Arab Press

بالشعب و للشعب
Friday, Apr 26, 2024

Jamie Dimon sounds the alarm on the future of American prosperity

Jamie Dimon sounds the alarm on the future of American prosperity

Jamie Dimon is very bullish on the US economic recovery from the pandemic. And yet the JPMorgan Chase CEO is deeply concerned about the future of America.

In his annual shareholder letter Wednesday, Dimon wrote that the Covid-19 pandemic, the "horrific murder" of George Floyd and the painfully slow economic growth of the past two decades are all symptoms of a broader problem: "inept" public policy and broad government dysfunction.

"Unfortunately, the tragedies of this past year are only the tip of the iceberg — they merely expose enormous failures that have existed for decades and have been deeply damaging to America," Dimon wrote, adding that the nation was "totally unprepared" for the deadly pandemic.

Dimon, one of the leaders of Corporate America and Wall Street, sounds the alarm on the future of American prosperity in the 66-page letter, which represents his most expansive comments to date on policy. He notes that America has faced tough times before — including the Civil War, World War I, the Great Depression and World War II.

"In each case, America's might and resiliency strengthened our position in the world, particularly in relation to our major international competitors," Dimon said. "This time may be different."

In other words, America's rivals, most notably China, could use this moment to catch up.

Don't assume the problems will go away


In a phone interview with CNN Business, Dimon urged the nation to take this moment seriously.

"Are we at a crossroads? I don't know, but I would treat it like one," he said. "The better strategy in life is to assume it is and fix it, rather than assume it will go away."

Dimon suggested the first step is for America to admit it has serious problems.

"Even in business, you don't fix things if you don't recognize you have a problem," Dimon told CNN Business. "We are in a position where we could do a great job — or continue to just muddle through and then we'll all be blaming each other."

Dimon's letter, which includes a roadmap for how to get America back on track, comes as business leaders face pressure to provide moral leadership on major issues, ranging from climate change and voting rights to inequality.

Corporate America's willingness to engage on Georgia's controversial voting law led Senate Minority Leader Mitch McConnell to warn of repercussions and former President Donald Trump to call for a boycott of major American brands, including JPMorgan.

'Broken policy'


In his shareholder letter, Dimon wrote that America is "clearly under a lot of stress and strain" from various events, including the pandemic, racial unrest, the rise of China and "the divisive 2020 presidential election, culminating in the storming of the Capitol and the attempt to disrupt our democracy."

The JPMorgan (JPM) CEO wrote that China sees an America that is losing ground in technology, infrastructure and education and a nation "torn and crippled by politics," racial and income inequality and unable to coordinate government policies in a coherent way to accomplish goals.

"Unfortunately, recently, there is a lot of truth to this," Dimon said. "Perhaps we were lulled into a false sense of security and complacency in the last two decades of the 20th century as we enjoyed relative peace in the world and a position of global dominance, validated by the fall of the Soviet Union."

Dimon suggested that many of America's problems are self-inflicted and the result of extreme polarization and "broken policy."

"Politics is increasingly divisive, and government is increasingly dysfunctional, leading to a number of policies that simply don't work," Dimon wrote. "The fault line is inequality. And its cause is staring us in the face: our own failure to move beyond our differences and self-interest and act for the greater good."

Dimon: This economic boom could run into 2023


The good news is that Dimon thinks these problems are fixable and he's upbeat on the economic recovery from the pandemic.

"I have little doubt that with excess savings, new stimulus savings, huge deficit spending, more QE [quantitative easing], a new potential infrastructure bill, a successful vaccine and euphoria around the end of the pandemic, the US economy will likely boom," Dimon wrote. "This boom could easily run into 2023 because all the spending could extend well into 2023."

Asked by CNN Business when the last time was that he felt this optimistic about the US economy, Dimon said, "not for a long time."

"The circumstances are quite good, though some people are still being left behind. And we're coming out of COVID, thank God," he said.

The coming economic boom is "good for everybody ultimately," Dimon said, "but it doesn't fix all of our problems."

Dysfunction is slowing down the economy


Those problems, according to Dimon's letter, include inequality in the nation's education system, a costly litigation and regulatory system, "terrible" infrastructure planning, wasteful spending, ineffective immigration policies and "poorly designed" social safety nets.

"It is hard to look at these issues in their totality and not conclude that they have a significant negative effect on the great American economic engine," Dimon said, adding that the "dysfunction" could easily have been a 1% drag on the nation's economic growth rate.

Dimon laid out a series of what he sees as root causes for America's issues, including short-term thinking, an overreliance on economic models, media hype and partisan politics.

"Our problems are complex and frustrating — but they are fixable with hard work," Dimon wrote.

He laid out 15 policies leaders should focus on, including improved wages for low-skilled work, training for jobs, making it easier for those with a criminal record to get a job, better fiscal and tax policy, reforming social safety net programs, reviewing regulatory red tape, modernizing infrastructure, intelligent industrial policy and proper immigration policies.

'We do not have a divine right to success'


In the end, Dimon argued that healthy economic growth "may be the only way out of our current situation" of slow income growth and rapidly rising debt.

If the US economy grew at 3% instead of 2% over a 10-year period, that would lead to $2.3 trillion in additional GDP by the end of the decade, translating to an average increase in household income of about $18,000, according to JPMorgan.

"A 3% growth rate is what we used to have — and it is achievable again," he wrote.

Dimon urged America to roll up its sleeves and address its myriad of problems — before it's too late.

"While I have a deep and abiding faith in the United States of America and its extraordinary resiliency and capabilities, we do not have a divine right to success," he wrote. "Our challenges are significant, and we should not assume they will take care of themselves."

Newsletter

Related Articles

Arab Press
0:00
0:00
Close
China Criticizes US for Vetoing UN Ceasefire Resolution in Gaza
Saudi Arabia ranks first in UN index for e-government services in MENA
Israel Records 20% Drop In GDP, War In Gaza Is The Reason
Saudi Arabia's FDI Inflows Grow with New International Standards
Venture Capitals Power Up Across MENA Region
PM Modi Announces Opening Of New CBSE Office In Dubai
January Funding for MENA Startups Totals $86.5 Million
Saudi Arabia accelerates digital economy growth through Nvidia partnership
Israel unveils tunnels underneath Gaza City headquarters of UN agency for Palestinian refugees
Israel deploys new military AI in Gaza war
Egypt threatens to suspend key peace treaty if Israel pushes into Gaza border town, officials say
Saudi Arabia Warns Of A "Humanitarian Catastrophe" If Israel Moves On Rafah
US University To Shut Qatar Campus Due To "Heightened Mideast Instability"
Facebook and Instagram Ban Iran's Supreme Leader
Defense Technology Showcase Held in Riyadh
Saudi Arabia’s non-oil exports rise 2.5% to $6bn in November 2023: GASTAT
Rolls-Royce Executive Encourages Saudi Women to Tap into Their Inner 'Superhero' for Success in Defense Industry
Saudi Arabia launches National Academy of Vehicles and Cars
Saudi Tourism Minister Reveals Plan for 250,000 New Hotel Rooms by 2030
SAR to more than double eastern network passenger capacity with new trains deal
Saudi Arabia Enhances National Defense with New Partnerships
Saudi Aramco Maintains Arab Light Crude Pricing to Asia for March
NEOM Establishes New York Office to Support Investors
Saudi Wealth Fund Draws in Over $25 Billion Worth of Investments in Three Years, Al-Rumayyan Reveals
The Saudi Kingdom's Ultimatum to Israel: A Win-Win Peace with Saudi Arabia and the Arab World, or a Lose-Lose Continued Occupation and Endless Conflict
Biden condemns anti-Arab hate after WSJ opinion piece calls Dearborn ‘jihad capital’
Turkey Releases Seven Hostages Captured by Pro-Gaza Gunman
Arab Parliament Commends Women's Contributions to Societal Development
British and Hungarian Foreign Ministers visited Lebanese leaders to stress the importance of enacting UN Resolution 1701
Yemen's Houthis Say They Targeted British Merchant Vessel In Red Sea
Donald Trump Nominated for Nobel Peace Prize for 'Historic' Middle East Policy
US lawmakers approve F-16 jet sale to Turkey following NATO expansion support
Saudi Arabia Climbs 25 Places in World Bank's National Statistics Indicator
Tourism Growth in Saudi Arabia Fuels Advancements in the Hospitality Industry," Says Rotana Official
Houthi Rebels Request Departure of UN Staff from Yemen, Including US and UK Personnel, within a Month
Modi Inaugurates Hindu Temple on Site of Demolished Mosque in India
Over 25,000 Deaths in Gaza Amid Israeli Offensive
Escalating Clashes in Gaza as Israel Distributes Leaflets to Assist in Locating Hostages
Turkey's First Astronaut Set to Launch for International Space Station Today
Head of Palestinian Investment Fund Warns More People May Die of Hunger Than War in Gaza
Palestinian Envoy Criticizes UK for Alleged 'Double Standards' in Policies Toward Israel
Morocco to Lead UN Human Rights Council in 2024
Is artificial intelligence the solution to cyber security threats?
Egypt has been identified as the leading military force among Arab nations and ranks 15th globally
The AI Revolution in the Workforce: CEOs at Davos Predict Major Job Cuts in 2024
Iranian Nobel Laureate Narges Mohammadi Receives Additional Prison Sentence
"Gazans Urge Israeli Forces to Target Hamas in Leaked Audio"
Biden States US and UK Airstrikes on Houthis Were a 'Defensive Action
Large Pro-Palestine Rally in London as Gaza Conflict Hits Day 100
South Africa Urges World Court to Halt Israeli Actions in Gaza
×