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AOC and Wall St. CEOs to face off in what will be the stuff of high drama

Andy Serwer with Max Zahn
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Who do you think would win in a smackdown between Jamie Dimon and Alexandria Ocasio-Cortez?

We’re set find out Wednesday morning, when CEOs of the nation’s largest banks CEOs — headlined by the JPMorgan Chase (^JPM) CEO — testify before the House Committee on Financial Services. That committee’s star member is Ocasio-Cortez, the 29-year-old Democratic Socialist known as AOC.

On the face of it this is merely a hearing where bank CEOs are questioned about the state of their business by members of a Congressional committee. But of course there’s much more to it than that.

In fact, it’s sure to be the stuff of high drama for any number of reasons, most notably because high-profile partisans in this most public of forums will essentially be debating the merits of capitalism versus socialism in our society. It doesn’t get any bigger than that.

The hearings will be must-see streaming because the parrying between the executives and the lawmakers is sure to be super-charged — never mind reflective of very different perspectives of business and our society. So the debate will be important for its own sake and because it will be emblematic.

Source: Yahoo Finance
Source: Yahoo Finance

Let me now introduce the participants: Besides the aforementioned Dimon, we have a murderers row of bankers including Michael Corbat, CEO of Citigroup, James Gorman, CEO of Morgan Stanley, Brian Moynihan, CEO of Bank of America, Ronald P. O’Hanley, CEO of State Street, Charles Scharf, CEO of Bank of New York Mellon, and last but not least, David M. Solomon, CEO of Goldman Sachs.

It will make for quite the photo op, no?

As far as the Congressional Committee goes, there are 60 members including 34 Democrats and 26 Republicans. Notable representatives include committee chair Maxine Waters, presidential candidate Tulsi Gabbard of Hawaii, high profile first-termer Rashida Tlaib of Michigan, and of course congressional rockstar, AOC.

White male CEOs versus diverse female lawmakers

Note that all the CEOs are men, with conservative to centrist politics, while the committee members I just named are women with liberal to socialist (there’s that word again) agendas. In fact of the 14 women on the committee, only one is a Republican, (Ann Wagner, of Missouri).

In this Feb. 27, 2019, photo, Rep. Alexandria Ocasio-Cortez, D-N.Y., listens to questioning of Michael Cohen on Capitol Hill in Washington. Ocasio-Cortez and several of her allies were accused this week by a conservative group of improperly masking political spending during the 2018 campaign. (AP Photo/J. Scott Applewhite)
In this Feb. 27, 2019, photo, Rep. Alexandria Ocasio-Cortez, D-N.Y., listens to questioning of Michael Cohen on Capitol Hill in Washington. Ocasio-Cortez and several of her allies were accused this week by a conservative group of improperly masking political spending during the 2018 campaign. (AP Photo/J. Scott Applewhite)

So here’s another dynamic: White male CEOs versus diverse female lawmakers. No doubt the CEOs will be on the defensive. It would behoove them to stay calm and acknowledge they made mistakes, which they may be loath to do. Note that just last month Tim Sloan, then CEO of Wells Fargo, was grilled by the same committee. AOC asked Sloan about Wells lending to for-profit prisons, including detention centers at the border: “Why was the bank involved in the caging of children and financing the caging of children…” Two weeks later Sloan resigned.

Also note the name of the hearing: “Holding Megabanks Accountable: A Review of Global Systemically Important Banks 10 years after the Financial Crisis.” Let’s just say that wasn’t written by Goldman Sachs’s PR team.

An advisory from Maxine Waters lays out the line of questioning the committee intends to pursue, i.e., asking the CEOs about their banks’ record profits, fines paid by the banks, and CEO compensation. The advisory notes that these institutions made $780 billion in profits over the last 10 years while paying at least $167 billion in fines, with tens of millions of dollars in compensation going to the CEOs. In other words, this could get a little bit fiery.

Congresswoman Maxine Waters addresses the audience at the 'Ain't I a Woman?' Sojourner Truth lunch, during the three-day Women's Convention at Cobo Center in Detroit, Michigan, U.S., October 28, 2017. REUTERS/Rebecca Cook?
Congresswoman Maxine Waters addresses the audience at the 'Ain't I a Woman?' Sojourner Truth lunch, during the three-day Women's Convention at Cobo Center in Detroit, Michigan, U.S., October 28, 2017. REUTERS/Rebecca Cook?

As for Jamie Dimon, I single him out because he has been much more public about his views on broader social issues; in speeches, interviews and in his shareholder letters. While Dimon defends a mixture of social programs and capitalism, pure socialism is a no no in his mind. In this year’s annual letter to shareholders, Dimon wrote: “Socialism inevitably produces stagnation, corruption and often worse — such as authoritarian government officials who often have an increasing ability to interfere with both the economy and individual lives — which they frequently do to maintain power. This would be as much a disaster for our country as it has been in the other places it’s been tried.” It will be interesting to see if Ocasio-Cortez, a member of the Democrastic Socialists of America (along with Rashida Tlaib), takes him on.

To my mind though, this whole capitalism versus socialism drama has been way overblown and used by both Republicans and Democrats to further their agendas. The truth is most people in the United States, (including Jamie Dimon as noted above), recognize that unfettered capitalism won’t work. And by the same token, our nation has rejected deep dives into socialism. The words “capitalism” and “socialism” are used nowadays as trigger words to both rally and instill fear.

It would be amazing—though unlikely—if the CEOs and the representatives took it upon themselves to lead by example and find some common ground on Wednesday, instead of grandstanding for the cameras. Unfortunately all I’m expecting is a spectacle, not leadership.

Andy Serwer is editor-in-chief of Yahoo Finance.

Read more:

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