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The US economy will boom in 2023, but inequality must be resolved: Jamie Dimon in his latest letter to JPMorgan shareholders


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President and CEO Jamie Dimon published its annual letter to shareholders on Wednesday, and, like his will, he gives an overview of the one-year global pandemic, overcoming the difficulties it has created for many and the widening gap between rich and poor. increase.

In a sign of many problems Dimon wanted to deal with, the letter was 66 pages long. That makes it the longest nostalgia for shareholders he’s ever created, according to the New York Times.

“Our country is clearly under a lot of stress and tension from various events: of course, the COVID-19 pandemic has claimed American lives more than the total damage of the War. World War II, the Korean War and the Vietnam War combined. Millions more, in severe economic hardship, ”he said.

Dimon also acknowledged “the brutal murder of George Floyd and the ensuing racial unrest; the 2020 presidential elections are divisive, culminating in a hurricane on the Capitol and our attempt to disrupt democracy; and seemingly inevitable, but still alarming and astonishing, the rise of China, threatens America’s global primacy. “

But the US has “faced difficult times in the past,” he said, adding that the problems the country has encountered are fixable. But first, in Dimon’s view, institutions that have lost people’s trust – government, schools, media and business – “have to get it back and understand that the underlying problem is inequality. . “

“The huge wealth of our country is accumulating very little,” he said.

Dimon’s US economic outlook remains optimistic, despite the many challenges facing the world’s largest economy. He noted that the government’s response to the pandemic crisis is much larger than it has responded to the 2008 financial crisis.

“I have no doubts that with excess savings, new stimulus savings, large deficit spending, more QE, potential new infrastructure bills, successful vaccines and mania,” said Dimon. When the pandemic ends, the US economy may explode ”. “This boom could easily happen in 2023 because all spending could extend to 2023.”

Dimon, a member of Business Roundtable’s board of directors, said stock market valuations are “pretty high” even as a multi-year boom could justify those levels given the market’s bullish valuation. growth and excessive savings. However, he admits that “some frost and speculation” exist in areas of the market, without providing details.

Dimon also weighed in on the threat posed to banks by fintech and Big Tech, a “vast and powerful shadow banking system,” that increasingly encroached on traditional banking. He mentioned Amazon
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Facebook
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Google
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“And now it’s Walmart
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“As emerging competitors need to be more tightly regulated.

“As the importance of cloud, AI and digital platforms increases, this competition will become even more formidable. As a result, banks are playing a smaller role in the financial system, ”he said.

But much of Dimon’s letter discusses the need for the United States to acknowledge the problems leading to a growing gap between rich and poor, and address the challenges of American education and improvement, and Making a healthcare system is still out of many reach.

Nearly a decade after the Affordable Care Act was passed, more than 30 million Americans remain without health insurance, and life expectancy has declined in the minority and poorest communities.

See: Biden said the bailout package extended on ‘Obamacare’ by cutting the cost of health insurance

“Our education and health problems come together in this alarming statistic: 70% of today’s youth (17-24 years old) are not eligible for military service, This is due to lack of appropriate education (basic reading and writing skills) or health problems (Dimon writes.

The United States also needs to reform its immigration policies and improve the “poorly designed” social safety net. Nearly 30% of American workers make less than $ 15 an hour, which in itself is almost a living wage, notes Dimon. About 30% of Americans don’t have at least $ 400 in emergency savings.

“Governments, both federal and state, fight to keep military bases open that we don’t need and operating Veterans’ hospitals fail – making the military more costly and ineffective. more fruit, “the letter wrote.

Dimon urges leaders to stay away from short-term thinking that is hindering progress toward solving important problems.

“When you step back and take a holistic view over the years, looking at the whole situation, it’s the cumulative impact of many of our policies that led to their failures today,” he writes. me, ”he wrote.

Dimon called for a national plan to improve training for real-world jobs to increase wages and improve workforce participation. He called for higher wages for low-skilled jobs to allow poorer people to earn middle-class income.

“We need consistent, coherent and multi-year planning and reporting, planning and budgeting,” he said. “It is especially important that most federal programs – military, infrastructure, and education – have good long-term plans and are accountable for their implementation.”

Continue reading: Biden says his $ 2.3 trillion infrastructure plan will create 19 million jobs – most of which don’t require a college degree.

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