Earlier this month, the nation's largest bank, JPMorgan Chase, reported that it lost over $2 billion in trading and has brought financial regulation back to the debate stage. While the majority of economists believe that more regulation would have prevented such a loss from happening, Fox News has decided to echo the words of many bank executives and blame too much regulation.
While JP Morgan Chase lost $2 billion of its money through trading, conventional wisdom could see that a greater oversight could have prevented the debacle. With the repeal of the Glass-Steagall Act in 1999, which separated commercial banks and investment banks, the chance of risk on the marketplace increased. Less than a decade later, the economy crashed with deregulation being one of the major factors in the downfall. With the passing of the Dodd-Frank Wall Street Reform and Consumer Protection Act in 2010, some necessary regulations were put back in place including having banks create a "funeral fund" in case they need to shut down, preventing the need for another taxpayer bail out. One of the biggest parts of the bill was the creation of the Consumer Financial Protection Bureau, which works with large banks to prevent harm to the consumer like risky lending.
With the new regulations put into place, many economics still believe that the laws don't go far enough. With obstruction in congress, the law had to be watered down enough to pass. While JP Morgan Chief Executive, Jamie Dimon, argues that too much regulation has made it difficult for banks to operate, he can find comfort in that Fox News shares the same opinion.
As Media Matters has pointed out, Fox News host, Neil Cavuto, recently interviewed Jim LaCamp of Macro Portfolio Advisors and they both agreed that the regulations put in place by the government on banks helped cause JP Morgan Chase to lose their money.
LaCamp: Yeah. I mean the last thing we need is another big bill, another new piece of regulation. They need to fix the one they have. They don't even understand the one they have. This administration has a history of putting together big bills with lots of news clips that put vague powers in the hands of unnamed regulators.
Cavuto responded with his agreement and the blame game continued.
Cavuto: Alright. We have plenty of legislation and new rules that kicked in with Dodd-Frank, the new financial law that was suppose to, among other things, address errant or wild trading as it's known, one of the features that led to this JPMorgan fiasco. It gets kind of in the weeds, and I want to step out of that and just look at the swamp here. And the swamp is a very, very expensive and regulatory-laden law that didn't work.
LaCamp: It didn't work at all, and they really just didn't define anything very clearly at all. Again, a lot of the rules that are in play, put in place by Dodd-Frank put really vague powers in the hands of unnamed regulators.
Fox News has a well documented history with conservative bias and their allegiance with unregulated capitalism is far from a secret. While the idea of capitalism sounds good in theory, if it's not watched over properly, big problems will emerge. Fox News and the greedy barons on wall street promote an agenda that continues the wealth disparity in the United States and until full Wall Street and bank reform is enacted, the income gap will only continue to widen.
