JPMorgan Chase & Co. (NYSE:JPM) Chairman and CEO Jamie Dimon believes the economic recovery after the pandemic will last at least a few years. He also warned that “inept” public policy and government dysfunction are causing many serious symptoms.
Further, he said there was “some froth and speculation” in some areas of the market, although he didn’t say where.
JPMorgan Chase CEO expects a long recovery
In his annual letter to JPMorgan Chase shareholders, Dimon said he believes the U.S. economy will see strong growth due to the federal government’s pandemic response, which has enabled some consumers to increase their savings.
He believes that “with excess savings, new stimulus savings, huge deficit spending, more QE, a new potential infrastructure bill a successful vaccine and euphoria around the end of the pandemic, the U.S. economy will likely boom.” He added that the boom could “easily run into 2023 because all the spending could extend well into 2023.”
CNBC noted that Dimon led JPMorgan Chase through the 2008 financial crisis, and he pointed out that the government’s response to the pandemic has greatly exceeded the response to the financial crisis. He added that we can’t know the longer-term impact of the boom from reopening the economy for several years. Dimon explained that it would take time to assess the quality of the government spending.
He also clarified that if the government dollars are “spent wisely,” everyone will see greater economic opportunities.
Symptoms of “inept” public policy
Dimon described the “horrific murder” of George Floyd and the extremely slow economic growth over the last 20 years as symptoms of a bigger issue: “inept” public policy and widespread dysfunction in the government. He added that the issues over the last year are “only the tip of the iceberg” and that they “merely expose enormous failures that have existed for decades and have been deeply damaging to America.” Dimon also said that the U.S. was “totally unprepared” for the COVID-19 pandemic.
The JPMorgan Chase CEO also pointed out that the U.S. has been through difficult periods before, such as the Civil War, the Great Depression, and World War I and II. He believes that in each of those events, the nation’s “might and resiliency strengthened our position in the world,” especially in international relations, but this time could be different. CNN notes that this means U.S. rivals like China could use the current crisis to catch up.
Dimon added that the first step is for the U.S. to admit it has serious problems, and he offered some advice about how to get the nation back on track. He described inequality as “the fault line” in the nation’s problems, adding that its cause is “our own failure to move beyond our differences and self-interest and act for the greater good.”