“Unfortunately, the tragedies of this past year are only the tip of the iceberg — they merely expose enormous failures that have existed for decades and have been deeply damaging to America,” Dimon wrote, including that the nation was “totally unprepared” for the lethal pandemic.
“In each case, America’s might and resiliency strengthened our position in the world, particularly in relation to our major international competitors,” Dimon mentioned. “This time may be different.”
In different phrases, America’s rivals, most notably China, might use this second to catch up.
Don’t assume the issues will go away
In a cellphone interview with NCS Business, Dimon urged the nation to take this second critically.
“Are we at a crossroads? I don’t know, but I would treat it like one,” he mentioned. “The better strategy in life is to assume it is and fix it, rather than assume it will go away.”
Dimon prompt the first step is for America to confess it has severe issues.
“Even in business, you don’t fix things if you don’t recognize you have a problem,” Dimon advised NCS Business. “We are in a position where we could do a great job — or continue to just muddle through and then we’ll all be blaming each other.”
In his shareholder letter, Dimon wrote that America is “clearly under a lot of stress and strain” from varied occasions, together with the pandemic, racial unrest, the rise of China and “the divisive 2020 presidential election, culminating in the storming of the Capitol and the attempt to disrupt our democracy.”
“Unfortunately, recently, there is a lot of truth to this,” Dimon mentioned. “Perhaps we were lulled into a false sense of security and complacency in the last two decades of the 20th century as we enjoyed relative peace in the world and a position of global dominance, validated by the fall of the Soviet Union.”
Dimon prompt that many of America’s issues are self-inflicted and the consequence of excessive polarization and “broken policy.”
“Politics is increasingly divisive, and government is increasingly dysfunctional, leading to a number of policies that simply don’t work,” Dimon wrote. “The fault line is inequality. And its cause is staring us in the face: our own failure to move beyond our differences and self-interest and act for the greater good.”
Dimon: This financial growth might run into 2023
The excellent news is that Dimon thinks these issues are fixable and he is upbeat on the financial restoration from the pandemic.
“I have little doubt that with excess savings, new stimulus savings, huge deficit spending, more QE [quantitative easing], a new potential infrastructure bill, a successful vaccine and euphoria around the end of the pandemic, the US economy will likely boom,” Dimon wrote. “This boom could easily run into 2023 because all the spending could extend well into 2023.”
Asked by NCS Business when the final time was that he felt this optimistic about the US economic system, Dimon mentioned, “not for a long time.”
“The circumstances are quite good, though some people are still being left behind. And we’re coming out of COVID, thank God,” he mentioned.
The coming financial growth is “good for everybody ultimately,” Dimon mentioned, “but it doesn’t fix all of our problems.”
Dysfunction is slowing down the economic system
Those issues, in keeping with Dimon’s letter, embody inequality in the nation’s schooling system, a pricey litigation and regulatory system, “terrible” infrastructure planning, wasteful spending, ineffective immigration insurance policies and “poorly designed” social security nets.
“It is hard to look at these issues in their totality and not conclude that they have a significant negative effect on the great American economic engine,” Dimon mentioned, including that the “dysfunction” might simply have been a 1% drag on the nation’s financial progress price.
Dimon laid out a collection of what he sees as root causes for America’s points, together with short-term considering, an overreliance on financial fashions, media hype and partisan politics.
“Our problems are complex and frustrating — but they are fixable with hard work,” Dimon wrote.
He laid out 15 insurance policies leaders ought to focus on, together with improved wages for low-skilled work, coaching for jobs, making it simpler for these with a felony file to get a job, higher fiscal and tax coverage, reforming social security web packages, reviewing regulatory pink tape, modernizing infrastructure, clever industrial coverage and correct immigration insurance policies.
‘We wouldn’t have a divine proper to success’
In the finish, Dimon argued that wholesome financial progress “may be the only way out of our current situation” of gradual revenue progress and quickly rising debt.
If the US economic system grew at 3% as a substitute of 2% over a 10-year interval, that will result in $2.3 trillion in extra GDP by the finish of the decade, translating to a median improve in family revenue of about $18,000, in keeping with JPMorgan.
“A 3% growth rate is what we used to have — and it is achievable again,” he wrote.
Dimon urged America to roll up its sleeves and deal with its myriad of issues — earlier than it is too late.
“While I have a deep and abiding faith in the United States of America and its extraordinary resiliency and capabilities, we do not have a divine right to success,” he wrote. “Our challenges are significant, and we should not assume they will take care of themselves.”