The federal government is slow, inept and doesn’t do a very good job learning from history, and as a result is preventing the U.S. economy from growing as fast as it could, according to JPMorgan Chase CEO Jamie Dimon.
In his annual letter to shareholders, Dimon said the list of problems in the U.S. government is “fairly shocking,” and said the government has only gotten worse over the last 20 years.
“This is not secular stagnation — this represents senseless and misguided policies,” he said.
Dimon called federal infrastructure policy a “disaster.”
“It took eight years to get a man to the moon (from idea inception to completion), yet it now can sometimes take a decade to simply get the permits to build a bridge or a new solar field,” he wrote. “The country that used to have the best infrastructure on the planet by most measures is now not even ranked among the top 20 developed nations according to the Basic Requirement Index.”
Even with President Trump’s effort to roll back regulations, Dimon said federal rules are still excessive, and said as a result that small business formation has dropped to a 30-year low.
Dimon said labor force participation has fallen, and said rampant opioid addiction is a big reason why working-age men are “permanently out of work.”
Federal immigration policies also “fail us in numerous ways,” he wrote.
“Forty percent of foreign students who receive advanced degrees in science, technology and math (300,000 students annually) have no legal way of staying here, although many would choose to do so,” he wrote. “Most students from countries outside the United States pay full freight to attend our universities but many are forced to take the training back home. From my vantage point, that means one of our largest exports is brainpower.”
Dimon added that U.S. healthcare costs are twice as high as those found in other developed countries.
He added that government policies at the state and local levels are also failing, particularly when it comes to education. Dimon said most young people have an education that doesn’t let them qualify for military service.
“Our schools are leaving too many behind,” he wrote. “In some inner city schools, fewer than 60% of students graduate, and of those who do, a significant number are not prepared for employment.”
Dimon said these government failures largely reflect a failure of policymakers to learn from past mistakes.
“We are effectively crippled when it comes to fixing our problems
even when they are totally predictable,” he wrote. “Puerto Rico’s bankruptcy, Detroit’s bankruptcy, unfunded pension plans, the job skills gap, and crumbling bridges and tunnels are prime examples.”
He added that the government also tends to seek out short term gains at the expense of making decisions that are bad in the long-term, and called out President Clinton in one example.
“For example, President Bill Clinton (and I don’t mean to pick him specifically out for criticism) usually gets credit for driving a strong economy,” he wrote. “But the excessive mort-gage lending, incented and promulgated by the federal government (I am in no way saying that banks and investors didn’t play a part, too), is part of the reason the economy at that time did well. It blew up late in President George W. Bush’s term.”
“There are many examples of presidents getting credit or blame for scenarios that had nothing to do with their governing,” Dimon said. “We simply learned the wrong lessons. And in the short run, we tend to simplistically look for scapegoats instead of solutions.”
