The billion-dollar losses at JPMorgan Chase could take some of the sting out of President Barack Obama’s attacks on Mitt Romney over Wall Street excess. But will Romney use JPMorgan as a campaign issue?
So far, the Obama and Romney camps have made muted remarks about JPMorgan’s staggering losses after a series of trades made by the "London Whale” left the investment firm in the hole--by at least $2 billion.
JPMorgan has the capacity to absorb such a loss, but the news triggered hearings in Washington about the matter, and fears that Wall Street firms that are “too big to fail” could become a campaign issue again.
Back in 2008, Obama ran for president partly as a Wall Street reformer, and his recent campaign ads portray Romney as a Wall Street raider.
In one ad (see below), steel workers talk about how Romney’s former firm, Bain Capital, shut down their plant and left them jobless. One former worker compared Bain to a vampire.
Romney’s campaign quickly pointed out those actions happened two years after he left Bain.
A bigger issue for the Obama campaign could be what to do about JPMorgan if it reports steeper losses and the investigations in Washington pick up steam.
In an appearance this week on “The View,” Obama repeated his confidence in JPMorgan CEO Jamie Dimon.
"JPMorgan is one of the best-managed banks there is," Obama said. "Jamie Dimon, the head of it, is one of the smartest bankers we got, and they still lost $2 billion and counting."
That led Obama’s critics to re-examine the president’s relationship with Dimon, and digging up the fact that Obama has between $500,000 and $1 million in a JPMorgan Chase checking account.
The same form also shows that Obama has between $1 million and $5 million in Treasury notes, but there was little talk about the president’s relationship with the Treasury Department.
But missing among the critics of JPMorgan and Dimon was Mitt Romney.
Romney gave an interview with blogger Ed Morrissey, where he said JPMorgan is already paying a price for making bad business decisions.
“This was a loss to shareholders and owners of JPMorgan and that’s the way America works. Some people experienced a loss in this case because of a bad decision. By the way, there was someone who made a gain. The $2 billion JPMorgan lost someone else gained,” Romney said.
What remains to be seen is if--or when--the Romney campaign can use the JPMorgan situation, in a way that attacks Obama but doesn’t undermine the GOP’s stance on Wall Street.
But the New York Times now says the loss at JPMorgan stands at $3 billion, and Dimon said last week the total loss could double in the long term.
Scott Bomboy is the editor-in-chief of Constitution Daily.