Jamie Dimon sounded like a politician as he delivered a wide-ranging address to more than 200 members of the World Affairs Council of Philadelphia at the Loews Philadelphia Hotel on Monday.
Dimon, chairman and chief executive of JPMorgan Chase & Co., briefly touted his own business, claiming a million Philadelphia-area residents — one man, woman or child out of every six — already owes his bank money for credit card, mortgage or small-business loans, or invests with the $2.6 trillion in assets banking giant.
Tanned, silver-haired, speaking fast and clear with traces of an Outer Boroughs accent, Dimon quickly moved to broader issues. Hold onto your stocks, he suggested: Sure, the U.S. economy has been growing since the 2008 financial meltdown. But it would be growing faster except for past "bad policy decisions," many of which are getting fixed (under President Trump, though Dimon didn't name him).
What bad policies? Spending trillions on wars in Iraq and Afghanistan was "like throwing money in the ocean," Dimon said — while letting roads and bridges fall apart, neglecting practical education programs, and putting too many people in prison who should be working. But the nation is moving the right way — and U.S. growth will likely accelerate, he insisted, though "you wouldn't know it to read the papers."
Dimon does worry about "a higher chance of policy error" given the (unnamed) administration's aggressive talk toward China, Iran, and trading partners. But Dimon says political noise isn't usually serious — he remembers the Nixon and Clinton impeachments, and neither hurt the economy much.
Dimon said bosses complain they can't find enough workers, so wages are slowly rising; "Isn't that what we want?" And yet it's still too hard for poor Americans to get a well-paid job. "We should fix it two ways. Proper training — apprenticeships for jobs that pay, in robotics, coding." Plus "a negative income tax" — welfare payments for poor people who work.
He cheered deregulation — it takes too long to fix New York subways or add bridges, tunnels, hospitals. But we also need to spend more on that public infrastructure, Dimon added. "Who should pay? The people in this room," Dimon told the well-dressed crowd. He thinks Trump was right to cut corporate income taxes to foreign levels — but said rich people can afford to pay more.
Ten years after the financial crisis, banker Dimon said that "in hindsight" more banks could have been allowed to fail — "Old Testament justice." But he had no suggestion that more bankers who lied about bad loans should have gone to prison. He praised the Federal Reserve for making cash available to troubled banks and investment funds that "could have taken our system down," adding that "it's going to be 25 years before banks are forgiven for what happened."
Dimon was briefly interrupted by a handful of anti-fossil-fuel protesters, who security rushed out of the Loews conference hall. Dimon looked the other way — he's used to hecklers — then called a carbon tax a better remedy than the unenforceable Paris climate accords. "But we don't have the political strength to do it," Dimon added. "We can't even raise our gas tax."
The most effective welfare state is what's provided by big white-collar employers, Dimon said: "We pay our people well. We give them health care. Retirement. We give them Pilates and massages. We are hugely philanthropic. We do all the things you say you want to do with a society."
In the next breath, Dimon acknowleged "issues in corporate governance." Like short-term earnings guidance, which "can corrupt" management. He noted the number of publicly traded U.S. companies has dropped from a high of 8,000 in the 1990s to about half that. In part he blamed plaintiffs' lawyers: "Litigation is capricious and arbitrary." He worries that cyber security is too focused on impractical government regulations, not fluidly directed against bad actors.
He called on his fellow business leaders to "do more promoting the good things capitalism does." He praised the Trump tax bill's cancellation of state and local tax exemptions, which he said mostly helped rich people. He condemned the low tax rates on money managers' shared investment profits — "carried interest". He wants such "loopholes" closed because they "give the American people a great distrust for the system. It makes people think the system is rigged." Which, Dimon said, "it's not."
On immigration, Dimon is for "proper border security" — but also seeks "a path to legal status for the undocumented who have been here and taxpaying for a long time."
On trade, Dimon can't bring himself to praise the Trump tariffs — he thinks they are risky — but "China was unfair." He added, "I hope [Trump's] method works."
He doesn't quite trust the government to efficiently extend "Medicare for all:" "I'm not against a single-payer plan. But it needs to be properly constructed."
Is Dimon running for president? "I am a banker first. I am not running. I just think it is very important that we have good policy," Dimon told Philly native Jim Cramer on CNBC earlier in the day. Though "I would not say a CEO cannot be a good president," or at least get elected, he added. "President Trump was a CEO."
Dimon "certainly sounds like he is running," said Howard Trauger, who runs the Philly office of Cleveland-based Carnegie Investment Counsel.
"There's always been speculation he wants to run. He could run on that platform today," said Joseph Del Raso, past chairman of the law firm Pepper Hamilton. "And he said it in a very commonsense way. Not with all the political vitriol we hear too much of nowadays."
And will the company's new Chase branches pry customers away from the established banks in Philadelphia? I expect they will find it's tough to get customers to switch," said Daniel Fitzpatrick, head of Citizens Bank of Pennsylvania and a leader of the Greater Philadelphia chamber of commerce.