whatsoever, beyond of the equation of their profitability.  You do not figure in the board room and executive suite decisions, unless you occur in some way as a cost or impediment.  Do not for a minute believe that it is otherwise.  Such entities cannot even keep promises to their own employees when they want to!  What on earth would ever have us believe that such an entity had any concern for our well-being or the well being of the planet in any way?  Any communication whatsoever that indicates such a concern is simply a lie at the structural level of the globalized corporate system.  

This is true even in the case of well intended leaders and owners.  Many, many of the people are well intended, compassionate, and thoughtful in ways that seem easy to recognize and understand.  This incongruence – between the positive intent of individuals and the structural impossibility of a corporation successfully holding a view that is any way counter to its own profitability – is one of the things that makes most corporations places of misery, suffering and oppression for the employees.  That level of suffering is nothing compared to the level of suffering incurred by the environment, life systems and vast majority of people on the planet as a result of this globalized corporate system.

The adolescence of my own response in this particular moment has to do with that it as a response in kind.  I am sorry.  The corporate institution is antiquated and delusional.  It is based on the premise of long sea voyages!  It is based on the assumption of tribal commerce on  a geographically and informationally separate and fragmented world.  It is based on the zero sum game thinking in which it is possible and even necessary to profit at the expense of distanced 'others' and 'enemies' at no 'cost' to the beneficiaries.  This view of the world is so delusional, that it does not even have the capacity to recognize itself as delusional.  It is not in any way based on the condition in which we now find ourselves.

$1 triiiiiillllion + in resources.  Amazing!  Roughly the cost of the past 8 years of war!  Schwoo...  You know, I was actually concerned for a moment that we might lose money on the war, but it turns out to have been an excellent investment.  Here are some things I would like to correlate, but am not sure I can get the information and may not have the patience or emotional stamina.  Is there a correlation between troop movements and resource rich areas?  The rhetoric at the moment is that the US cannot abandon the war effort because it has 'cleared' certain areas.  Cleared of what exactly?  Clear for what exactly?  Enemies, presumably, as if it were a room that could be 'secured' or something.  Is there a correlation between the 'discovery' and the refunding of the war?

The negative arguments about the Taliban may all be true.  As a basis for US involvement there, they are not.  This is simple and oft said.  Why isn't  the US active elsewhere at the same scale, for instance?  It is a contradiction.  What does it reveal?  It is not the popularized and propagandized moral rhetoric.   "Follow the money," Gertrude Stein.

Afghanistan is not about moral outrage having to do with women.  It is not about the Taliban or human rights.  It is not about bin Laden, in practice.  bin Laden, is not even about bin Laden in practice.  As with most of US war efforts it is about the exploitation of resources, primarily through the creation of debtor nation states.  'Cleared' ground has to do with that agenda and its associated political agendas.  It is a metaphor of pre-development.

The $1 triiiiiiiiillllllion worth of resources are viewed as a recent 'discovery,' heralded by a clearly non-bias source in 2010: the Pentagon..  However, the World Bank was drafting mining laws for Afghanistan in 2005 (2005 Afghan Mining Law).  Such mining laws, while giving nation-states apparent ownership of mineral rights, are designed to encourage the globalized development of and corporate profit from such resources.  So, of course, the scale of the resources was fairly well known.  Why then the 2010 announcement of resources in Afghanistan that also just happens to cover the entire economic cost of 8 years of continuous war and aggression?  The resource assessments do not seem to explicitly cover lithium, which is abundant in Afghanistan and an ingredient for transition to solar, electric cars and such.

Of course this is all preferable to the previous national export, which is heroine, but reading the law you can see how it is likely to work out, if implemented as intended, creating another conquered debtor state to the globalized economy and US agenda... or Chinese agenda of consumption and profit.  (Incidentally, the GDP of Afghanistan is the same size as the J.P. Morgan bailout, which bailout no doubt allows the Chairman to fly to Afghanistan on one of their new jets to participate in a military supported resource junket.)

Is it a potential conflict with China?  Not for JP Morgan.  Consider this full page Wall Street Journal ad placed as an investor protest here.

I don't know.  I have to say as I research this I move back and forth between states of indignation and heartbreak.  I recognize that this is neither useful nor particularly mature.  As I was researching the Afghani mineral laws I also started researching the Conflict Minerals Law that was passed last year (and is still being worked over by the SEC) that applies to the Congo.  The conflict in the Congo is a history of atrocity.  One of the things I ran across was the systematic extermination of the Mbuti people.  They have been hunted and eaten based on the belief that they are subhuman and that eating them conveys special powers.  The Mbuti are one of the more socially mature people on the planet, it seems to me.  I know this is counter intuitive to the modern mind.  They seem 'primitive' to the mind of the industrial era, which is to say 'subhuman' in a different way.  They are a people who did not make nor live the assumption that the planet was a hostile place out to get them, which is one of the basic assumptions of the industrialized world.  There are many stories of the inner workings of the social dynamics that demonstrate the remarkable social maturity of the Mbuti as a people.  They are stories of peaceful conflict resolution.  There is a very high probability that the coal fired computational device upon which I am writing this, a product of the industrial 'civilization,' contains conflict minerals.  It is therefore the case that my writing this is also a participation in systematic extermination of the Mbuti, not to mention systematic child abduction, drug addiction and rape that typifies the conflict in the Congo - each email, each phone call, every piece of music listened to...

We are institutionally possessed of a certain genius for rationalizing away contact with such realities, regardless of the increasingly delusional nature of such rationalizations.  We are possessed of the capacity to strategically ignore or minimize the effects of the 'way of life' in 'developed' economies.  What is much more difficult is to simply stay in contact with the felt reality of these conditions in a way that effects our day to day lives and choices.


  1. I am thinking about unconditional positive regard for people and that people make up corporations (for what other structure is there but a human created one?), so where does the evil come from. This I am wondering. I feel your anger and hurt.....

  2. Hi Liz- I wrote you a long response and my comp ate it.

    I will summarize. :) I feel 'evil' is the ultimate conspiracy theory.

    I also wrote a lot about mapping and delusion and such things, but I have written that elsewhere I think.

    Thanks for your comment... and if you actually read this entire thing... well you have my compassion as well. -roger

  3. the "evil" computer ate it......
    No need for compassion, your blog is an excellent distraction from grading
    But, I am not sure I got a adequate response to my question. Maybe we can talk about it over yogurt.....soon.

  4. I enjoy the insight and the references. The last bit inspired a thought!

    A good friend of mine said once that it is hard not to be a hypocrite in the 21st century. By '21st century' I believe he may equally mean the industrialized century to which you prefer. Last week I realized that my organic, vegetarian diet was probably futile when the produce I'm buying is fertilized by bone meal and fish emulsions! While ostensibly recycling a 'waste product' of the meat trade, the economics of participating in this waste product probably have some consequence in supporting the trade.

    I'm sure hypocrisy is a timeless affliction. It is getting easier of late! However, localization does seem to be a good response, since there are fewer surprises when life-support processes and our actions are more fully and directly perceived.

  5. Hi Greg- thank you for the insight. I think that is right about localization, though there is so much survival based, scarcity based rhetoric and associated infrastructure about the need for economy of scale, globalization, industrial scale ag, etc.

    I know you have been really creative and active in organizing your own life at a transparent local scale. You are an inspiration in this way.