Jamie Dimon on Iran, Trump and why he’s optimistic about AI | NPR’s Newsmakers

0:02Hi, this is Steve Inskeep with a special episode of Up First, a conversation from our sister program, NPR's Newsmakers. In each episode, we interview some of the most influential people of our time. You can watch the show on NPR's YouTube channel or search for it wherever you get your podcasts.

0:23Jamie Dimon is the CEO of JPMorgan Chase, this nation's largest bank. He's also connected to many of the wealthy and powerful in New York and here in Washington, where we spoke with Diamond and the J.P. Morgan offices on the occasion of an annual letter in which he gives his opinions about almost everything. Thanks for welcoming us here. It's good to be here. Thank you. Thanks for coming here. And I read your letter. It's really compelling. Yeah, absolutely. Every page. It is more interesting than the average corporate document because you have opinions on many topics. And that's my first question.

1:01Why do you feel you should, as a CEO, be speaking out on topics all across the news when you probably could stay silent? Yeah. So it's very important. So when I do these letters, I think to myself, what's important to the company? What's important to our employees? What's important to our shareholders? I actually make a list of questions, talk to people. I want to answer the big, important questions. And the thing you're asking about, most of it's about the company, but the last section, which is about America and the world, I always say it's predicated upon the fact that if America doesn't do well, J.P.

1:30Morgan will have a real hard time doing well, and that we have a deep interest in that. And the second reason is that policy, we shouldn't, I'm not saying the government can't do it. We shouldn't rely on government alone. Collaboration works. Collaboration works in Detroit. It worked in World War II. It worked in all these things. So I think it's good for business to get involved, to bring their expertise to bear to help all the citizens of this country. And that helps the country and your company. Do you assume that the interests of the country are about the same as the interests of your company?

1:59No, but I think that we have common interests. So that, you know, we all, if all of our citizens do better, we'll all do better. I think a lot of people come to Washington, tons of special interest groups. I think there are like 17 ,000 lobbying organizations. And they all fight for their own stuff. I'm kind of more in the camp that we should also fight what's good for the country. If the country grew faster, we'd all be better off. And people talk about polarization and things that don't work. I also think it is our job to lift up all our citizens. That is what we should do. We should be civic-minded, not just about ourselves.

2:30And banks have been doing that for years. Actually, a lot of companies have been doing that for years as part of just the normal culture. Sometimes it's local. Sometimes it's national. The business roundtable here gets involved in public policy that's good for the country, not the public policy that's good for banks or private equity or chemical companies. or pharmaceutical companies or movie companies. And I think we need to do more of that. What's good for the country? One of many things you comment on is the war in Iran. You talk about geopolitical risk. It's right up there. I know that you've said in recent days that you approve generally of the idea of the war to attack a threat in Iran.

3:04I'd like to know, though, what you think of the president's leadership in the war and particularly his recent threats to bomb Iran back to the Stone Age. Yeah, well, I'm not going to comment on that. But I want to put this in a broader context. The most important thing that we can do is make sure the world is safe for democracy. And it's being challenged today in Ukraine, Iran, North Korea, somewhat by China. I think that is probably the most critical issue. What world are we going to have the next 40, 50 years? This is a part of that. So I'm not supporting or not supporting. What I pointed out in my letter is, you know, people talk about being an imminent threat.

3:40It's not a threat. They've been killing and murdering innocent people, including innocent Americans, you know, for 47 years. They have ballistic missiles that can go 3 ,000 miles, and they clearly are trying to develop nuclear capability. I agree with the concept. They can't be allowed to have nuclear capability. And so that's what I'm saying. I'm not an expert in it. I don't know all the choices they have. I know the military is exceptional. I don't know what their plan B, their plan C is. I'm simply pointing out that you've got to look at that risk as being an enormous risk for mankind. And so I hope we prevail.

4:14And I know it causes other problems in society and the cost of fuel, the cost of oil. I completely understand I'm quite sympathetic to that. But this is a really important subject that has to be properly dealt with eventually. What are the economic risks, which is your area of expertise, of the potential destruction of this war? As we're talking, the president has just had a press conference and talked about destroying Iranian power plants. The Iranians have talked about destroying infrastructure in response. The economic blast radius could even be bigger than it has been. Yeah. No. So, again, I'm stepping in morality from some of economics.

4:49I think the morality may be more important than free and safe world may be more important. And that's hard to understand. You know, we did that in World War II. You could pay tremendous sacrifices. But economically, you know, there's tons of uncertainty. I list like tons of them out there, not just these wars, but obviously they can cause help. It usually ends up in some form of recession. You know, recession is unemployment. It could be stagflation, recession, which is the worst. It could be where it pushes inflation down. It could be short. I don't know. It may not happen at all. So I'm not saying it's going to happen.

5:20I just think it increases the odds of bad economic outcomes. And we should just be clear-eyed about that. To be clear-eyed, is there some way to measure the economic damage of this war so far? I think the best way to look at it so far is that, you know, people here are paying more for gas and might end up paying more for food. But if it ends up in the right place, you know, you've got to look at that quite carefully. So I don't know yet. You don't know yet? I don't know yet. Do you have in mind a worst-case scenario and a best-case scenario? I think the worst case is that somehow we don't get control of the Straits of Ramuhs, that we have to back out, that oil and gas, that Iran doesn't give up and oil and gas prices go even higher today.

5:59That's probably the worst case scenario. And the best case is that they negotiate something where they don't build nuclear weapons. The Straits of Hormuz has opened up and we go back to a more peaceful world. Listening to your worst case, I think I hear you saying as a citizen, the United States has to win this. That losing it would be— I don't want to go that far because that's putting words in my mouth. I don't know what all the potential outcomes are and neither do you. Fair enough. We all, after the fact, would be having strong opinions in hindsight. Even hindsight is not perfect. I say even in hindsight, you don't know history.

6:33I point out in my letter that we're still analyzing what happened in World War I. Without a doubt. Right. Without a doubt. There's a thing that's happening in real time that's particularly interesting and that relates to the financial markets. The president regularly has made statements about this war and other issues that have moved the markets. Now, that's normal. You've been around a long time. Every president moves the markets. but they've been quite sudden, quite frequent, quite dramatic. And sometimes there is news suggesting that someone profited in the moments when that happened. What do you think about when you watch that?

7:04Look, I have to deal with the world I got. So I don't spend that much time worrying about it. I think if people are profiting, that's bad. I think when the president changes his mind, I don't think it's always a bad thing. He wants to do X, doesn't work that well. He tries something different. That's okay. So I don't look at that as a terrible, terrible thing. And I think they've learned. You know, he was president years ago. He's president now. I think they've learned what works and what doesn't work. And so I hope what he does works. You know, some of that causes a confusion. In fact, it's a great lesson for those who look at the market.

7:35Like, you can see that words of a president matter. And, you know, presidents are careful. This president's less careful. He's also willing to stand up there, take questions, and change his mind. What do you think about people who are either profiting in those moments or frantically buying and selling based based on whatever the president just said. I don't know. Profiting illegally should be against the law. For us, any insider information that you trade on, whether you trade in securities or trade in the prediction markets, we told our people that is against the law. It's certainly against J.P.

8:08Morgan policy. People who just speculate on this stuff, that's different. That's just some form of gambling, and I defend your right to gamble.

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9:20Um, you say in this letter, and you've said elsewhere, the fact that the United States remains the safest investment in the world, especially in tough times. That seems true to this day. And yet at the same time, I as a layman have observed that the interest rate that is charged on U.S. Treasury bonds has gone up and up and up several percentage points in the last few years. Are we collectively doing something that erodes confidence in the United States? Yeah, again, I want to put this in a little bit of context. I really do mean what I'm about to say to your listener or viewer. If we opened up our borders, billions of people move here.

9:57They want to be American. They want to be American because of the values of America. And if you say, and I also mean this true, if you can only invest all your money in one country, and that's true for anyone around the world, what country would it be? This country is defended by the Atlantic, the Pacific, our military, the rule of law, our courts, our unbelievable innovative system. It doesn't mean it doesn't have flaws. So when interest rates are going up, generally, there's two, I mean, I hate to overgeneralize, but it's because some people think they're inflationary pressures, and there are some, deficit spending, you know, oil, gas, depending on how long this war goes on.

10:33If it ends quickly, you know, that can adjust rather quickly. And then also deficit financing. You know, we have a lot of deficit financing, and I think the world looks at that and, you know, questions it. And the whole world is doing it, by the way. Our deficit actually happens to be, I think, the largest in the world, like 6 % of GDP. And we're going to eventually have to deal with that. I don't know if that's going to be a problem, but I think those are the reasons you have the 10-year rates going up. What are the risks if we don't deal with the federal? And we're talking here just for the layman, the federal budget deficit, the federal government borrowing more every year than they spend.

11:07So the best way to deal with the problem is to actually deal with the problem, to acknowledge it, to work on it. You know, years ago, we had a solution, the Simpson-Balls Commission. It didn't get done. I wish it had gotten done. It would have been a home run for all of Americans, and it would have resolved some of these issues. So we have 60 % of our spending. I think our spending is like$6 trillion. It's almost$4 trillion is set in stone. You know, it's Medicare, Medicaid, Social Security. I think we should work on it. But I don't know. And again, I don't think anyone can predict. Does it become a real problem in six months, six years?

11:42I don't know. I do know it will become a problem. And the way it would exhibit itself is volatile markets, rates going up, you know, the kind of the bond vigilantes, the people not wanting to buy United States treasuries. It will still be the best economy, but they'll be not wanting to own a U.S. treasuries. So we should deal with it sooner than later. Maybe. And if it gets done that way, it'll be kind of crisis management, which we'll get through it. It's just not the right way to do it. Maybe you're partly answering that question. When are we going to know when we've borrowed too much, when we've gone beyond the point of no return?

12:16Usually rates going up and volatility in the marketplace. You come to Washington a lot. You talk with a lot of powerful people. It seems to me as a layman that people, when they're out of power, are concerned about deficits. And when they're in power, they cease to be concerned about deficits. I think there's truth to that. I mean, neither Democrats or Republicans have really focused on this for a while. It comes up all the time. When you walk the halls of Congress, I mean, almost everyone knows. It's just we haven't had the will yet to actually deal with it. And it's unfortunate because it can end up with a real problem, worse than it would otherwise have been.

12:52Good policy is free. And if we grew at 3 % and not 2%, that number, debt to deficit, the deficits start going down and the debt to GDP will start going down. And yet - You're saying if the economy grew at 3 % a year. Grew at 3%. And I think if we had good policy, which I mentioned in my letter, what that might be, education and immigration and certain regulations, we can grow 3%. We should aspire to 3%. We can do probably even better than that. This is the most innovative nation the world's ever seen. And so I think we should focus a little bit on that to solve the problem too, not just raise taxes or cut expenditures.

13:26I want to ask about another kind of borrowing by private companies, five giant tech firms that are called the hyperscalers. They're building out data centers and other things for more and more AI. You note in your letter, they borrowed$450 billion last year. They're borrowing$750 billion this year. When would we know when that is too much and leading to a crisis? Yeah, it's hard to tell. So we've had huge investments like that before. This may be the largest ever, if you compare it. Some of our economists have done that to other, the interstate highway program and internet or electricity. Railroads and the internet.

14:01These are fast. Now, the total CapEx in the country is like$2.5 trillion. So it's a big part of that. It's not unbelievable. Capital expenditure. Capital expenditure is how much companies invest in the United States. And so I don't know. If you look at AI in total, we're not going to know who all the winners are, how much is too much. We might overspend a little bit. But AI itself has huge potential. And the use of it is going up very quickly, very dramatically. And the greater context of stuff, and I think this is important for the younger viewers, I think it's going to cure certain cancers. I think it'll save a lot of people, you know, highway deaths.

14:39I think it's going to come up with composite materials to make planes safer. It may come up with solutions for pollution and climate. So that is the good thing. And it may reduce the work week, you know, 20, 30, 40 years from now. So there's good things. You can also focus on the potential negative ones. There's both. It's not just one. Of those things you mentioned, the most interesting one to me was your suggestion that we might have a three-and-a-half-day work week someday. Yeah. As opposed to firing a lot of people, which is the other scenario, that people would work less and maybe still be paid or paid the same amount or paid more.

15:14But the firing scenario seems like the most obvious one to a lot of people. What makes you think the shorter work week would be the way that companies would go? Yes, I wouldn't make that the solution. I think that people are going to adopt AI to do a better job with their customers. and if it does a better job for the GDP, the country will grow. I think the risk you're talking about is that, and there are a lot of jobs out there today, okay, well-paying blue-collar jobs, well-paying white-collar jobs, which are open, cyber and AI and welding and electric and all things like that. So I think the question we should ask is what, and most other major technology innovations came in slowly.

15:47It took, you know, 10, 15, 20 years for cars and electricity and even the internet. The internet in total paid off. It's just you don't know who the winners and losers were, but it didn't change jobs that much. If, and I'm saying if this changes jobs too much, here's what we all should do. We in government, business and government, relocate, income assistance, early retirement, maybe reduce the work week a little bit. Not mandate it. Let the system work. The system will adjust eventually. I just think if you look at the history of developed nations, we went from working six and a half days a week to six days a week to five and a half days a week to five days a week.

16:24to 12 hours a day, 10 hours a day, to eight hours a day. I do think that there's a good chance to be three and a half days a week. And in many years, they'll be living wonderful lives. And you could say that in Europe, they're already working four days a week. What do you think about when somebody says, on NPR, as they did the other day, one of the risks here, one of the goals here is to replace almost everybody's job. I don't like that. I don't think that's going to happen. And a lot of jobs are not replaceable. And you're going to wake up in the morning, you're still going to have to eat something and go somewhere and go hiking and talk to people and need shrinks.

16:56There are tons of jobs. And even to build these data centers, you're talking about tons of labor, engineers, people who are building this stuff, cement, steel, servers. So there's a lot of jobs. They're building whole towns next to new data centers. And this will adjust over time. The real question, if it goes too fast to have the adjustment we had in prior large technological advances, that's the real question. And we're starting to really think about which society should do to deal with that if it happens. Is AI going to eliminate a lot of entry-level jobs? I don't know yet. I don't know because we're still going to need people who bank clients.

17:35So what it may very well do is change what that entry-level job is. A lot of those entry-level jobs are a lot of paperwork. Sure. They'll be eliminated. And you can say, well, then you can do it with less people. Maybe. But I also need those people to call in clients. So that job may change. IBM is doing something really neat. They're hiring as many young people, but a lot more of them are AI experts. They've been using AI, kind of their AI native. They started with AI. So there may be jobs that we're doing so they can train people, and one day they can go, you know, be the client exec, you know, covering a large global client.

18:07Is something like that happening at J.P. Morgan? A little bit. We've always done what I call redeployment. You know, we've always been taking, you know, jobs are going up and going down. We always say, hey, Steve, we really like you. You know, here's a whole bunch of other jobs. sometimes there's no fit or you don't want to or you want to retire. But other times, yeah, we retrain, you move to another job. So there are people in our branches who are in the mortgage business. There are people in the mortgage business who used to be in the branches. There are people who want to do different things.

18:32So one of the things that J. Moore and Doveveveal is offer you great opportunities in life. You know, in the United States, sometimes around the world. And I think people, the next generation, will probably have a lot more jobs, changes in their career than we've had in ours.

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19:28Go to Lisa.com for 20 % off mattresses, plus get an extra$50 off with promo code NPR. There is a line in your letter that I want to try to decipher for someone like me. I think you're telling me that asset prices, things like stocks and real estate and so forth, are grossly overpriced. The actual language is that they're more valuable relative to the economy than they were before the 2008 financial crisis. What's happening? Yeah, there are a lot of ways to measure asset prices. So one is PE ratio, price to earnings ratios. Warren Buffett's favorite one is the total value of stocks to the GDP. I put something like that in my letter.

20:09What I said is they're not as high as they've ever been, but they're in that upper 15 % or something like that. And then credit spreads for debt are kind of low. They're not the lowest they've ever been. So what I'm pointing out is that that is not in and of itself bad, but it creates a risk if things go south. That's what I'm pointing out, that you can have a quick adjustment asset prices. Do I need to be prepared for my pension fund or my home value? I think you should always be intelligently invested. I mean, you know, if you're 100 % in stocks, I'd say, yeah, you should have something and something more concerned.

20:42I'm a little more concerned. I have, you know, short-term investments. And obviously, I have a lot of JP Morgan. But you should always be thoughtful about how you invest your money. And you should always not assume it's going to go up forever or go down forever. You know, people make mistakes when they overreact, when they overconcentrate, you know, like buy five stocks. Yeah. So you also say cities need to compete. Yeah. And you've said this before, but what is distinct here is that you name exactly one city. Yeah. It's your hometown, New York City. Yeah. And you talk about their high tax rates.

21:15What, if anything, is your message to your mayor, Zoran Mamdani? Yeah, it wasn't meant just for him. It was answering a question I get asked by a lot of people. You know, we just built a new headquarters there, which is extraordinary. And we try to take very good care of our people. individuals compete, cities compete, companies compete, countries compete. That is not me guessing. That is the truth. And when I grew up, when I was younger, Singapore was a great city. London wasn't a great city. Nashville wasn't a great city. Detroit wasn't. And I was reminded that in New York City, 60 of the Fortune 500, they had 120, 60 left in the 70s.

21:54This is a bad time for the city. Bad time. They're going bankrupt. But today, New York City's got some wonderful things. And if I was any mayor, I'd make a list of strengths and weaknesses. It's got arts. It's got Broadway. It's got restaurants. It's got a melting pot. It's got brains. It's got financial. It's got media. All great. It also has the highest individual rates, the highest corporate rates, the highest estate tax rates. And that tends to drive people out if you want to be competitive. So it's people vote with their feet. And then I point out in there that this happened before. It's happened to other cities.