Those of us who diligently follow financial forecasts know that Davos, Switzerland, host city of the annual World Economic Forum in January, is the best place to chart the direction of the economy over the next twelve months.

Rule of thumb: listen carefully to what the assembled business and political leaders are predicting, and then choose the other side. Or as American economist Kenneth Rogoff said in 2020:

“However unlikely, the most likely event is the opposite of whatever the Davos consensus is.

“I think this negative talk about MAGA will hurt Biden’s election campaign.”

It is difficult to find a single explanation for the long history of Davos attendees missing the signs of an impending global recession or confidently predicting recessions that would never come (among other errors).

But an interview with Jamie Dimonthe chairs

CEO-top executive

from JPMorgan Chase & Co., airing Wednesday morning on CNBC, offers a clue: The potentates and plutocrats come to Davos with no idea what they’re talking about.

Basking in the spotlight of a CNBC newsstand with snow-covered Davos evergreens behind him and serious, parka-clad CNBC anchors in front of him, Dimon relieved himself.

of some remarkably misleading judgments about current affairs and recent politics – what may have been the most misleading judgments about current affairs and recent politics collected in one place since Alex Jones dined alone

.

Dimon’s general view on politics was that Donald Trump was not that bad as a president, and therefore Democrats should be more careful in attacking him and his supporters. “I think this negative talk about MAGA will hurt Biden’s election campaign,” he said.

Dimon tried to get into the minds of MAGA supporters. “I don’t think they’re voting for Trump because it’s family values,” he said.

“Be honest,” he said. Trump is ‘kind of right about NATO. Somewhat right about immigration. He has grown the economy quite well. Tax reforms have worked. issues, and that’s why they’re voting for him.”

Column: The war against ‘junk fees’ is gaining ground, but the battle is not yet won

We’ll have to unpack some of this ourselves, because Dimon’s CNBC interlocutors sat silently as he gushed. When they push themselves to ask, “How is he right?” those questions and his answers did not make it to the broadcast. So let’s get started.

Is Trump “kind of right about NATO”? While he was

P

resident, he told members of the European Commission (in Davos!), that “if Europe is attacked, we will never come to help and support you,” said Thierry Breton, a French commissioner. He said Trump added: Besides, NATO is dead, and we will leave, we will leave NATO.

Trump’s repeated promise to withdraw from NATO prompted Congress to include a provision in the yearbook

D

defense

a

credits

a

ct except for any

P

prevents a resident from leaving NATO without the approval of two-thirds of the Senate. The law, including that provision, was signed into law by President Biden in December.

If Dimon was referring to Trump’s withdrawal pledge or his disparagement of the NATO treaty’s mutual defense provision, which obligates all NATO members to defend themselves against an attack on any of them, then Dimon’s statement contradicts his own view about the need to support Ukraine against Russia in the CNBC interview.

That fight “is about freedom and democracy for the free world,” Dimon said, encouraging U.S. political leaders to explain to voters why support for Ukraine is necessary. Ukraine “may be about whether the world will be free and safe for democracy for a hundred years.” Ukraine is not a member of NATO, but supporting a European country under attack is obviously incompatible with leaving NATO.

Immigration? Trump’s most recent notable comment on the subject is that immigrants are “poisoning the blood of our country,” made at a rally in December. 17 rally in

N

ew Hampshire. What makes him ‘somewhat right’ about that?

The Trump administration’s immigration policies included the grossly inhumane practice of family separation, forcibly removing thousands of children from their families this side of the southern border; As many as 1,000 children are still missing. Was that “somewhat good”?

Column: Short selling makes markets work better. Why do banks want to ban this?

In October, the Biden administration settled a lawsuit over the policy by allowing families to remain in the U.S. while they search for their children and promising to end family separations for eight years.

Dimon stated during the interview that securing the border is imperative. He was not asked about, and did not say, who is responsible for blocking sensitive immigration policies. It’s Trump’s party: The Republican Party’s caucus in the House of Representatives refuses to accept any deal on immigration unless it includes draconian provisions that would ban nearly all asylum and mandate the construction of a border wall, something that Trump himself was unable to achieve this during his four years as president.

Did tax reform work?

Undoubtedly perhaps

the 2017 tax reform worked for taxpayers in Dimon’s class and for companies like his. But there is no discernible evidence that it has achieved what its Republican sponsors claimed were its goals: growing the economy and generating so much government revenue that it would “pay for itself.”

As a percentage of gross domestic product, federal tax revenues fell after the 2017 tax cuts from 17.4% in 2016 to 16% in 2020. The tax cuts also had no noticeable effect on wages, despite promises from Trump officials that average wages would decline. increased by $3,000 to $7,000 per employee.

The study predicting such an outcome, Republican economist Bruce R. Bartlett noted in Senate testimony last May, was “more of a public relations document than a serious analysis; once its purpose was served and the legislation passed, it was forgotten.”

However, the tax cuts did have a noticeable effect on the world’s professions. The average tax rate paid by his company, JPMorgan Chase & Co., fell to 24.5% of net income in the five years since the cuts, from 38.6% in the five years before they were introduced.

It

my May

It might be true or at least arguable, as Dimon said, that Trump has “grown the economy quite well.” But there is no doubt that in many respects his record pales in comparison to that of his successor.

In the first three years of his term, excluding the pandemic year of 2020, when employment collapsed, Trump averaged annual job growth of about 289,000. In the final two years of Biden’s term, excluding the post-pandemic year of 2021, when jobs rebounded sharply from the previous year’s losses, jobs grew by an average of 481,000 per year.

Column: These 63 billionaires supported Trump, demonstrating the need for a wealth tax

One can only speculate about the source of Dimon’s views on MAGA politics. He is a very intelligent and experienced manager; No one without his ability and acumen could have been CEO of the nation’s largest banking company for 18 years and chairman for 17 years. Much of what he had to say about that period is worth hearing, especially when it concerns business and economics. and finance.

But still when issuing political proclamations

,

he sounds like someone who is out of his lane. It is not unusual for someone so skilled in one area and so wealthy to feel the urge to delve into it

split off

topics that go far beyond his field of expertise, especially when his opinion is asked by sycophantic interviewers in public. Who could resist?

That is also why the confident predictions made from Davos year after year are so ridiculously unreliable and the vision of the future so clouded.

For example, in 2022, the then-president of FTX.US, the U.S. arm of the cryptocurrency company, told attendees that the company was in a “very good place” and had so much capital that it would soon be looking for acquisitions. The following year, the founder, Sam Bankman-Fried, was accused of fraud and the company went bankrupt. That same year, Davos was certain that a recession in Europe was inevitable; it still hasn’t happened.

In 2008, no one in Davos noticed that the subprime crisis was breaking out and would therefore cause a major recession. In 2016, no one at Davos expected Trump to win the election or win the US elections

.

K

.

To stage Brexit, the departure from the European Union. The following year, Davos organizers were so shocked that they actually convened a session on why the assembled experts had got it so wrong.

The fact is that bringing together a large number of successful but self-righteous luminaries to predict the future is a piece of cake. They are wrapped up in their own world and isolated from what is happening on the ground.

They are also not used to being challenged in public. One such unusual moment occurred during a panel discussion at the 2019 meeting

Representative Alexandria Ocasio-Cortez (ret.)

proposal

by Rep. Alexandria Ocasio-Cortez (D-N.Y.)

for a 70% tax rate on income above $10 million.

Panelist Michael Dell, the computer entrepreneur, scoffed. “Name a country where that ever worked,” he said.

Dell’s fellow panelist, economist Erik Brynjolfsson (then of MIT, now of Stanford), jumped right in. “The United States,” he said. ‘From about the 1930s to about the 1960s. …And those were actually pretty good years for growth. … There’s actually a lot of economic data that suggests this won’t necessarily hurt growth.

Dell had no say. However, the panel moderator, Heather Long of the Washington Post, did. The highest tax rate

carried out exceeded

70% only “briefly, in the 1980s,” she said.

Not so. The top tax rate in the US, as Brynjolfsson said, was over 70% from 1936 to 1982, peaking at 94% in 1944-1945. And those decades include some of America’s most prosperous periods.

But is it so fundamentally wrong? This has become a tradition in the 53-year history of the World Economic Forum.