The United States is entering a post-pandemic boom, according to JP Morgan chief Jamie Dimon, even though it is “torn and paralyzed by politics as well as racial and income inequality”.
In its annual letter to shareholders, Dimon, the prominent U.S. banker paid $ 31.5 million, called for In 2020, higher spending on everything from infrastructure to childcare and supported higher taxes on businesses and the wealthy and to help pay for it.
But he said the economy was on the verge of a “Gold Lock moment”
Dimon’s closely monitored letter stands in stark contrast to last year, when the JP Morgan director predicted that the United States was heading for a “bad recession” in which US gross domestic product could fall by up to 35%.
But his positive assessment of the economic landscape also comes with reservations. Dimon has long warned that growing economic inequality poses a systematic threat, saying future growth has been challenged by “China, Covid-19 and our own competence”.
Dimon also used the letter to call for greater corporate involvement in the political sphere, a step that comes as U.S. companies have been pressured to talk about issues including racial inequality and the right to vote.
2020 was an “extraordinary year by any standards,” Dimon wrote.
“It was a year of a global pandemic, a global recession, unprecedented acts of government, turbulent elections and deeply felt social and racial injustice. It was a year in which we each faced difficult personal challenges, and a staggering number of us lost our loved ones. It was also a year in which those of us were disproportionately hurt by unemployment and poverty.
“And it was a time when companies discovered what they really were and sometimes what they could become.”
America has faced hard times before, Dimon noted, referring to the Civil War, World War I, the 1929 U.S. stock market crash and the Great Depression that followed, among other things. “But in both cases, America’s strength and resilience strengthened our position in the world, especially in relation to our major international competitors. This time may be different. ”
China’s leaders believe America is in decline, Dimon wrote, and “see an America losing ground in technology, infrastructure and education – a nation torn and paralyzed by politics, as well as racial and income inequality – and a country , incapable of coordinating government policies (fiscal, monetary, industrial, regulatory) in any coherent way to achieve national objectives. Unfortunately, there is a lot of truth in this recently. ”
The United States needs a “Marshall Plan,” he wrote, referring to the initiative to help Western Europe rebuild after World War II. Such a plan would mean more expenditure on infrastructure, education, affordable childcare and job training and “could very well mean higher taxes for the wealthy”.
“Should this happen, the wealthy must keep in mind that if the tax money improves our society and our economy, the same individuals will actually be among the biggest beneficiaries,” Dimon wrote.
In an interview with the Wall Street Journal, Dimon also suggested that he support an increase in corporate tax as long as it was “reasonable and moderate” and kept the United States competitive with other countries.
His comments come as the Biden administration is trying to push through a $ 2tn infrastructure bill and in part pay for it by raising corporate taxes. The bill faces unanimous opposition from Republicans, some Democrats and the Business Roundtable, America’s most powerful business lobby.
But other business leaders have been more supportive. This week, Amazon founder Jeff Bezos expressed support for the infrastructure bill, saying he was also open to an increase in corporate tax rates.
Dimon also said JP Morgan was willing to take political positions on today’s major issues. His comments come as Republicans have turned to companies that have weighed in on a controversial bill on voting rights in Georgia, which opponents say deprives black voters. Senate Majority Leader Mitch McConnell told executives this week to “stay out of politics.”
Dimon wrote: “We are fully committed to tackling some of the world’s biggest problems – climate change, poverty, economic development and racial inequality,”
“We participate at this level because companies (like ours) have an extraordinary ability to help. We help not only with financing, but with developing a strong public policy that can have a greater impact on society than the collective effect of companies that are responsible citizens locally. ”