“Sadly, the tragedies of this previous 12 months are solely the tip of the iceberg — they merely expose huge failures which have existed for many years and have been deeply damaging to America,” Dimon wrote, including that the nation was “completely unprepared” for the lethal pandemic.
“In every case, America’s would possibly and resiliency strengthened our place on the planet, notably in relation to our main worldwide opponents,” Dimon stated. “This time could also be completely different.”
In different phrases, America’s rivals, most notably China, may use this second to catch up.
Do not assume the issues will go away
In a telephone interview with CNN Enterprise, Dimon urged the nation to take this second critically.
“Are we at a crossroads? I do not know, however I’d deal with it like one,” he stated. “The higher technique in life is to imagine it’s and repair it, slightly than assume it can go away.”
Dimon instructed step one is for America to confess it has critical issues.
“Even in enterprise, you do not sort things in case you do not acknowledge you’ve gotten an issue,” Dimon instructed CNN Enterprise. “We’re ready the place we may do an incredible job — or proceed to only muddle via after which we’ll all be blaming one another.”
In his shareholder letter, Dimon wrote that America is “clearly underneath quite a lot of stress and pressure” from numerous occasions, together with the pandemic, racial unrest, the rise of China and “the divisive 2020 presidential election, culminating within the storming of the Capitol and the try and disrupt our democracy.”
“Sadly, not too long ago, there’s quite a lot of fact to this,” Dimon stated. “Maybe we had been lulled right into a false sense of safety and complacency within the final 20 years of the twentieth century as we loved relative peace on the planet and a place of world dominance, validated by the autumn of the Soviet Union.”
Dimon instructed that a lot of America’s issues are self-inflicted and the results of excessive polarization and “damaged coverage.”
“Politics is more and more divisive, and authorities is more and more dysfunctional, resulting in quite a lot of insurance policies that merely do not work,” Dimon wrote. “The fault line is inequality. And its trigger is staring us within the face: our personal failure to maneuver past our variations and self-interest and act for the better good.”
Dimon: This financial growth may 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’ve little doubt that with extra financial savings, new stimulus financial savings, big deficit spending, extra QE [quantitative easing], a brand new potential infrastructure invoice, a profitable vaccine and euphoria across the finish of the pandemic, the US financial system will doubtless growth,” Dimon wrote. “This growth may simply run into 2023 as a result of all of the spending may prolong nicely into 2023.”
Requested by CNN Enterprise when the final time was that he felt this optimistic concerning the US financial system, Dimon stated, “not for a very long time.”
“The circumstances are fairly good, although some persons are nonetheless being left behind. And we’re popping out of COVID, thank God,” he stated.
The approaching financial growth is “good for everyone finally,” Dimon stated, “however it does not repair all of our issues.”
Dysfunction is slowing down the financial system
These issues, in keeping with Dimon’s letter, embrace inequality within the nation’s training system, a pricey litigation and regulatory system, “horrible” infrastructure planning, wasteful spending, ineffective immigration insurance policies and “poorly designed” social security nets.
“It’s arduous to take a look at these points of their totality and never conclude that they’ve a big destructive impact on the nice American financial engine,” Dimon stated, including that the “dysfunction” may simply have been a 1% drag on the nation’s financial progress price.
Dimon laid out a sequence of what he sees as root causes for America’s points, together with short-term pondering, an overreliance on financial fashions, media hype and partisan politics.
“Our issues are advanced and irritating — however they’re fixable with arduous work,” Dimon wrote.
He laid out 15 insurance policies leaders ought to concentrate on, together with improved wages for low-skilled work, coaching for jobs, making it simpler for these with a legal report to get a job, higher fiscal and tax coverage, reforming social security internet applications, reviewing regulatory purple tape, modernizing infrastructure, clever industrial coverage and correct immigration insurance policies.
‘We shouldn’t have a divine proper to success’
In the long run, Dimon argued that wholesome financial progress “stands out as the solely means out of our present state of affairs” of sluggish revenue progress and quickly rising debt.
If the US financial system grew at 3% as an alternative of two% over a 10-year interval, that may result in $2.3 trillion in further GDP by the tip of the last decade, translating to a median improve in family revenue of about $18,000, in keeping with JPMorgan.
“A 3% progress price is what we used to have — and it’s achievable once more,” he wrote.
Dimon urged America to roll up its sleeves and deal with its myriad of issues — earlier than it is too late.
“Whereas I’ve a deep and abiding religion in the US of America and its extraordinary resiliency and capabilities, we shouldn’t have a divine proper to success,” he wrote. “Our challenges are important, and we must always not assume they may handle themselves.”