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According to JPMorgan CEO Jamie Dimon, short-term thinking is causing governments around the world to make “really dumb decisions” on economic policy.
Dimon suggested that the US Federal Reserve succeeded in resolving the financial crisis in the wake of the coronavirus virus epidemic, but argued that the government failed to focus on policies that do not support “healthy growth” for the economy .
Dimon said at the CNBC-Moderate panel, “There are huge reforms for income inequality. You can have negative income taxes, you can fix education, so I have lots of things to help the poor.” ” Singapore Summit on Tuesday.
Dimon claimed that a 1% higher increase in the United States over a 10-year period would add approximately $ 4 trillion to gross domestic product (GDP), equivalent to more than $ 12,000 per capita.
“He pays for a lot of social safety net, taxes, and therefore, we no longer focus on growth, healthy development,” he argued. “What we are focusing on is accusing each other and we are strengthening ourselves, because we are not able to do very basic things,” Dimon said.
“Again this is long-term thinking, real policy with real facts and analysis, not guessing and looking at it from year to year. Year after year stuff has only become a waste of time and we have to make really dumb decisions. Caused. “
Keep markets ‘benefiting everyone’
The Fed has received an unprecedented monetary stimulus package to spark markets amid the recession from the coronovirus crisis, which has seen record highs of the S&P 500 and Nasdaq in recent weeks.
In the absence of a new round of agreements with loggerheads over fresh new bill downs with Republicans and Democrats, investors are looking into the Fed’s annual Jackson Hole Symposium this week to guide how central banks might act further . Silence of the markets.
President Donald Trump’s administration has issued incentive checks aimed at individuals and small businesses to help Americans weather the financial storm from the epidemic, but Dimon suggested it was time for the federal government.
“We knew we were going to have this great recession. What (the Fed) didn’t want was a global financial crisis other than a great recession,” Dimon told the panel. “This is where the markets close and people don’t get money, so they kept the market open, benefiting everyone.”
He said that the Fed was “so wide now” that it did not need to pump any more liquidity into the system, and instead let nature take its course. He argued that another small round of federal spending was needed to propel people into small businesses and long-term unemployment.