Congratulations are in order to JPMorgan Chase, the largest bank in the United States. It just reported that in the first quarter of 2019 it made a record profit of $9.18 billion on $29.9 billion in revenue. Truly, we are living in an age of boundless prosperity.
Well, some of us are. Jamie Dimon, the CEO of JPMorgan Chase, made $31 million last year. Which led to an interesting exchange between him and first-term Rep. Katie Porter (D-Calif.) this week in a Capitol Hill hearing, when Porter asked Dimon to consider the financial situation of a teller working at Dimon’s bank in Irvine, Calif., the location of her district.
A video of Porter questioning Dimon is spreading, and it’s an excellent reminder of something with profound implications for next year’s presidential campaign:
Porter is uniquely situated to do this kind of questioning. A law professor with deep expertise in topics such as bankruptcy, she is quickly becoming one of the financial services industry’s most formidable critics on Capitol Hill. And she was doing more than making Dimon uncomfortable. She was obviously trying to make a larger point not just about JPMorgan Chase or even just about the banking industry, but about the American economy in general.
That point is this: If you have a bank that's making $9 billion in profit in a single quarter, with a CEO who makes $31 million a year, and yet people who work for that bank can't possibly make ends meet, something is very, very wrong. And that should be at the center of the campaign of every Democrat running for president.
A lot of people look at the presidential campaign and say, “Well, if the economy stays strong, then Donald Trump is in a good position to be reelected, but if it turns down, then he’s in big trouble.” But that’s a far too simplistic way to look at what the situation in the United States is today. The question isn’t whether the economy is good or bad; it’s whom the economy is really serving.
It’s true that in many places, virtually anyone who wants a job can find one, and unemployment is what we tend to focus on when we ask how the economy is doing. But as we all know, it’s not just about whether you have a job. It’s about whether that job actually provides economic security. And the fact is that the United States has become profoundly unequal, with a small number of corporations and individuals sucking up most of the country’s wealth while everyone else struggles.
Americans know this — you don’t have to convince them. It’s one of the reasons that the most consistently popular proposal on taxes is to raise them on the rich and corporations.
Democrats largely agree on the broad contours of how to solve this problem. The first part of the solution is to beef up the social supports that now take so much of what Americans earn. If we had universal health coverage and universal child care, it would be far easier for the non-rich to make ends meet.
The second part of the solution is to reorient laws and regulations so that they aren’t built to benefit the wealthy and powerful at everyone else’s expense. That includes tighter regulation of Wall Street, rules that prevent exploitation of workers, a higher minimum wage, and many other things.
While Democrats might have important differences on what the particulars should be, they all pretty much agree on that basic approach. They all opposed the 2017 Republican tax cut, and most would like to see some higher taxes on the wealthy.
Speaking of which, we just learned that as a result of that tax cut, twice as many of the largest corporations in the United States paid no taxes in 2018 as had the year before, despite making billions of dollars in profit. In many cases they even got large refunds, which means your taxes went right into their bank accounts. To take just one example, Chevron made a $4.5 billion profit and got a refund of $181 million. The banks did particularly well; the tax law increased bank profits by $28.8 billion. You’re welcome, Mr. Dimon.
Now let’s consider the politics of this issue. When Donald Trump ran for president in 2016, he told voters that the system was “rigged,” and many people, particularly in areas of the country that have been struggling, agreed with him. They looked around at communities where the factories that offered secure, well-paid jobs are gone (though you can get a job at Walmart), where the schools are underfunded, where infrastructure is crumbling, where opioid abuse is rampant, and they said, yes, this system is rigged.
Of course, everything Trump has done in office has only made the system more rigged. But if Democrats really want to "reach out" to people who voted for him but might be open to switching in 2020, this is the best place to start the conversation, to make a case to them that we need to make deep structural changes to the economy if we want to unrig it.
And the nice thing about that argument is that it simultaneously appeals to those marginal voters Democrats would like to persuade and to the base voters Democrats want to mobilize. Not only that, Republicans have no answer apart from "No, everything is fine. We just need more tax cuts." That's because they simply don't think inequality is a problem.
JPMorgan Chase could give every one of its 250,000 employees a $25,000 raise, and it would cost the bank only about two-thirds of the profit it made just in the first quarter of this year. But of course, it is not going to do that. We can’t rely on the generosity of corporations to tackle inequality. That’s the government’s job. Democrats just need to decide to do it, and to make clear to voters that it will be their top priority as president.