Transcription
Jamie, thank you for doing this. Thrilled to be here.
>> Uh, you've been writing for many years about the American dream and its troubles. It's fraying. It's struggling. What happened?
>> Yeah. Well, first, put it in context. We have the most prosperous nation the world's ever seen. Decade after decade, almost everyone's done better. However, in like the last 20 or 30 years, if you look at, you know, just the fact like the lower third income is, and it's really there was focused on, their incomes didn't really go up very much. They struggle more. If they, if you live in inner cities or certain rural areas, your schools aren't very good. I tell a lot of people here, you don't go home and worry about crime. You don't worry about your kids' schools, but there they do.
>> And >> they only the lower third because, you know, we we do polling at CBS and you know, three out of four people say it's harder today to raise a family, buy a home, and find a good job.
>> Yeah. No, I think that may be true. I shouldn't say only the bottom third. There's the maybe part of the middle income segment, too. So, uh, but all those things are fixable. I mean, I one of the things I talk about is that we had growth of in our country is 2% a year for the last 20 years. Had it been 3%, we've had $20,000 per person more GDP. That would have paid for an awful lot. Why was it only 2%? And I think it's we have tons of bad policy that we made it worse for growth in America. And growth is what creates everything. Capital formation, capital R&D, investment, productivity. So, if you go to like these inner city schools, they're not teaching kids skills. They give them a good paying job. And there are solutions to most of this. So, uh, but but I think it's a wide variety of things that didn't that we got wrong.
>> Well, you you mentioned capital and growth. There's polling recently that finds only about half the country even has a positive view of capitalism.
>> Yeah.
>> And more than a third of people have a positive view of socialism. Do you understand why?
>> I'm not sure I do. I just think it's dead wrong. And, you know, the fact is capitalism has lifted billions of people out of poverty. And like a lot of things, it may have flaws. I think I hear a lot of people sometimes talk about the flaws of capitalism. I realize they're talking about the flaws of human beings. Some people are selfish, some are self-centered, some are this, some are that. That's true in a communist society or a capitalist society. Some businesses do bad things, and that's not because of capitalism. And so, you know, we try to have laws and regulations that get the best out of people and, you know, get rid of the worst. But we just we've been educating people over and over that things are bad.
>> And if you look at them, they're not bad. They're living longer. They're everyone's got air conditioning. Their cars are safer. But I do think it's become much more of a struggle.
>> And so, and I we really should focus on I always ask the question, why? Well, why are inner city schools failing the kids? You know, you could say real estate taxes because they don't have the same taxes to pay for the better schools. How come these schools like the aviation high school across the 59th Street bridge here, these kids graduated at 17 or 18 making $75,000 a year because they were given skills to, you know, maintain their say an aircraft?
>> And you know, >> but for a lot of people, it's about how much money they're making. Uh, can they go on vacation every year? Uh, can they expect a better future for their kids? Can they expect a retirement with decency? And can they own a home? These are the core components. When I talk to regular people, we travel all over the country. You talk to regular people about someone like yourself, a business like this one doing really well. The real simple question they have is, why couldn't a business like this just take a little less so that other people have it a little bit easier?
>> I don't think that would solve the problem at all. And, you know, we don't we only try to earn a fair return on our capital. We're not trying to take anything with anybody. I think which solves the problem is we build more affordable housing. The reason we're not building more affordable housing is because local zoning requirements and mortgage origination, mortgage rules have made it so expensive to get a mortgage. We could reduce the cost of that mortgage. I think the way you fix the problem is by fixing inner city schools. We already spend a trillion dollars or some number like that on K to 12. You should be asking this question, the trillion dollars, what, why can't it work better? So, my view is these programs failed. So, why can't we build programs that don't fail? And uh
>> so the answer to that, why can't we? It's policy. And I think good policy is free.
>> Policy or is it politics?
>> I uh, that's a good question. I mean, you're you'd be more of an expert in politics than me. Definitely not. But but I make a list of bad policies like schools. I like I think we should double your income tax credit.
>> So, if you're making $14,000 a year with two children, the government gives you $6,000 or $7,000 at the end of the year. I would make it $10,000. I'd get rid of the child requirement. So, if you're a couple, you're both working, you're at a minimum, you're making $48,000 a year. And that has the virtue of going into their communities, probably helping schools, get the tutors, maybe buy some more health insurance, uh, the dignity of a job. The first job leads to a second job. Uh, and it's got much better social outcomes. You know, more families, less recidivism, less crime, less drugs, less suicide. So, we have a lot to do to fix parts of our society. We should get at it and roll up our sleeves and acknowledge what the problems are and fix them.
>> How does this initiative that you're announcing today solve it?
>> Yeah. So, we, you know, we've always done, we think our job is to finance society. You know, small businesses, large businesses, individuals, home ownership. You know, we're one of the biggest in the country across the full spectrum. Uh, but but we asked our own people when we have the problem, I always ask, okay, for got it, what are you going to do? And so we asked the people about round the Ukraine, American dream, what can we do more? And we have that long list. Small business, where we go from banking $7 million to $10 million. We are small business consultants. So, if you're a small business and you want to know where to build your second restaurant, how to negotiate a contract, we have people can consult for that. Now, we had a thousand small business bankers. We're now in all 48 states. We have a rural state strategy, which we did not have before. We're going to do skills. So, I just mentioned about schools and things like that. We're going to do 25% of our branches are in lower income neighborhoods. And we, we have, we call community branches. Some of them, we invite people in to learn about saving money with a mortgage, buying a house. Uh, um, we call them vital institutions where we, we are probably one of the largest banks in the country to cities, schools, states, hospitals, but to do more of that. We're one of the biggest affordable lenders in the country. We're going to do more of that. So, it's just kind of we're going to make it a crusade to do our part to do more for this part of America and try to help lift up all of society.
This particular moment in time, people are already feeling the pain. And now we've got a war in the Middle East that's driving up costs for diesel fuel, for gas that trickles into all kinds of other things. Where do you see this going economically?
>> I don't know. You know, the the economy is one big complex beast, and even AI [clears throat] can't figure it out. I tell people anything that happens is like a straw in the camel's back. So, maybe one day the straw is going to cause that tipping point and push us through a recession. Hopefully not stagflation. So, the war is a couple of straws in the camel's back. It whether that causes a tipping point, I don't know. I think what's more important for the future of the world is that this war successfully concludes. I mean, you know, I hear a lot of people on TV talking about it wasn't an imminent threat. No, it wasn't a threat at all. They were actually killing and murdering people around the world for the last 47 years. They have a ballistic missile that can now go 3,000 miles, which I think was a surprise to the American public. And they were very close to having nuclear weapons, you know. So, I that's really important. Obviously, the, you know, the gas price is going to hurt, you know, some folks. I that's very unfortunate. So, the sooner it gets properly resolved, the better.
>> So, the people who feel like we're already in a recession, to them you say, no, we're not.
>> No, I think I think it is for them.
>> I think it's for them.
>> Oh, absolutely. I mean, there are parts of society they're not doing very well, and I completely acknowledge that.
>> the war is at a crossroads. Iran continues to control the Strait of Hormuz. Does America need to take control of that strait, reopen it before the war ends?
>> I don't know the answer to that question.
>> You said finish the job earlier, complete it is what you said.
>> Yeah, I have to be a little humble here. I don't know what the military knows. I do know they're quite smart. So, if you speak to some of these folks, they've been planning this for years. They've got multiple plans on the books to do things, including Car Island, Straits of Hormuz. Uh, I think it's going to be hard to leave and have the Straits of Hormuz closed. I do think it would be a real problem for the global economy.
>> Iran would have a veto power over basically traffic. But when you said uh the biggest threat now is that the war isn't completed, what do you mean by that? What do you have in mind?
>> Well, I think for I this I've thought this since the war in Ukraine started that the world is not a safe place. It never was. We were lulled into a false sense of security until the Russians invaded Ukraine. And at that point, we already knew that, you know, Russia, Iran, North Korea, somewhat aided and abetted by China, have different plans for the free and democratic world. Let's talk about affordable housing. One of the key parts of this initiative of yours. There's a plan right now in Congress to potentially prevent large investors from buying up single-family homes. Do you support a ban on that kind of investment?
>> I hate to tell this. It's basically irrelevant. It's not it only I think they're doing it in 350 homes, only 1% of the homes owned by, you would call large companies. So, I I don't think it's going to change any calculus. I'm not sure it's great because some people want to rent their homes or not, and these so they go in, they put in money. I probably wouldn't do it, but if it gets done, it's it's okay. If you want to fix affordable housing, you can change rules and regulate around mortgages that would reduce the cost of mortgage by 30 or 40 basis points and not create any additional risk in my view and take affordable housing laws, mostly local, sometimes state, and, you know, don't lard them with job programs. Let people build them. You know, they're if you read the list of ridiculous rules why it can't get done, you can build a lot more starter homes and starter apartments that people could buy a lot cheaper all over the country. And there are some people doing it well. I can send you the list of what cities have got it together and they're building stuff. And you like in California, I think I read it's 50% more to build quote an affordable home than it is in Nevada because of those rules and regulations. So, there's a lot of things to do to fix it. That's what we should be doing. That'll make a much bigger difference than limiting what, you know, big uh private equity guys can do.
>> Let's talk about uh AI. You've talked a lot about it in recent months. You've admitted that it could reduce jobs and it could reduce jobs across the economy somewhat quickly, too quickly.
>> How concerned are you really about the potential for, as you put it, social unrest, even revolution?
>> Yeah. So, this is where I'd put it. Uh, in the context for all of us. I believe that 30 years from now, a lot of people, your kids are probably working three and a half days a week. They'll probably live to 100. And a lot of the diseases afflict a lot of us, they won't get. They'll be cured of cancer. Cars will be safer, planes will be safer, life will be better. You can hike more, do all the things.
>> You're talking about the Jetsons from the 1960s. Kronhite anchored a special about how the future that we're living in right now was supposed to be what you're saying.
>> No, this is going to happen. I mean, the world is getting very productive. AI is going to do that. AI is going to cure cancers. It's going to come with better materials. It'll cure a lot of stop a lot of car crashes. And so, I think that is happening. Okay, it's going to happen. The risk is if it if it is too fast.
>> right?
>> I don't know if it's going to be too fast. Here's my mind. My mind is is that there's a risk for it. So, let's plan for it. So, if it happens, we're more prepared. That's what I'm saying.
>> How seriously do you worry that AI could sweep through the job market so quickly that society takes a real hit?
>> I think there's some risk to that. I think you should that my again my view about risk isn't to guess what's going to happen. It's to look at the range of possibilities and say, can you handle them? And what would you do if so? If you're reading my ch I always talk about that here's the range. here's a range of possibilities. I may put different odds out of it than you do, but I want to be prepared for it anyway. And so, you know, the good and the bad. I'm not trying to do just one. So, I I I don't think AI in the long run will create huge benefits for society if it causes a problem in the short run. Let's be prepared.
>> And the reason I lay around this is because there are millions of people in the middle of their life with young kids, aging parents, maybe they have a mortgage if they're lucky, and they're looking at potentially being axed out of existence professionally. What do you say to those people?
>> I think we live in the most prosperous nation the world's ever seen. And for the most part, when we had a technological disruption, the system worked to create new jobs and new labor. There's tons of shortages in labor. So, you go I go to talk to all these companies too. You should ask them, they don't have enough welders. There's not enough cyber. There's not enough in certain parts, not enough advanced manufacturing. There's not enough. Matter of fact, we're doing the security resiliency initiative. One of the people say is I don't need the plant. I need the people who can work on the plant, and I don't have that. So, there [clears throat] are solutions, and that's what we should worry about is let's wor and I and I sympathetic for people worried about that. We government, business collaborating should come up with solutions. You know, to cry and spill milk isn't going to fix it. Solutions might fix it.
>> It's it's a tough that's a tough diagnosis for a 45-year-old who's thinking about
>> I I agree.
>> Yeah.
>> I I think it'll be okay, but you must be prepared.
>> You grew up in Queens, Jericho, a jungle gym not far from here. I think we could probably see it from the window.
>> Yeah. Uh, for the kid in Queens now or in a similar neighborhood anywhere in the country, what does that kid need to know? What do you teach a child today to prepare them for this world we're talking about that's going to exist?
>> Okay, I I'll answer that. I'm not sure if it was right. Learn to think. Talk to everybody. Be have deep curiosity about the world. Read read opinion writers on the left and the right. Learn to think all the time. And then learn to have EQ. EQ is, can I communicate? Do I have heart? Do people trust me? Can I, you know, that great thing I sorry I wrote you such a long letter, I didn't have time to write a short one. Learn to write, do the short one. Learn to travel. Learn to open your eyes. Don't get weaponized. Don't always think you know. And when you work with people, you know, you see sports teams, you've seen when teams are humming, they're all working together. Learn to do that as opposed to pound your chest, it's all about you. Learn to have a work ethic. Learn to have a purpose. All those things, you will have a great life. Those are the things. Their lives are going to be more complex than ours were, but basically, you're younger, but because I think they will have more jobs than we had. They'll have they'll move around a little bit more, but I think they'll have great lives. And but learning, learning, I think, is probably still the number one thing to do.
>> It sounds like another way of saying get off your phone.
>> Yeah, I would say that. Yes. And I've always told to my kids like that that is not going to make you smarter, though. A lot of them now read newspapers on their phones and things, but
>> Yeah. Well, my my 16-year-old feels like he's going to business school because he's getting fed the algorithm business tips on. I don't think it's working.
>> It's not the same thing. [laughter]
>> Let's talk about prediction markets since we're looking at the future. Can you imagine JP Morgan being involved in prediction markets, taking positions in them?
>> Maybe we've just already asked this question. So, for example, when you buy stocks, you know, I really pick, you know, high book value, high this, fast P growth, all these various things. You can do the same thing in a prediction market on a JP Morgan like I want to be an owner if they do X. I don't want to be an owner if they do Y. So, you're dividing a stock into little pieces. So, it's possible one day we'll do something like that. We're not going to be in sports. We're not going to be in politics. There a bunch of stuff we won't do. And obviously, we have strict rules around inside information. You cannot use inside information at all for any reason, including prediction markets. We're going to make that clear to our people here.
>> I It's It's amazing.
>> We're studying this about how this is going to work. It is kind of an amazing development.
>> It is an amazing development. I mean, because for a lot of people, they look at it and they think it's just a it's it's gambling basically. You don't see it that way.
>> Well, no. People have been gambling forever. I mean, you probably bet in sports games, you I don't
>> No. When you were a kid, you probably bet on poker and your kid and you might have bet with your friend who can win the presidential elections. It's been going on a long time. People any every country I've ever been in, people gamble. Some people's not. I I have a brilliant friend who does the horses, and he is brilliant. And I'm like, why are you doing that? And he likes it. You know, you find it very intellectually challenging. And uh, so I'm not against it. I'm against it if it's an addiction that ruins your life type thing.
>> Yeah.
>> I'm I'm a little bit of a libertarian. You have the right to do what you want the way you want. You know, just take care of yourself.
>> But I get what I'm asking is, is a prediction market more like gambling or is it more like investing?
>> I think for the most part, it's more like gambling. But there are areas where you could say no, it's investing. You you you're deeply knowledgeable. You're taking the other side of a bet. Uh, and you think you're, you know, you know better than the other person.
>> Yeah. Let's talk about remote work. One of your favorite subjects. I know you're not a fan.
>> I know why you're not a fan, but is it based on your own experience? Is it anecdotal? What kind of data are you looking at suggesting being in the office is really better?
>> Yeah. So, we've always allowed. We've always had 10% of our people working remote. I'm not against remote. Okay. And uh, and it works. Like we have virtual call centers now in Baltimore and Detroit that are excellent. So, I'm not against it. I'm against it where it doesn't work for the company and the clients or the individual involved. And also, in a free market, you could build a company and go all remote, and I could build a company and say we're going to the office. There's nothing wrong with that either. We said in the office because, and I'll give you a couple of examples for younger people. It's an apprenticeship system. You know, you learn your skill because you probably were a young reporter helping someone do other stuff, watching how they handled issues, watching they handle tough questions, watching it's an apprentice system. We saw people when they weren't coming in, younger kids, kind of being left behind. They weren't they weren't developing their EQ as much. They didn't have as many friends. They didn't have much knowledge. They weren't being assigned stuff. In fact, someone went so far to say to me, "We shouldn't allow some of these kids to come in because it's unfair." And I'm saying, "Really? You're going to tell kids they can't have an ambition?" And so, uh, then then management, and this is a big one to me, for any manager, I want to be accessible to my people.
>> I'm accessible all the time.
>> This remote thing, what happens is people say, "Well, I can't get him. He's uh doing here." And I was calling people up and they say, "Well, he's out. Tony's out on a walk or call a cell phone or and then it also creates, in my view, a lot of politics when you're on Hollywood Squares."
>> Yeah.
>> You know, instead of having a direct conversation, I could say that's not what I thought exact and exactly why people are on their phone, [snorts] they're texting, they're watching a movie, and it it became outrageous to me, and eventually I said, we're just not allowing it anymore.
>> But is that
>> We do allow some. We and and flexibility is a perfectly reasonable thing. So, we learned in COVID that flexibility is great. We allow much more flexibility, particularly for caregivers, mothers, fathers, taking care of an older parent or something like that. But we think we're going to run a better business, do a better job for customers, share more information. It's like a neural net. JP is a neural network.
>> You know, and that neural network starts to break down a little bit when you can't get a hold of people. And so
>> Is that based on data or based on your feeling?
>> A little both.
>> Okay.
>> Yeah. But like I said, you could build a company one way, and I could build another company one way based on a feeling. It's a free market. If you don't want to do it by my company, don't. If you don't want to do it your company, don't. But I I'll tell you one thing. We would crush you. [laughter]
>> Jamie. Thank you very much.
>> Thank you. Appreciate it.