JPMorgan Chase CEO Jamie Dimon speaks during the World Economic Forum meeting in Davos. He said the proposal to cap credit card interest rates at 10% would cause an “economic disaster.” – Fabrice Coffrini\/AFP\/Getty Images <\/p>\n
JPMorgan Chase CEO Jamie Dimon limited his criticism of President Donald Trump in a question-and-answer session at Davos on Wednesday \u2013 with one notable exception.<\/p>\n
Trump\u2019s plan for a 10% cap on credit card interest rates, Dimon said, \u201cwould be an economic disaster.\u201d<\/p>\n
Speaking at the at the World Economic Summit in Switzerland, Dimon avoided taking a stance on many of Trump\u2019s policies, including immigration, trade and soured relations with Europe<\/a> 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.<\/p>\n But the head of the largest US bank wasn\u2019t restrained on a possible one-year, 10% cap on credit card interest rates. Trump earlier this month called for such a policy<\/a>, saying in a social media post <\/a>that the American public was being \u201cripped off.\u201d<\/p>\n Trump told the Davos gathering later in the day that he planned to ask Congress to pass a one-year cap.<\/p>\n Dimon predicted widespread pain throughout the US economy should the proposal go into effect.<\/p>\n \u201cWe (JPMorgan Chase) would survive it, by the way,\u201d he said. \u201c(But) it would remove credit from 80% of Americans. And that is their backup credit.\u201d<\/p>\n 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 \u2013 Vermont, represented by Sen. Bernie Sanders, and Massachusetts, represented by Sen. Elizabeth Warren. He said those on the political left \u201cwould learn a real lesson\u201d from such an experiment.<\/p>\n \u201cThe people crying the most won\u2019t be the credit card companies,\u201d Dimon predicted. \u201cIt\u2019ll 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.\u201d<\/p>\n Dimon added, however, that he didn\u2019t 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.<\/p>\n \u201cIf you cap the rate at 10%, banks will find it unprofitable and a bunch of people won\u2019t get credit cards,\u201d University of Michigan economics professor Justin Wolfers told CNN Wednesday. Wolfers is also a nonresident senior fellow of the Brookings Institution.<\/p>\n Wolfers said that while people who abuse credit cards could benefit from being cut off, others really need it \u2013 especially for emergencies.<\/p>\n The classic example, Wolfers said, is a working-class person who needs $800 to repair their truck so they can get to work.<\/p>\n \u201cBorrowing at 20% is better than losing my job,\u201d he said. \u201cNot giving working-class people access to credit is the simplest way to make sure small economic shocks have large economic consequences.\u201d<\/p>\n During Wednesday\u2019s panel, Dimon also said some questions didn\u2019t have yes-or-no answers, including if the Trump administration\u2019s foreign policy was making the world safer and stronger.<\/p>\n \u201cYou guys always want a binary answer to everything,\u201d Dimon said. \u201cIs this a good foreign policy? I don\u2019t know yet.\u201d<\/p>\n Dimon added that while he had questions about immigration enforcement actions, he noted he had equal criticism for the Biden administration\u2019s immigration record.<\/p>\n \u201cI think it\u2019s time for people to take a little bit of a deep breath,\u201d he said. \u201cThat does not mean I like it all.\u201d<\/p>\n Dimon also advocated for government action to cushion the blow of job losses due to AI.<\/p>\n \u201cAs a business person, my view is, don\u2019t put your head in the sand,\u201d he said. \u201cWe are going to deploy it. Will it eliminate jobs? Yes. Will it change jobs? Yes. We\u2019ll add some jobs probably.\u201d<\/p>\n 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\u2019t make massive job cuts leading to \u201csocial unrest.\u201d<\/p>\n \u201cI do think (the rollout of AI) may go too fast for society,\u201d he said. \u201cAnd if it goes too fast for society, that\u2019s where government and business can collaborate together.\u201d<\/p>\n Asked if he wanted governments to tell him couldn\u2019t lay off people at JPMorgan Chase, he responded, \u201cWe would agree,\u201d before adding \u201cif we have to do that to save society.\u201d<\/p>\n \u201cI think it should be done at more of a local level where someone says to a JPMorgan, \u2018Can we give you incentives to put in place to retrain these people, can you slow this down and give people income assistance?\u2019 Yeah, we can do stuff like that,\u201d he clarified.<\/p>\n