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Jamie Dimon's Best Friend: Elizabeth Warren

NEW YORK ( TheStreet) -- JPMorgan Chase (JPM - Get Report) chief Jamie Dimon has grabbed headlines this week complaining about excessive regulation, but maybe he just doesn't know what's good for him.

In the wake of the crisis, Dimon has emerged as the most pugnacious banking industry CEO, and not without justification. Unlike Bank of America (BAC - Get Report) and Citigroup (C - Get Report) which received exceptionally large bailouts, or Wachovia which essentially imploded ahead of its acquisition by Wells Fargo (WFC - Get Report), JPMorgan was relatively careful not to load up its balance sheet with too many risky loans.
Jamie Dimon, CEO of JPMorgan

Dimon's latest criticism of excessive regulation came Tuesday in an exchange with Federal Reserve Chairman Ben Bernanke during a banking industry conference in Atlanta.

"I have a great fear someone's going to try to write a book in 20 years, and the book is going to talk about all the things we did in the middle of the crisis to actually slow down recovery," Dimon told Bernanke, according to a rough transcript of the exchange provided by JPMorgan.

But history has shown that while business can generally be counted on to push back against regulations, in many instances regulations end up boosting economic activity.

Dan Carpenter, the Freed Professor of Government at Harvard University, says the pharmaceutical industry has benefitted enormously from tighter regulation.

"The Food Drug and Cosmetic Act in 1938 was greeted by a lot of these same claims--that you were going to retard pharmaceutical innovation, you were going to retard science and economic progress, and yet the major strides in the development of the modern pharmaceutical industry came after the Federal government had gatekeeping power over the pharmaceutical marketplace--not before," Carpenter says.

Another example of regulation boosting economic activity can be found in research by MIT professor Michael Greenstone, which showed the Clean Air Act Amendments of 1970, while leading to the loss of about 100,000 manufacturing jobs, added $45 billion to property values.

An article in this week's issue of The New Yorker magazine makes the case that the Consumer Financial Protection Bureau (CFPB) could perform a similar service for the banking industry by making consumers more comfortable about banks. Harvard Professor Elizabeth Warren, who has been credited with coming up with the idea for the agency and who many Democrats in Congress would like to see appointed as its head when it opens its doors July 21, has met with fierce opposition from many Congressional Republicans, however.
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