Captain Morgan
When this guy talks, people listen
Unless you’re an investor with JPMorgan Chase—or a Business Section reporter—you may not know who Jamie Dimon is. Think of him as the most influential banker in the country. He’s the CEO of JPMorgan Chase, and he issues an annual letter to shareholders in which he talks about more than just money.
To copy the old EF Hutton ad, when he talks, people listen.
This year’s annual letter provides a mixed opinion about the direction of the country’s economy. It’s a good news/bad news story that can have a happy ending if the country can stop fighting itself.
In a nutshell, Mr. Dimon says he expects the U.S. economy to be resilient and grow this year, but he says external forces like the war in Ukraine and the Israeli/Hamas conflict could upend progress towards the soft landing most economists have been predicting for months.
“America’s global leadership role is being challenged outside by other nations and inside by our polarized electorate,” CEO Dimon said. “We need to find ways to put aside our differences and work in partnership with other Western nations in the name of democracy … uniting to protect our essential freedoms, including free enterprise, is paramount.”
Dimon is concerned not just by America’s inability to rein in the deficit, but the deficit spending of other countries. He also cites a need for remilitarization and continued building out of the nation’s green infrastructure, which he admits will contribute to inflation, but he calls it all necessary.
Because of these things, he believes there’s less reason to be optimistic that the economy will reach the promised soft landing, which he defines as modest growth with declining inflation and lower interest rates.
He also believes investors are being a little more bullish than they should be by clocking in a 70- to 80-percent chance of a soft landing when the chances of that occurring are “a lot less” than that. And at a time when investors and economists question whether the Fed can make good on its promised rate cuts, he warned rates could go higher.
Any discussion of the economy is built on hard data, mixed with assumptions, beliefs, experience, philosophy, groupthink, political persuasion and which way the wind is blowing that day. A lot of it is not only out of our control, but out of the control of political leaders from the president on down. (That’s how you get a Jimmy Carter economy in 1980 just in time for his re-election campaign.)
However, one thing that remains within our control, within a political context, is how our “leaders” act in their official roles. The constant cries for attention that we see coming from Washington by some members of Congress who insist on making the perfect the enemy of the good only creates situations that undermine confidence in America on a global basis.
It’s time for some sense of normalcy to return, and what is normal is compromise. Not everyone gets everything they want, or get to go as far as they want to go, but the one thing we all share is freedom. That is ultimately put in jeopardy when the country is weakened economically.