JPMorgan Chief Executive Jamie Dimon early Thursday morning released his annual letter to shareholders, in which he defended capitalism, praised lower corporate tax rates and warned of potentially tumultuous days ahead for the economy.
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“There is no question that capitalism has been the most successful economic system the world has ever seen,” Dimon wrote in the 54-page letter. “It has helped lift billions of people out of poverty, and it has helped enhance the wealth, health and education of people around the world. Capitalism enables competition, innovation and choice.”
The CEO of the nation’s largest bank -- whose name is often floated as a potential presidential candidate -- also took a swipe at socialism, warning that it “inevitably produces stagnation, corruption and often worse.”
Dimon’s comments come at a time of renewed interest in democratic socialism, as progressive firebrands like New York Rep. Alexandria Ocasio-Cortez and Vermont Sen. Bernie Sanders -- who have not shied away from the label -- continue to make headlines.
Meanwhile, a Gallup poll from August found that 57 percent of Democrats now view socialism positively, compared to only 47 percent who view capitalism positively. Conversely, Republicans are very positive on capitalism, while only 16 percent were positive on socialism.
“This would be as much a disaster for our country as it has been in the other places it’s been tried,” Dimon wrote of socialism.
In the missive, Dimon touched on everything from the student loan debt crisis to infrastructure investment and health care. He also praised the Republican-passed 2017 Tax Cuts and Jobs Act, which slashed the corporate tax rate to 21 percent from 35 percent. That alone added $3.7 billion to JPMorgan’s net income, Dimon said.
Dimon also weighed in on growing fears about an impending economic recession, following the inversion of the bond yield curve in late March and the decision by the Federal Reserve to halt interest rate hikes for the remainder of the year -- both spurred renewed concerns about the health of the economy on the heels of a rocky month for the markets. December was the worst month for the Dow Jones Industrial Average and the S&P 500 since the Great Depression.
While Dimon said he remains ultimately optimistic about the long-term growth of the U.S, and the rest of the world, he warned the near-term economic outlook is increasingly complex “and fraught with risks.”
“The extremely volatile global markets in the fourth quarter of 2018 might be a harbinger of things to come,” Dimon said.