Free trade has taken a beating this election season, from the left and the right. But Jamie Dimon believes it would be a mistake to run away from trade deals.
Instead, the JPMorgan Chase CEO argues the U.S. needs to figure out a way to help Americans who are hurt by trade deals.
“We shouldn’t hold back the progress from trade and technology. But it’s fair to lift up the people that were hurt by it, as opposed to killing the golden goose,” Dimon told CNNMoney’s Poppy Harlow in an exclusive interview in Detroit.
Dimon said “trade has been hugely beneficial” to 99% of the people, but not everyone. His comments allude to the ongoing debate over how many jobs have been created and destroyed by controversial trade deals like NAFTA.
The Wall Street exec said there needs to be “really powerful trade assistance” for the roughly 1% of Americans he estimates are hurt by trade. The help could come in the form of income assistance, relocation and business redevelopment programs.
Dimon’s defense of trade varies greatly with Donald Trump and Bernie Sanders, the Republican and Democratic presidential candidates who have bashed trade deals due to fears of jobs being shipped overseas.
“The American worker is being crushed” by trade, Trump argued in a March op-ed in USA Today.
Even Hillary Clinton has said she doesn’t support the 12-nation Trans Pacific Partnership (TPP) being pushed by the Obama administration and Republicans. Clinton, whose husband signed the North American Free Trade Agreement (NAFTA) in late 1993, advocated for TPP as secretary of state.
Acknowledging these shifting political winds, Dimon said: “We should have an economy that works for everybody.”
The JPMorgan boss also made a more general defense of capitalism, which has lost favor among some young people in the wake of the Great Recession. A recent Harvard Institute of Politics poll shows that only 19% of Americans between 18 and 29 identify themselves as capitalists, while 16% identify as socialists. And just 42% of that age group said they support capitalism.
Dimon said he can “completely sympathize” with the fact that young people want to “change the world, as I did, as I still do.”
However, Dimon said he was “caught off guard” by that Harvard study, adding that he’s “not quite sure the American public knows that socialism means the government owns everything.”
Dimon’s comments come as Sanders, a self-described socialist, has surprised many by garnering millions of votes in the Democratic primary and posing a serious challenge to Clinton.
Still, Dimon suggested that the public’s skepticism about capitalism is a symptom of a hangover from the Great Recession.
“They are mad at big institutions. All big institutions — the Congress, big banks, big companies — have all been kind of discredited, sometimes unfairly and sometimes fairly,” Dimon said.
Dimon said he understands that many Americans are “angry” because they think: “I didn’t cause this problem.”
That’s why Dimon calls himself a “huge supporter” of greatly expanding the earned income tax credit, a payment that goes to low-income workers. It’s an idea that Warren Buffett and others have endorsed as well.
Dimon argued doing this would be “cheap relative to what it would create for society.”
It’s part of a broader prescription of actions Dimon thinks Washington needs to take to get the U.S. economy back to full strength. He called for increased investment in education, infrastructure and a focus on fixing long-term fiscal problems.
Dimon said politicians on both sides of the aisle will need to meet in the middle to solve these issues.
“Democrats should acknowledge that Republicans are terribly afraid of pork. You know, bad spending, bridges to nowhere,” Dimon said.
And Republicans need to recognize that “we desperately need” more spending to fix crumbling airports, bridges, tunnels, roads and hospitals, he said.
“If we do all these things right, I think America would be booming,” Dimon said.
