Nearly a month into a national shutdown, President Trump is finally set to announce who will run his council to advise him on reopening the economy. Although Fox News reported that the task force would include Ivanka Trump and Jared Kushner as well as some other Cabinet officials, Trump claims that his selection won’t be finalized until later on Tuesday, promising it will feature “most prominent people in the country, the most successful people in the various fields.”
If so, there’s one obvious figure that Trump must choose to save his reelection odds: JPMorgan Chase CEO and Chairman Jamie Dimon.
Under Dimon’s tenure, JPMorgan Chase has become the biggest bank in the nation and achieved the highest market cap on the planet. In large part, this is because of Dimon’s expert financial maneuvering during the 2008 financial crisis. Prior to the recession, Dimon reined in lending, putting it in a much stronger position than other banks. As a result, the federal government turned to Dimon to save two separate banks, Bear Stearns and Washington Mutual. The Federal Reserve was so desperate to ensure that Dimon got the deal done, and thus save the country from total financial collapse, that it pledged $30 billion for mortgage securities.
“The Federal Reserve judged it necessary to take actions that extended to the very edge of its lawful and implied power, transcending certain long-embedded central banking principles and practices,” Paul Volcker famously criticized of the Fed’s overreach for the move. But alas, Dimon bit the bullet, taking what amounted to a $19 billion tab of fines and settlements from his acquisitions and saving the country from the potentially catastrophic fallout of Bear Stearns’s and Washington Mutual’s ruin.
Since the onset of the coronavirus, Dimon has been proactive in insulating the bank (and his clients) from crisis. He set aside nearly $7 billion in reserves, eating a 69% profitability loss, to protect the bank from loan defaults. JPMorgan has already offered $25 billion in credit extensions related to the coronavirus, a move made even more remarkable by the fact that companies are reportedly drawing on credit lines at twice the rate than they did during the 2008 recession.
This is the sort of thinking Trump needs and wants: knowing when and how to take big risks and more importantly, when not to.
To reopen the economy, Trump needs a series of experts who understand supply shocks, our impending credit crisis, consumer spending, and cash flows. Although Trump will certainly require experts in manufacturing, financial experts will prove equally important. There’s no sharper one than Dimon, with whom the president already has a working, albeit sometimes shaky, relationship.
Trump prides himself on running the nation like a business, and what better way to prove it than tapping the nation’s foremost financial boss to run the reopening of the economy?
