For 15 years, Jamie Dimon has used a prop—a single-page, comically complex flowchart of regulations he calls a "spaghetti chart"—in meetings with regulators and officials. This theatrical tool is part of his successful, long-term campaign against banking regulations.
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In heavily regulated or legally ambiguous industries, a founder's most valuable asset can be political connections. One startup literally used a pitch deck slide showing its co-founder with prominent politicians to signal their ability to influence future legislation in their favor. This represents a stark, real-world "crony capitalism" business strategy.
When facing government pressure for deals that border on state capitalism, a single CEO gains little by taking a principled stand. Resisting alone will likely lead to their company being punished while competitors comply. The pragmatic move is to play along to ensure long-term survival, despite potential negative effects for the broader economy.
Maja Vujinovic posits that Gary Gensler, despite his pro-crypto past, was strategically positioned by banks to slow innovation. This regulatory friction gave traditional financial institutions the necessary time to understand the technology and formulate their own digital asset strategies before competing.
Morgan Stanley's 1935 founding was a direct consequence of the Glass-Steagall Act, which forced a separation between commercial banking (deposits, loans) and investment banking (trading, underwriting). This regulatory mandate created the specialized firms that define the structure of modern finance today.
The financial industry uses jargon and complexity to obscure its actions. A "trillion-dollar coin" is easily understood and mocked, while "premium bonds" achieve the same outcome but are too opaque for public debate. This shows how financial instruments are naturally selected for their ability to confuse.
Regulatory capture is not an abstract problem. It has tangible negative consequences for everyday consumers, such as the elimination of free checking accounts after the Dodd-Frank Act was passed, or rules preventing physicians from opening new hospitals, which stifles competition and drives up costs.
The Glass-Steagall Act, famed for separating commercial and investment banking, wasn't purely a consumer protection measure. A key motivation was rival banks, like those run by the Rockefellers, lobbying to break up the dominant J.P. Morgan, revealing a backstory of corporate warfare.
Instead of following trends, JPMorgan's CEO is using a massive investment in a hyper-amenitized headquarters to actively pull the corporate world back to in-office work. This building acts as a 3-billion-dollar argument that the physical office is the future, influencing other leaders who are uncertain about remote work.
While the Dodd-Frank Act successfully bolstered regulated banks, it pushed systemic risk into less visible parts of the financial system like crypto. The challenge has transformed from managing institutions that are 'too big to fail' to identifying risks in areas that are 'too small to see' and outside the regulatory perimeter.
The financial system is made intentionally complex not by accident, but as a method of control. This complexity prevents the average person from understanding how the system is rigged against them, making them easier to manipulate and ensuring they won't take action to protect their own interests.
