Jamie Dimon on Trump, Taxes, and a U.S. Renaissance
The CEO of JPMorgan Chase talks about Detroit’s revival and his views on the incoming administration.
We’re here in Detroit to look at what JPMorgan Chase has done with a five-year commitment to invest $100 million in the city. Why is an initiative like this good business for you as well as for Detroit?
I would do it for moral reasons alone. But it is good business. We are the largest bank in Detroit. The National Bank of Detroit was started by General Motors in 1933 in the Depression when most banks were closing. That bank merged with First Chicago, Bank One, and then with JPMorgan Chase. So here we are, the largest bank in consumers, small business, middle market. We bank all the major institutions, the hospitals, the major companies here, and the government. It’s an important town for us. It’s probably one of the only towns in America that really did not have a renaissance in the 1980s, 1990s, and 2000s. So this has been a train wreck we all knew was coming for about 20 years.
It’s been two and a half years now. How have you learned to get things done?
We knew a little bit about the mayor: a white man who got elected in a mostly black community. He asked, “What do you need in Detroit?”
“We need the streetlights on.” He got them on, all 65,000.
But this mayor had this huge set of problems: “We need jobs. We need affordable housing. We need housing for commercial markets. We need training and skills.” He didn’t have one thing to focus on. He had to focus on all of them.
It doesn’t work to do one. He had to get hope back. He had to bring businesses back. He had to build affordable housing. He had to get training, get schools, get the police, the sanitation, the sidewalks. And you know, this man—with a smile—set up all these things like we would have done in business: the war room for lights, the war room for sanitation, the war room for this and that, constantly tracking it all. And it’s working.
It was because Mayor Mike Duggan—and Rick Snyder, the governor, too, by the way, one a Democrat, one a Republican—were saying, “Let’s go work to make this work for society.” And we were all in it. We didn’t just come here to throw money at it, which is easy to do and can often be wasteful.
Peter Scher, our head of corporate responsibility, asked them, “What do you need?” They needed, for example, to get rid of 70,000 blighted homes, but they didn’t know where they were. So someone came up with this idea, and we funded it: “Use your iPhones and your iPads, take a picture and geolocate every home you know.” Now, 10,000 blighted homes have been shut down. Now they can plan. You can start selling homes by mobile phone right now.
We wanted to be an accelerator. If you can start up entrepreneurs, that helps the whole community. We try to think more how venture capital helps this get going: working with the governor, the mayor, all the city, the not-for-profits here. We also had our people come. We provided data, analytics, money, advice, consulting, all the things you need to get things off the ground. It’s been a fabulous effort. And honestly, without a mayor like this, I think it would have been a total waste of time.
Is government policy not structured to actually get things done?
It shows you the worst part of public policy. You could throw money at it and, unfortunately, it took the train wreck almost to happen to bring in a mayor with a vision and leadership skills to get this done. If we help the city, it helps our business. Remember, we bank here. We need a healthy, vibrant bank. We can do it elsewhere, too, and help communities where we are. It’s good for society and obviously very good for business.
Where are the areas where it’s going a bit slower?
Everything needs to work at the same time. But what keeps society vibrant permanently is jobs, industry, business, and stuff like that. It pays for everything else. If you just build affordable housing and those people don’t have jobs, it’ll no longer be affordable soon. So you really have to build around the business community.
Is what you’re doing in Detroit replicable? Is it possible to unite on a broader scale given the extreme divisions of the country and a cast of characters in a new administration that is very different from what we’ve seen in the past?
I run one of the biggest banks in the world. And I have a good relationship with unions. I try to have a good relationship with everybody, and that’s my job to make sure we do it. I’m a little bit of an eternal optimist. People always say to me, “If you go do this and it fails, what are you going to do?” I don’t care. I’m going to give it my best shot. That’s what I’m going to do. If it doesn’t work, it doesn’t work. And I’ll try again.
Business has to have a seat at the table. Infrastructure isn’t going to be built properly if business doesn’t have a seat at the table. A school is not going to happen if businesses don’t work with schools about what kind of jobs they really need.
I’m going to oversimplify this, but what happens with infrastructure is that the Democrats say, “Spend money. Just spend money.” And, of course, we do a lot of that. A lot of people feel it just goes out to bridges to nowhere. So the Republicans are right to be questioning how the money gets spent. There are a lot of ways to do that. A lot of it, by the way, is to give it back to this mayor who knows how to do it. We don’t want Washington to tell the mayor what he needs.
There was speculation about you going into this new administration as Treasury secretary.
I don’t think I’m suited to be secretary of the Treasury. I love what I do. I’m not ready to do something else. I think I add a lot of value to America just doing what I’m doing.
As recently as September, you thought it would be difficult for people on Wall Street to get into the new administration. Now, Donald Trump has tapped several Wall Street figures. What do you think they’re going to bring that’s different?
Obviously, I was dead wrong about that. But you had a complete upheaval. The Republicans are in charge, and they have not been anti-business the way you’ve seen the Democrats largely be anti-business for years. I think if you are going to be president, you should have the best people sitting around a table. I think it’s a mistake for the American public to constantly be told that if you work for an oil company or you work for a bank, that automatically makes you bad. I think a lot of these people are very qualified people who are patriots. They’re going to want to help the country. They’re not going to try to help their former company. These are people with deep knowledge that will hopefully do a great job.
I think it’s a reset moment for how businesses are going to be treated: 145 million people work in America; 125 million of them work for private enterprise; 20 million work for government—firemen, sanitation, police, teachers. We hold them in very high regard. But you know, if you didn’t have the 125 you couldn’t pay for the other 20. Business is a huge positive element in society. But for years it’s been beaten down as if we’re terrible people. So I think it’s a good reset.
Detroit is a perfect example where civil society, not-for-profits, government, business all work together to improve the lives of American citizens. If you can duplicate what they’ve done in Detroit around the country, you’re going to have a huge renaissance.
What is your diagnosis about what’s going on in this country, this economic angst, the anti-immigrant sentiment?
It’s not anti-immigration per se. America’s changing too much for that. The core of the frustration and anger were two things. First, middle-class incomes have really not grown for 15 years. Second, the difference between unskilled and skilled has been growing over time. The unskilled really have a hard time having what you would call a living wage.
There are solutions. Skills training, like they do here in Michigan. I would also greatly expand the earned income tax credit. We only do it for mothers with babies. We don’t do it for single men. So if you’re making $8, $9 an hour, the government will pay you $3 or $4 [as part of your tax refund]. Figure it as negative income tax. If I can give you a job at a living wage, it helps small businesses. It’s not necessarily good for big business, but it’s a wonderful thing to do for society.
I think fixing corporate taxes, immigration, trade, all done properly will have fast results in America. Unfortunately, a lot of people who talk about fixing those problems, their answer is beating up on business is going to make it better. It’s not.
Let’s talk about increasing minimum wage. You believe it’s vital to growth. We now have Andy Puzder as Trump’s nominee for labor secretary. He’s been one of the staunchest opponents of raising the minimum wage.
What he said is that the government should be very careful about raising its minimum wage too high. It should be a decision made at a local level because, you know, California and New York City can afford $15, but upstate New York can’t. What he’s saying is that he’s not against states raising it thoughtfully to help people. I’m in favor of that. I would not be in favor of the federal government doing it and imposing real hardships.
But the other thing is, if your business can afford it, raise it. Share the wealth a little bit, OK? I tell people at JPMorgan I’m more worried about the pay of our lower-paid people than our higher-paid people.
And raising minimum wage will help small business. If you’re a small business that needs wages at $10 an hour to get by and you can’t afford medical—I’m not saying you’re a bad person, but that’s how you survive—then this will really help you. You’ll be able to attract better people. They’ll be paid more. You’ll probably have less attrition. And it will allow you to maybe afford more benefits over time. Raising it is just a teeny piece of it.
You’re going to be chairman of the Business Roundtable, a group that’s advising the president-elect on business policy.
Obviously, advising anyone who’s president. I’m a patriot. I’ve always offered my help. I did to President Obama. I will to President-elect Trump. What I’ve heard is he wanted it to be about jobs and growing the economy. So it’ll be specifically about that. The BRT is 192 companies, pretty much Fortune 500 or the S&P 500, but representing half of all capital expenditures in the United States. It drives a tremendous amount of growth. I think the BRT could take a very proactive approach to help solve the nation’s problems and be part of the solution. That’s why I took on the challenge.
We’re talking very specifically about the need for corporate tax reform. We are driving capital overseas every single day. And you know, I think the government made a mistake to act as if the inversion was the problem. The problem is that our tax rate is so much higher than the rest of the world and the rest of the world’s been coming down in order to stay level. Because of that, companies are leaving their money overseas. They’re reinvesting it overseas. They’re buying companies overseas. And some of that’s permanent. It’s not coming back.
So I think the only question is how much damage is done before we change it. Every study shows that reducing corporate tax rates helps lower-paid people and wages. I’m hoping the new administration can do that.
You’ve talked quite vocally about education and immigration. How are you going to spearhead those initiatives?
I think one of the greatest disgraces in this country is the fact that in a lot of inner-city schools, 50 percent of the kids don’t graduate high school. And even those kids who graduate are not necessarily job-ready. That’s a crime. That’s America at its absolute worst. We are allowing that to happen, and these kids don’t have the opportunity we all had at one point in life. We have to fix it. It’s not whether something’s free. It’s whether it ends up where you’re properly trained for a job. If you go to Germany, for example, two-thirds of the kids at 15 or 16 go to vocational school. Those vocational schools work with local businesses so the kids get a certificate that leads to a job.
In New York City there’s a school called Aviation High School. Kids travel from all over the city. They’re trained in how to maintain small aircraft, electronics, hydraulics, electrical systems. When they graduate, everyone gets a job—$60,000 a year. You can do that in robotics, coding, accounting, a lot of health-care fields. That’s what we should be doing. It doesn’t mean you can’t go to college. It just means that you get an education that leads to a job.
As for immigration, there’s the Schumer-McCain bill. It allows educated individuals—who mostly went to American schools and got advanced degrees here in science, technology, engineering, and math—to stay. I think we should let them stay and let them build their careers and homes and then have some kind of path to citizenship. And it’s very tough. It takes 15 years, showing you’re a good, law-abiding taxpayer here. You’re a documented immigrant whose path to become a citizen is not behind everyone else’s.
And look, we’re not going to kick 11 million people out. President-elect Trump is different from candidate Trump. He’s now said that if you break the law, we’re going to deport you. Of the 11 million undocumented, only 800,000 are estimated to have broken the law. By the way, that is the current policy of the United States. President Obama deported 2.8 million people for breaking the law. The BRT supports immigration. It is a pro-jobs argument.
The fact is, most people, when they say they want to get rid of immigration, it’s not necessarily that they don’t like immigrants. They’re more afraid that the American way of life is changing. So you could be multicultural but still support the American way of life. This is the only nation on the planet that was an idea. It was a vision. It was a value. It was not a tribe. I think it’s good that a lot of people want to make certain that it doesn’t change.
The same thing seems to be happening in Europe as occurred in the U.S. Do you think it’s a temporary phenomenon? A generational one? Or is it a permanent movement to redraw national borders, national identities, regrouping after two decades of constant disruption across so many destabilizing forces in their lives?
I do think if you go to Europe and part of Britain, there is the same frustration on income inequality, about growth in wages, about lost jobs. How’d that happen? A lot of it is government policy, by the way. A lot of what you saw in America and you see overseas is, “I want a change.” They want a wrecking ball brought to these governments. A lot of us are sympathetic with that. We want to see something different. We want things to be better.
Ultimately, you have to have facts, analysis, and real detail to make that happen. Populism itself could destroy things. Just keep in mind about Europe: Since World War II, they’ve had peace. They didn’t have peace for the 2,000 years before that. So there are benefits people are reaping. Maybe they’ve forgotten about it. It’s important to have peace in Europe, too.
One populist issue is regulation, the kind that came after the crisis. In people’s minds, less regulated means more risky. How do you see regulation playing out over the next four years?
JPMorgan didn’t jeopardize the system. We did not cause the crisis. We have three times more capital than we had back then. We saved 30,000 jobs. We helped governments, cities, schools, states, hospitals that probably wouldn’t have survived. But I understand the concept. The American public saw a disaster. It wasn’t their fault—it was Wall Street and Washington. And they absolutely have the right to say, “We want a safe and sound banking system that doesn’t cost me money and doesn’t take down my economy.”
That does not mean that therefore all these rules and regulations are good. A lot of the things in Dodd-Frank had nothing to do with the crisis. Zero. Nada. It was just the pet peeves of certain Democrats.
But we have not solved the housing market with mortgages. That issue, which is divided among seven agencies, or something like that, banks and others are afraid to make mortgages to first-time homebuyers, the self-employed, or people who had a prior bankruptcy. Now, 80 percent of the time, prior bankruptcies are perfectly legitimate. It was usually due to death, divorce, disease, loss of job. They deserve a second chance. We haven’t fixed that.
Even Chuck Schumer used to say to me, “Look, eventually this huge legislation will be opened up, we’ll relook at it, recalibrate it, synchronize it. You know, reduce the negative parts that have no benefit while still accomplishing the ultimate goal.” So it’s a perfectly reasonable thing to try to figure out where you can do better—as opposed to the knee-jerk reaction that everything that was put in place is good.
Are the days over when the industry essentially had a scarlet letter on its back?
I don’t know if it’s going to be over. Most of our customers like us. I’m welcome in Detroit—and California.
When the second TARP [Troubled Asset Relief Program] happened, that was a scarlet letter. Not every bank needed it. But the rhetoric was that all the banks were bailed out. They were not all bailed out. But that became a scarlet letter.
I don’t think it’s going to go away for a long time. I think all you can do is just earn your stripes every single day by doing a good job for every client, every single community, and every single city around the world. That’s my job. I’m very proud of JPMorgan Chase.
You’re not going to be Treasury secretary, but you will be involved in advising the administration. When you think of your legacy, and looking forward with Detroit very much part of it as well, what do you want to be remembered for?
You gotta do it all, right? Just like the mayor’s doing here, you’ve got to have systems right, technology right, culture right, people right. I’ve got to do it right in every country. I gotta get the whole mosaic right. So the one thing I want people to say is, “We’re gonna miss that son of a bitch. The world is better off for him. He made this a better place.”
I am so damn proud of my company. You need a JPMorgan Chase for the great future vitality of American society.
Is there going to be a second act after you leave, when you leave?
I live and breathe JPMorgan Chase. I wear this jersey, “It’s not about my comp.” I really mean it. I want to make this place better. And so when I leave here, I’ll probably teach a little bit. I may write a book. I have been through a lot. I’m lazy, so I’ll probably go to New York City and maybe join or start an entrepreneurs of color fund like we have here in Detroit. It’s going to be a gas. I’m going to do a lot of stuff. But I will not run another major big company.
And if Donald Trump did call you in a year’s time, in two years’ time, if we did see the economy teetering a bit. Would you take the call?
I would never not take a call from the president of the United States of America and would listen to what he has to say and consider what he has to say. Again, I don’t think I’m suited for it.
Now, if you somehow convinced me I’m the only one who could do something like that, I would consider it a patriotic duty. I doubt that’s ever gonna be the case.
But you’re open to it.
I would take the call.