What Successful Corruption Looks Like

So JPMorgan Chase announced its 2010 profits: $17.37 billion, which is 40% higher than in 2009.

The New York Times reports the details of the announcement, getting into its trademarked Panting Lap-Dog Mode. But even amid all the breathlessness, one paragraph leapt out:

The solid results show how JPMorgan has emerged from the bailout era as one of the nation’s most powerful banks and seems poised to take further advantage of its position as the economy rebounds. Indeed, 2010 was the most profitable year in the history of JPMorgan, surpassing its earnings even at the height of the boom.

This is what successful corruption looks like. 

See, the “bailout era” hasn’t ended—not by a country mile: The Federal Reserve is still lending the TBTF money at 0.25%, and the banks are still turning around and lending it to the Treasury at 2.5% yields in the stealth monetization shell game—essentially, the TBTF banks’ profits are the fees the Treasury and the Federal Reserve are paying the banks so as to maintain the illusion that they are not monetizing the Federal deficit. 

That’s just the help they’re getting today. This doesn’t even include the help they got in the past. 

JPMorgan Chase, of course, not only was bailed out by both the Treasury (via TARP) and the Federal Reserve (via free loans for the past two years), but it was also able to acquire Bear Stearns’ business for a song ($240 million in March 2008), as well as Washington Mutual ($1.84 billion in September 2008). 

To add insult to injury, JPMorgan’s acquisition of those two firms was backed by the Federal government as well as by the Federal Reserve—so it wasn’t that JPMorgan was “saving” the U.S. banking sector: They were the beards for the Federal government’s bailout of those two firms, and thereby profited from the deals. 

And if that wasn’t bad enough, we have to remember that, since March of 2009, the accounting rules have been suspended, when it comes to JPMorgan Chase: As everyone knows, the Financial Accounting Standard Board (FASB) rules were suspended in 2009, in order to provide the Too Big To Fail banks with the illusion of solvency. 

JPMorgan’s Friday results were merely the first to come out—the other banksters will report 2010 earnings next week. And the results of those banks are likely to be as stellar ast JPMorgan’s. 

So as the rest of the economy goes down the tubes, the banksters will report profits as far as the eye can see. And this means only one thing: Corruption pays. 

Does this picture look right to you?