
Jamie Dimon blows up at DC's dysfunction - clebio
http://www.cnbc.com/2017/07/14/jpms-jamie-dimon-blows-up-at-washington-on-earnings-call.html
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bluejekyll
It's hard to disagree about the beuracracy and litigiousness of the country.

But that doesn't mean that he's correct that the core issue are the
restrictions put on banks 5 years ago. That is so self-serving. Remember the
banks got bailed out after the recession; but the people lost their homes.
More money has flowed to the top during this time period, making lives harder
for average Americans.

It's hard to be sympathetic to Mr. Dimon.

~~~
lend000
Who used price control mechanisms to hold interest rates low while the housing
boom spiraled out of control? (The Fed.) Who provided a loan buyback program
incentivizing bad loans? (Fannie and Freddie, pseudo government agencies.)

The 'popular wisdom' that the banks all simultaneously started acting
differently, and against everyone's best interests, including their own, is
foolish at best.

This is a nice write-up of the real estate crash, which underlies the
recession as a whole:
[https://admin.fee.org/files/doclib/houseunclesambuiltbooklet...](https://admin.fee.org/files/doclib/houseunclesambuiltbooklet.pdf)

~~~
jbooth
We had a housing crash that somehow led to _hundreds of trillions_ of dollars
missing.

Add up the value of every house in the USA. They're not hundreds of trillions
of dollars.

The banks got really creative, a bunch of people made nice bonuses, then when
their fancy leveraged mechanisms went bad, we all had to bail them out.

~~~
lend000
> The banks got really creative, a bunch of people made nice bonuses, then
> when their fancy leveraged mechanisms went bad, we all had to bail them out.

You will have to be a little more specific to discredit the economic mal-
incentives created by the government and to spin that simple narrative.

And the amount of paper wealth lost in '07-08 was actually about 10 trillion,
not "hundreds of trillions."

~~~
jbooth
The point stands at 10 trillion, thanks for the correction.

I'm not sure what you want with more specificity. You're familiar with the
situation, right? You want a book report on what happened?

Yes, the government exists, and no, a few extra loans for black people didn't
crash the housing market. This was a problem between ratings agencies,
salespeople, and financial instrument inventors.

~~~
lend000
There's no reason a person that does not work in finance should have a deep
understanding of the US financial system, but don't try to spin a narrative
without knowing what you're talking about. You should read the article I
initially posted before replying to it.

~~~
jbooth
The article you linked is way, way out of the mainstream on the topic.

That's fine and all but turning around and accusing the conventional wisdom of
'lacking a deep understanding' is a bit much.

~~~
lend000
Unfortunately, you are correct about that -- it isn't a mainstream view at
all, which is why I share it during relevant discussions.

However, the fact that a narrative with political implications is "mainstream"
does nothing for its credibility. I try to understand how these things work
and while it's a pretty nebulous domain, the factors I presented are what seem
to be the most significant I've seen in explaining the behavior of the real
estate market, and further, the market at large, in '01-'08.

We are both rightfully upset that the crisis " _somehow_ led to trillions of
dollars missing" \-- while paper wealth and market cycles are inevitable, the
magnitude and 'unfairness' of this event is clearly a problem. However, when
you then confidently assert the cause: "banks got really creative, a bunch of
people made nice bonuses, then when their fancy leveraged mechanisms went bad,
we all had to bail them out" without any details or refutation of the
explanation I posted, to which you were responding...

Well, what I read was "I'm not sure what happened but I don't like it
[rightfully so], and this narrative gives me an easy scapegoat -- an evil,
shadowy figure, of sorts -- to blame, which seems to absolve me of needing to
understand any of the mechanics involved, and which also happens to validate
my pre-existing political beliefs."

~~~
jbooth
Funny, I think the same thing about evil, shadowy scapegoats.

When we have a market crash caused by private actors trading and someone says
"OBVIOUSLY the problem is GOVERNMENT" I think they're arguing backwards from
ideology rather than working forwards from observation.

~~~
lend000
Indeed, which is why I made sure to include something different: the technical
analysis and mechanics of the issue.

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tptacek
This is transparently self-serving.

1\. The US remains one of the least bureaucratic, least regulated countries in
the west to do business. We have at-will employment, low unionization,
relatively minimal mandatory benefits, trivial incorporation, and reliable and
well-understood corporate and civil law. The idea that Jamie Dimon wanders the
Earth and finds every other country more congenial to to business is
laughable.

2\. Dimon, a Trump ally, would sorely like the US tax code tilted further in
the favor of corporate ownership and financialization. He's happy to leave out
the part about how his industry nearly blew up the world economy, and was
supported for years during the Obama administration by bailouts.

It's possible that there's good policy behind lowering the corporate tax,
which is distortive and inefficient. On the other hand: DC is "dysfunctional"
for a reason. The system was designed specifically to keep public policy from
whipsawing between extremes every time a new party took office. If he's
embarrassed to be a citizen of a country like that, he has more than enough
means to secure citizenship somewhere else. Don't hold your breath on that
happening.

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ryandrake
It's always hilarious to listen to a Harvard billionaire banker tell us what
he thinks would be good for "average Americans". Let me go find some cake to
eat.

~~~
scrumper
But it's ok to dismiss someone's ideas without consideration because of the
size of their bank account?

~~~
ryandrake
OK, then let's see what his brilliant new ideas are. "Competitive taxes are
important for business and business growth, which is important for jobs and
wage growth." Oh, what do we have here? Bog-standard trickle-down economics.

~~~
scrumper
So debate that then, instead of engaging in sophomoric ad hominem. Why would a
less litigious society, a more constrained regulatory regime, and corporate
tax rates designed to incentivize capital repatriation not help the economy
grow more rapidly? And then, why would a more rapidly growing economy not
benefit ordinary Americans?

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CPLX
I wonder if he's aware that it's the government that keeps him from being hung
by his ankles at the earliest opportunity by the world's poor and hungry as
they reclaim their fair share of the obscene level of wealth he has
accumulated.

~~~
lodi
Except that without government, the "obscenely rich" would be the ones with
all the guns and guards and such; the poor and hungry would be still more poor
and more hungry.

~~~
CPLX
It's not like we haven't tried the whole no-government thing. Guys like Jamie
don't tend to do so well.

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valuearb
Jamie's right. Imagine how much benefit the US could get if Apple was able to
repatriate its hundreds billions in overseas profits without losing over half
to taxes.

~~~
dsparkman
Would the repatriation mean more US jobs as a result? Doubtful. Apple, et al.
would not suddenly do on a hiring binge. They would also not suddenly start
paying their employees more or provide better benefits.

This is a red herring that politicians love to try and justify huge tax rate
cuts for businesses that are unnecessary but provide a good sound bite. Tax
rate cuts that they already enjoy because the US government allows them to
stash the cash overseas already to avoid the taxes.

A US citizen is forced to pay income tax on all income worldwide. Live in
France, pay French taxes and US income tax on income over $72,000. And you
only get the $72k break if you are in the country less than 30 days in a
calendar year.

US corporations, on the other hand, can stash all overseas earning overseas to
reduce their tax liability. Most US corporations already pay a lower effective
tax rate than most US citizens.

~~~
valuearb
Apple would dividend most of the profits to hundreds of thousands of
investors. Those investors will often reinvest those dividends to or leave
them in the bank, both of which drive capital investment in the US, higher
productivity and creates better jobs.

The US corporate tax rate is one of the highest in the world, making the US
one of the most costly places to invest. Taxing investment instead of
consumption is directly lowering our standard of living.

The fact that our taxe rates on individuals working overseas is stupid too
doesn't mean we should fix the corporate tax rates. In fact corporate tax
rates should be zero, as you don't want to tax reinvested capital, and if
profits aren't reinvested they are paid as dividends, and you can tax
dividends at ordinary income rates to restore progressively to our tax system.

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perseusprime11
He's probably sick of his new commute given the subway delays and transit
breakdowns.

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draw_down
No kidding. If DC were operating correctly a bunch of his buddies would be in
prison.

