Jamie Dimon is worried about the future of the United States.
In the company’s annual letter, the CEO of JPMorgan expressed concern over “long-term issues” facing the country and said they could cause a crisis in the future.
“We have spoken many times about the extraordinarily positive and resilient American economy,” wrote Dimon. “Today, it is growing stronger, and it is far better than you hear in the current political discourse. But we have serious issues that we need to address — even the United States does not have a divine right to success.”
In a portion of the letter entitled “Good Public Policy is Critically Important”, Dimon highlighted major failures of public policy including East Germany, Detroit, and Freddie Mac and Fannie Mae.
“Yes, bad public policy, and I’m not looking at this in a partisan way, creates risk for the economies of the world and the living standards of the people on this planet — and, therefore, for the future of JPMorgan Chase — more so than credit or market risks,” said Dimon.
After highlighting failures of public policy, Dimon then enumerated his concerns facing the US going forward.
“I won’t go into a lot of detail but will list only some key concerns: the long-term fiscal and tax issues (driven mostly by healthcare and Social Security costs, as well as complex and poorly designed corporate and individual taxes), immigration, education (especially in inner city schools) and the need for good, longterm infrastructure plans,” he wrote.
He then touched on the dangers of policy inaction by the US. Here’s Dimon (emphasis ours):
I do not believe that these issues will cause a crisis in the next five to 10 years, and, unfortunately, this may lull us into a false sense of security. But after 10 years, it will become clear that action will need to be taken. The problem is not that the US economy won’t be able to take care of its citizens — it is that taking away benefits, creating intergenerational warfare and scapegoating will make for very difficult and bad politics. This is a tragedy that we can see coming. Early action would be relatively painless.
This is not totally the government’s fault, said Dimon.
“All of us, as US citizens” bear responsibility and must pitch in to deal with the problems, he said.
Dimon said that he has had the opportunity to meet many world leaders in his job and has learned that “breeding mistrust and misunderstanding makes the political environment far worse.”
He then lists some do’s and dont’s for policymakers and people trying to address the issues he highlighted. A few of his tips included:
- DON’T paint everything as black and white: “Most decisions are not binary, and there are usually better answers waiting to be found if you do the analysis and involve the right people.”
- DON’T attack an entire class or society of people: “This is always wrong and just another form of prejudice. One of the greatest men in America’s history, President Abraham Lincoln, never drew straw men, never scapegoated and never denigrated any class of society — even though he probably had more reason to do so than many.”
- DO compromise: “Also, you can compromise without violating your principles, but it is nearly impossible to compromise when you turn principles into ideology.”
- DO reconsider existing policy and institutions: “Analyse what is working and what is not working, and then figure out — together — how we can make it better.”