In a letter to shareholders, JPMorgan Chase CEO Jamie Dimon emphasized three points, the post-Covid U.S. economy, high inflation that will bring about rising interest rates, and Russia’s invasion of Ukraine, warning that “their confluence may dramatically increase the risks ahead.”
At the same time, the CEO took a shot at the Biden administration for its “incomprehensible and uncoordinated” policies and “dysfunctional” politics.
“We are facing challenges at every turn: a pandemic, unprecedented government actions, a strong recovery after a sharp and deep global recession, a highly polarized U.S. election, mounting inflation, a war in Ukraine and dramatic economic sanctions against Russia,” Dimon wrote. “While all this turmoil has serious ramifications on our company, its effect on the world — with the extreme suffering of the Ukrainian people and the potential restructuring of the global order — is far more important.”
“These factors will likely have a meaningful effect on the economy over the next few years and on geopolitics for the next several decades,” Dimon would later warn.
He said the U.S. needs to “put aside our differences” and work with the Western nations “come together in defense of democracy and essential freedoms, including free enterprise.”
Dimon said the U.S. economy is strong and that in today’s economy “the consumer is in excellent financial shape,” but inflation looms and the world economy will slow as a result of Ukraine and the sanctions on Russia.
“Critical to solving these problems is strong American leadership,” Dimon said. “American global leadership is the best course for the world and for America — and our leadership needs to articulate to its citizens why this is the case.”
“The war in Ukraine reminds us that in a troubled world, national security always becomes the paramount concern,” he stated. “We should never again forget that this is true even in peaceful times – and we should never again be lulled into a false sense of security. Power abhors a vacuum, and it should be increasingly clear to all that without strong American leadership, chaos likely will prevail.”
The CEO also commented on the need to restructure trade and supply chains, where they affect matters of national security, before focusing on “poor management of basic policy in America.”
“Many feel despondent about the ‘decline’ of America,” he said. “Our economy has had anemic growth for decades. COVID-19 and George Floyd’s murder cast a spotlight on what we already knew — that our lower-income citizens, often minorities, suffer more in our society, particularly during recessions and times of turmoil. Continuing income inequality may very well be causing growing partisanship, as some people believe the American dream is fraying and that our system is unfair, leaving many of our citizens behind.”
In noting economic growth has averaged just 2 percent over the past decade, he said, “Freedom and its brother, free enterprise, properly regulated are the answer — not unconstrained capitalism nor crony capitalism, where business uses government and regulations to maintain its position or strengthen its hand. All interest groups, business groups included, should applaud good public policy and not resist it for self-serving reasons.”
“What we really need are free enterprise, more civic-minded companies and citizens, and extraordinarily competent government and policies,” Dimon added.
And this is when he seemed to target the Biden administration.
“We have fallen into the rut of false narratives, which distracts us from facing reality. We don’t define our problems properly. If you have the wrong diagnosis of a problem, you will certainly have the wrong solution,” he wrote. “Even if you have the right diagnosis, you still may arrive at the wrong solution — but your odds are certainly much better. Our policies are often incomprehensible and uncoordinated, and our policy decisions frequently have no forethought and no identification of desired outcomes.”
Misguided finger-pointing and regulations were cited as obstacles, and spoke of a key missing ingredient in all the focus on diversity: brainpower.
“We sometimes blame inflation on corporate profits — for example, the cost of meat in the United States is high not because of the profits earned by the meatpacking industry but because of high cattle and feed costs and disruptions in logistics,” Dimon continued. “Similarly, energy costs are high not because of price gouging but because of the dramatic decline in investments in energy, which results in reduced supply when demand goes up. Regulation has dramatically impeded our ability to build good infrastructure in a timely manner — the cost of building a highway has more than tripled in 20 years purely because of expenses due to regulations.
“Our politics are dysfunctional, which has prevented some of our best, brightest and most competent to want to work in government,” he said, adding, “While we have plenty of economists, academics and lifetime politicians in government, who I know are committed to doing their best, we need additional brainpower, capabilities and experience from leaders across all sectors of our society, including business. It is going to take extraordinary, broad-based leadership to solve our problems.”
Writers and editors can be contacted at [email protected] with feedback, tips, or corrections.
Tom Tillison grew up in Maryland before moving to Central Florida as a young teen. It is in the Sunshine State that he honed both his passion for politics and his writing skills. Tillison also contributes to BizPac Review.
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