Dimon Warns ‘Something Is Wrong’ With the U.S.By
Annual letter offers detailed assessment of economic problems
‘It is understandable why so many are angry,’ Dimon writes
JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon has two big pronouncements as the Trump administration starts reshaping the government: “The United States of America is truly an exceptional country,” and “it is clear that something is wrong.”
Dimon, leader of world’s most valuable bank and a counselor to the new president, used his 45-page annual letter to shareholders on Tuesday to list ways America is stronger than ever -- before jumping into a much longer list of self-inflicted problems that he said was “upsetting” to write.
Here’s the start: Since the turn of the century, the U.S. has dumped trillions of dollars into wars, piled huge debt onto students, forced legions of foreigners to leave after getting advanced degrees, driven millions of Americans out of the workplace with felonies for sometimes minor offenses and hobbled the housing market with hastily crafted layers of rules.
Dimon, who sits on Donald Trump’s business forum aimed at boosting job growth, is renowned for his optimism and has been voicing support this year for parts of the president’s business agenda. In February, Dimon predicted the U.S. would have a bright economic future if the new administration carries out plans to overhaul taxes, rein in rules and boost infrastructure investment. In an interview last month, he credited Trump with boosting consumer and business confidence in growth, and reawakening “animal spirits.”
But on Tuesday, reasons for concern kept coming. Labor market participation is low, Dimon wrote. Inner-city schools are failing poor kids. High schools and vocational schools aren’t providing skills to get decent jobs. Infrastructure planning and spending is so anemic that the U.S. hasn’t built a major airport in more than 20 years. Corporate taxes are so onerous it’s driving capital and brains overseas. Regulation is excessive.
“It is understandable why so many are angry at the leaders of America’s institutions, including businesses, schools and governments,” Dimon, 61, summarized. “This can understandably lead to disenchantment with trade, globalization and even our free enterprise system, which for so many people seems not to have worked.”
Dimon’s name repeatedly came up last year as a potential Treasury secretary after Trump rode a wave of populism to win the November election. The job ultimately went to Steven Mnuchin, a former Goldman Sachs Group Inc. partner who had served as the campaign’s national finance chairman.
While Dimon’s letter marked a shift in his typical tone, he said he remains optimistic about JPMorgan’s ability to expand and profit. And the bank’s leaders have confidence in the underlying growth of the U.S. and global economies, he said.
Still, the U.S. is paying the price for bad decisions, and “something has gone awry in the public’s understanding of business and free enterprise,” he said.
“We need trust and confidence in our institutions,” he concluded. “Confidence is the ‘secret sauce’ that, without spending any money, helps the economy grow.”