Jamie Dimon says ‘brace yourself’ for an economic hurricane caused by Fed | Hacker News Reader

Jamie Dimon says ‘brace yourself’ for an economic hurricane caused by Fed

cnbc.com

33 pointsmemish33 comments

The title of the article is a bit misleading since it seems to imply (to me at least) that Dimon is blaming the Fed for doing something unreasonable. But in the article he actually says that the Fed (and other central banks) have to do this as the current best course of action:

> Central banks “don’t have a choice because there’s too much liquidity in the system,” Dimon said, referring to the tightening actions. “They have to remove some of the liquidity to stop the speculation, reduce home prices and stuff like that.”

edit: also OP left "and Ukraine war" out of the title...

Eh, hard to believe the fed,banks and hedge funds aren't just the same Uber wealthy orgy of big money interests. Want to contain inflation? Tax excessive market capital. The idea that having ultra wealth benefit society is a delusion.

> Want to contain inflation? Tax excessive market capital.

Isn't that exactly what inflation is, a tax on uninvested capital?

It’s also a tax on unpaid debts owed to you?

Depends on interest rate, I suppose. Variable rates help shield the creditor. Fixed rates tend to be higher to price in inflation risk. Also, you can securitize debt, which helps you hedge.

It's mainly a tax on uninvestable capital like subsistence wages and pensions. If you only wanted to tax 'excessive' concentrations of capital, a wealth tax would be more effective.

Tax the rich the rich flee to Europe.

Economy 101

Tax the ultra wealthy on the way out then. This country deserves better.

Countries are for the most part better without them. Any country that is willing to bend to the wills of a powerful minority (the obscenly wealthy) is just performing corruption or a kind of nobility with extra steps.

Evidence of how they’re mostly better with wealth flowing out?

> Tax the rich the rich flee to Europe.

Good. Maybe putin will take care of them there.

> Economy 101

Economics 101. The rich disappear. Nobody will notice. The working class disappears, the economy collapses.

That's what the anti-tax people often say but it's not economics 101; it's rhetoric 101 - say what sounds plausible with a lot of confidence.

The economics: First, people choose their locations based on many, many factors, including familiarity, investments, network, services, family, and, most of all, intertia - people generally don't move unless they have a strong motivation; generations stay in the same place. Second, many people prefer to live in communities that invest in themselves and their people. Finally, European countries generally don't have a lower tax burden.

> The idea that having ultra wealth benefit society is a delusion.

But the idea of freedom is quite good. And freedom to become wealthy is part of that concept.

I assume we should take 'ultra wealthy' as 'billionaire' in this context. We're not talking about the people that retire with < $10m or even $50m. We're talking about these people that have extracted billions or hundreds of billions from the economy and have systemically changed the rules to extract it from the middle class.

Freedom to be a billionaire at the expense of a well balanced and healthy middle class, fully funded services (health, infrastructure, education, fire, police, etc) and not having to work two or three jobs to afford housing? No thanks.

I want bridges that don't collapse. I want to pay our teachers what their value to society is. I want sick people to not go bankrupt (even with insurance), or to rely on GoFundMe to pay medical bills.. But most of all, I don't want my kids, parents, or myself to have to work when we're 80.

Billionaires are a failure of society.

Envy parading as policy objectives isn’t pretty. Billionaires aren’t the problem. Government is the problem. When people/society look to the government for solutions instead of pursuing their own interests and desires, it leads to a serious misallocation of capital and an eradication of liberty. None of these issues you raised will be solved by government. Period.

Musk did not "extract hundreds of billions" from the economy.

I did buy a few shares of Tesla. Millions, or maybe tens of millions of other people did the same. Those people made the Tesla stock go up in value. Many, many times over. Nobody forced me, or them to buy Tesla shares.

Should we benefit from the Tesla stock appreciation, but Musk not? Should we confiscate his shares? Because he's "a failure of society" ?

"Sick people going bankrupt", is that Musk's fault? Or Bezos's fault? Or Zuckerberg's or Gates'? Musk, Bezos, Gates, Page, Schmidt, Zuckerberg created millions of high paying jobs. How many people are vying to get a job at a FAANG?

Do you have a gmail account, or a Facebook account, or do you own an iPhone, or iPad, or watch Netflix? Did anyone force you to do any of these things? Then how did these people "extract wealth" from you?

It’s not easy to point to a single instance of “how” but that is not proof that it does not happen. Empirically, wealth is becoming ever more concentrated in an increasingly smaller amount of the population. This is what un-fettered capitalism leads to and it is clearly a failure in the sense that the flow of money inaccurately captures “value”. Would you argue that the masses are becoming ever more useless and that an ever more tiny percentage of the world deserves to increase their share until they own everything? Are they really providing that much value that the world should be their reward? I think not, and it is government’s job to make amends to the system in order to reverse this run-away accumulation of capital. Instead the wealthy just exert their influence on this system to make the positive feedback loop even stronger. This is not a stable system.

> but that is not proof that it does not happen

There is not proof that it did happen either. And absent a proof either way, this country has long ago decided to function on the presumption of innocence. Maybe you think it's a good idea to change that?

I’m not sure what you mean, the concentration of wealth is well documented. https://en.m.wikipedia.org/wiki/Distribution_of_wealth

People like wearing blinders because it makes them feel better about wanting to keep the status quo while it actively harms hundreds of millions, if not billions of human lives

> that is not proof that it does not happen.

Next time you should be clearer in your statements. What exactly is “it” here? In the context where you are answering my comment about the alleged wealth extraction, “it” can only mean wealth extraction

Now you are saying it means wealth concentration. That’s moving the goalposts.

Sorry, fair point. To me, they are basically the same thing: wealth concentration happens because of wealth extraction. And if anybody, billionaire or otherwise, believes a capitalist free market system allocates resources/wealth perfectly correctly to those who provide the most value and deserve it the most, then they are wrong, and by just by being wrong, they are complicit in the wealth extraction process.

In a country like Russia, being wealthy is almost certainly the same as being corrupt.

But in a country like the US, people can become wealthy without wealth extraction. Michael Jordan is a billionaire. Tom Brady is not yet, but he will become one at some point. Are they guilty of wealth extraction?

Robert Langer, the MIT professor and one of the Moderna cofounder, is also a billionaire. I got a Moderna shot, did Robert Langer "extract" wealth from me?

> And if anybody, billionaire or otherwise, believes a capitalist free market system allocates resources/wealth perfectly correctly to those who provide the most value and deserve it the most, then they are wrong,

You are saying, those who are naive are wrong.

But that goes against one of the most important principles of the US and Western word (and hopefully a principle for the rest of the world too): the presumption of innocence. I choose to subscribe to this principle.

If Bezos extracted wealth from his position, then I'd like to see him being prosecuted for that, I'd like to see a court of law decide that he is guilty, and to see that he gets his just punishment.

Gates went through that. It was determined that Microsoft abused their monopoly power, in a court of law.

Various states and the Federal DoJ have started working on a case against Google and some other Big Techs that they are violating the anti-trust laws. If it turns out to be so, let them be punished.

What you are advocating is instead a declaration of the impotence of the justice system. Lot of people are becoming rich by being bad, there's nothing we can do about that, so let's pass some laws to take them down from their pedestals.

There are a few things wrong with this. One is that you implicitly renounce the principle of the presumption of innocence. The second is that you are treating an effect rather than the cause. The third is that you'll hurt innocents in the way (like Michael Jordan or Tom Brady).

But the most important is that you subscribe to a message of hate. Bernie Sandert's "hate the rich" message is not that different from Trump's "hate the immigrants" (which is the true meaning of "MAGA") message.

Hate is a very cheap way to get votes. And hate begets hate.

> "hate the immigrants" (which is the true meaning of "MAGA")

Try “opposition to Marxism”.

Does it matter?

> But the idea of freedom is quite good. And freedom to become wealthy is part of that concept.

This is precisely how they are going to keep you right where you are while they get richer. Opportunity in a progressive economy is what is going to improve your economic situation, not the freedom of the rich to avoid taxes. Vote in your personal economic interests as they are right now instead of voting for the interests of the rich for the fantasy of the day when you will be rich. You'll never get there voting against your own economic interests. Not ever.

Wasn't Jamie Dimon one of the individuals who was largely responsible for the last "economic hurricane" and was shielded from personal financial injury by government bailouts?

"It has been widely reported that JPMorgan Chase was in much better financial shape than other banks and did not need TARP funds but accepted the funds because the government did not want to single out only the banks with capital issues."

"You know, keep in mind, though, there are a lot of banks that are actually pretty well managed; JP Morgan being a good example. Jamie Dimon, the CEO there; I don't think he should be punished for doing a pretty good job managing an enormous portfolio." - Barack Obama

https://en.wikipedia.org/wiki/Jamie_Dimon#Federal_TARP_funds

This is exactly the kind of informaiton that would be manipulated on Wikipedia, IMHO.

You can look up the 2008 banking issues from primary sources then. It's not controversial at all that JP Morgan Chase was basically the only solid bank when 2008 happened, in large part due to Dimon being practically the definition of an intellectual standup guy.

> You can look up the 2008 banking issues from primary sources then.

I think if someone is making a claim, it's up to them to support it. Wikipedia isn't great support.

> Dimon being practically the definition of an intellectual standup guy.

Dimon says a lot of BS.

You're more critical of somebody claiming Jamie Dimon wasn't guilty for insufficiently supporting their argument despite citing an encyclopaedia, than you are the person who said "wasn't Jamie Dimon one of the individuals who was largely responsible for the last "economic hurricane""

Seems like quite the double standard. Sure, an argument based on Wikipedia isn't that strong, but he made a well supported argument relative to the rest of the thread and only he is getting crapped on. Even I made a less supported argument than he did.

No, he was relatively blameless and if anything aided the recovery because JP Morgan was so rock solid he was able to buy a ton of toxic assets. Jamie Dimon made shittons of money in 2008 by buying tons of stuff on the cheap when everybody else was illiquid.

Not that JP Morgan hasn’t landed itself in a bunch of scandals between then and now but no Jamie Dimon is not culpable for 2008 at all.

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