Jamie Dimon’s ‘Biggest Disaster’ Is Waiting

By Simon Johnson - Feb 16, 2011

Bloomberg Opinion

Jamie Dimon, chief executive officer of JPMorgan Chase & Co., has harsh words for Fannie Mae and Freddie Mac. They are “the biggest disasters of all time,” Dimon told the Financial Crisis Inquiry Commission last fall, according to his just-released interview.

Along with others, Dimon greatly exaggerates the role Fannie and Freddie played in the financial crisis, a theme my MIT colleague, Daron Acemoglu, has written about with great clarity.

Too many bankers assert some version of the refrain: Fannie Mae made me do it. As the FCIC’s report makes clear, it was the private sector that led us into the financial crisis by making massive subprime bets and then using complex derivatives deals to magnify the downside risks.