EDITOR NOTE: As much as Jamie Dimon tends to contradict himself on several topics, from cryptocurrency (bitcoin) to matters of virtue and ethics (pro-racial inequality and managing a firm that has had more than five felony counts), his criticism of Congress is something that we can agree with. A second stimulus is coming. We can all assume that. But until then, we see that politicians prefer to play politics amid a widening pandemic surge, high unemployment, and a potential wave of evictions and bankruptcies. Politics over solutions; and, as we've seen recently, rhetoric over reality. In Dimon’s case, it’s criminal violation over customer-centric virtue.
“I know now we have this big debate. Is it $2.2 trillion, $1.5 trillion?” Dimon said Wednesday, referring to competing visions for a relief bill from Democrats and Republicans, at The New York Times’ DealBook conference.
“You gotta be kidding me,” Dimon told Andrew Ross Sorkin, who is a co-anchor of CNBC’s “Squawk Box.” “I mean just split the baby and move on. This is childish behavior on the part of our politicians.” Sorkin is also a financial columnist for the Times and the editor-at-large of DealBook.
Congress has so far failed to pass a second relief bill after key parts of the first law, the CARES Act, expired in July. While financial pain for the unemployed and small businesses is set to grow as Covid-19 infections surge to records across the country, top leaders from both parties haven’t met since the Nov. 3 presidential election.
Dimon urged lawmakers to agree on fiscal stimulus that would act as a bridge until midyear 2021, when promising vaccines may be widely distributed.
“Thank God we have these two vaccines coming, thank God,” Dimon said. “Now is the time to not act like it’s over, let’s double down and get though Covid the best we can.”
In particular, pain is being felt by the “bottom 20%” of earners in terms of job losses, unlike in past recessions, he said. That cohort has effectively spent down the increased savings it had from the CARES Act and is now back to its February cash levels, Dimon said.
“There is a big part of our country that is really struggling … that is what we should be focusing on,” Dimon said. “It has zero to do with Democrats and Republicans.”
He added that “If stimulus doesn’t come, the probability of having a good economic outcome drops.”
‘Taxes have to go up’
When asked about the possibility that President-elect Joe Biden will raise taxes on corporations and people making more than $400,000, Dimon acknowledged the government’s need to have more revenue, though he said the priority should be increasing U.S. economic growth.
“Yes, taxes have to go up somewhere, and I completely understand that,” Dimon said. “There are taxes that hurt growth and taxes that don’t; so taxing my income a bit more, that doesn’t hurt growth; taxing capital formation over time hurts growth.”
In the wide-ranging interview, Dimon addressed the history of race relations in America (“racial inequality is terrible”); his assessment of bitcoin (“I’m not really interested in bitcoin”); business travel in a post-Covid world (“no way I’m going to travel less”); and rumors that he could serve as Treasury secretary in a Biden administration (“I’ve never coveted the job, ever”).
He also bluntly acknowledged that Biden has indeed won the U.S. presidential election, despite President Donald Trump’s assertions to the contrary.
“There will be a new president sworn in on Jan. 20,” Dimon said. “We need a peaceful transition. We had an election. We have a new president. You should support that whether you like it or not because it’s based on a system of faith and trust.”
Originally posted on CNBC