Jamie Dimon hesitates to criticize Trump… except for one plan he says will create ‘an economic disaster’

By Chris Isidore, Matt Egan, CNN

(CNN) — JPMorgan Chase CEO Jamie Dimon limited his criticism of President Donald Trump in a question-and-answer session at Davos on Wednesday – with one notable exception.

Trump’s plan for a 10% cap on credit card interest rates, Dimon said, “would be an economic disaster.”

Speaking at the at the World Economic Summit in Switzerland, Dimon avoided taking a stance on many of Trump’s policies, including immigration, trade and soured relations with Europe and NATO over his demands for the United States to annex Greenland. He even dodged a question about whether US CEOs are scared to criticize Trump.

But the head of the largest US bank wasn’t restrained on a possible one-year, 10% cap on credit card interest rates. Trump earlier this month called for such a policy, saying in a social media post that the American public was being “ripped off.”

Trump told the Davos gathering later in the day that he planned to ask Congress to pass a one-year cap.

Dimon predicted widespread pain throughout the US economy should the proposal go into effect.

“We (JPMorgan Chase) would survive it, by the way,” he said. “(But) it would remove credit from 80% of Americans. And that is their backup credit.”

Dimon also suggested testing the 10% cap in a few states before rolling it out nationally. He identified two represented by more outspoken liberal senators – Vermont, represented by Sen. Bernie Sanders, and Massachusetts, represented by Sen. Elizabeth Warren. He said those on the political left “would learn a real lesson” from such an experiment.

“The people crying the most won’t be the credit card companies,” Dimon predicted. “It’ll be the restaurants, the retailers, the travel companies, the schools, the municipalities because people will miss their water payments and this payment and that payment. It would be something else to watch.”

Dimon added, however, that he didn’t think a nationwide cap on rates would ever get passed by Congress. And some economists agree that a hard cap on rates would be a bad idea for the general public.

“If you cap the rate at 10%, banks will find it unprofitable and a bunch of people won’t get credit cards,” University of Michigan economics professor Justin Wolfers told CNN Wednesday. Wolfers is also a nonresident senior fellow of the Brookings Institution.

Wolfers said that while people who abuse credit cards could benefit from being cut off, others really need it – especially for emergencies.

The classic example, Wolfers said, is a working-class person who needs $800 to repair their truck so they can get to work.

“Borrowing at 20% is better than losing my job,” he said. “Not giving working-class people access to credit is the simplest way to make sure small economic shocks have large economic consequences.”

During Wednesday’s panel, Dimon also said some questions didn’t have yes-or-no answers, including if the Trump administration’s foreign policy was making the world safer and stronger.

“You guys always want a binary answer to everything,” Dimon said. “Is this a good foreign policy? I don’t know yet.”

Dimon added that while he had questions about immigration enforcement actions, he noted he had equal criticism for the Biden administration’s immigration record.

“I think it’s time for people to take a little bit of a deep breath,” he said. “That does not mean I like it all.”

Need to limit impact of AI job losses

Dimon also advocated for government action to cushion the blow of job losses due to AI.

“As a business person, my view is, don’t put your head in the sand,” he said. “We are going to deploy it. Will it eliminate jobs? Yes. Will it change jobs? Yes. We’ll add some jobs probably.”

Dimon, however, said governments should take steps to both offer support for those who lose their jobs as a result of AI and incentives to businesses so they don’t make massive job cuts leading to “social unrest.”

“I do think (the rollout of AI) may go too fast for society,” he said. “And if it goes too fast for society, that’s where government and business can collaborate together.”

Asked if he wanted governments to tell him couldn’t lay off people at JPMorgan Chase, he responded, “We would agree,” before adding “if we have to do that to save society.”

“I think it should be done at more of a local level where someone says to a JPMorgan, ‘Can we give you incentives to put in place to retrain these people, can you slow this down and give people income assistance?’ Yeah, we can do stuff like that,” he clarified.

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