Jamie Dimon ‘Hedonically Adjusts’ the Poor

Whenever I am going through a rough patch in my life, it’s nice when a friend offers kind words of encouragement, some motivational thoughts — Hey! You can get through this! — and everything eventually gets better.

Perhaps that’s what JPMorgan Chase Chief Executive Officer Jamie Dimon was thinking when he in effect told the poor — Buck up! Things are much better than you realize. Dimon, a billionaire, was speaking at an event in Detroit last week when he noted the positive effects technology was having on inequality, even with wages stagnant for so many workers for so long. “It’s not right to say we’re worse off,” he said. “If you go back 20 years ago, cars were worse, health was worse, you didn’t live as long, the air was worse. People didn’t have iPhones.”

I like my iPhone, but I had no idea it had the power to make up forthree decades of stagnant wages, especially for those workers on thelower half of the income scale. No wonder Steve Jobs was so beloved.

Things-aren’t-so-bad arguments seem to fall into a few distinct archetypes, some more much more worthy — and entertaining — than others.

The first is a pushback against the Malthusians, or the idea that humans will outstrip the earth’s resources, mainly arable land.  Morgan Housel, at the Motley Fool, offers a fine example of why we shouldn’t listen to these doom-and-gloom types.

The second type notes that regardless of how good things may be, humans tend to find the negative. When comedian Louis CK told Conan O’Brian that “Everything’s amazing and nobody’s happy,” it went viral because it was a) hilarious and b) it resonated as true.

The last type, including the one made by Dimon, is both cynical and deeply misleading . . .

 

After this column was published, it was brought to our attention that news reports on the speech in question were incomplete. The speech discussed a range of measures to reduce income inequality including skills training, strengthening inner-city schools, structuring a just immigration policy, and growing economic markets. This information should have been referenced and we regret the omission.)  

Continues here: Jamie Dimon Reduces Income Inequality

 

 

What's been said:

Discussions found on the web:
  1. rd commented on Sep 23

    There are areas in the greater NYC area where 40% or more lives below the poverty line: http://www.nytimes.com/newsgraphics/2014/01/05/poverty-map/

    So here is a challenge for Jamie Dimon. Live on $230 for a week (or if you want the entire family to join in the fun, you get $450 for the week).

    You need to find a place to live and pay the rent (you can’t use a personal assistant to locate the place – you need to go there yourself on the subway, bus or on foot).

    You then need to get groceries for the week (caviar and Bordeaux will probably not be on the menu) and cook your meals.

    You need to take the subway, bus, or walk to work in the mornings. If you are late, you will get warned that you can lose your job and your pay will be docked). If you are late more than once, you get fired.

    If you want to communicate with anyone, you will need to pay for your cell phone bill out of this money (if you have one).

    I assume this is the definition of a better life.

    • rd commented on Sep 23

      BTW – once you have rented your place, you can furnish your new pad by walking to the wealthier neighborhoods and picking the stuff up off the sidewalk that they throw out.

  2. DeDude commented on Sep 23

    Yes, If the lifestyle of the poor is so wonderful, why don’t we tax the rich down to that level. I mean why would they whine about that – its a perfectly good and comfortable lifestyle, isn’t it?

  3. CD4P commented on Sep 23

    A good read!

  4. VennData commented on Sep 23

    With a $15K minimum to get no-fee checking at Chase, you can afford luxuries that would make the Sun King jealous.

  5. b_thunder commented on Sep 23

    A few more “Dimons” and a few more hedge fund fraudsters charging $750 for a drug that used to cost $1, and in 14 months the country will indeed elect a *real* socialist President. The one who, unlike low-on-experience and new to “big politics” Obama, will not appoint people like Holder/Breuer, Geithner, Bernanke and Summers to the Cabinet, and who will do away with “trickle down” economic con.

    As someone who experienced socialism first-hand, I can testify that it’s not good for anybody. But, unfortunately, I think a quick date with socialism is warranted if it will break the “crony capitalism” system of the past 30-40 years.

  6. Slash commented on Sep 23

    I almost stopped reading at “Jamie Dimon.”

    I could type so very much here but will try to limit it to two points:

    1. Unlike the supposed usual way of people getting more conservative as they get older, I find myself feeling more and more “socialist” with every passing year.
    2. One of the many problems of our (but really, any) economy is we let the rich buy their way out of the crap the rest of us just have to put up with. Large cities (like NYC; I assume Dimon lives there) especially cater to the wealthy. The rest of us are supposed to be grateful that because the wealthy like not having to sit in godawful traffic or worry about getting mugged, we’re getting the benefit of road construction or police protection, as if the only reason to have these things is so rich people will be comfortable. Of course, that benefit goes only so far for the rest of us who can’t afford limos and private security guys. Just today in a front-page story in the Dallas Morning News, our mayor wondered why more police officers and firefighters don’t live in Dallas. He’s a former CEO at Pizza Hut (and a Democrat, so cluelessness is common to both parties among the wealthy). Just for those not familiar with Dallas, the areas that are affordable to people who make what cops and firefighters make are mostly quite cruddy. The areas that aren’t cruddy aren’t affordable for us common folk. Esp. common folk with kids. The Dallas school system is cruddy, too, with the exception of some of the “magnet” schools.
    3. It’s not arable land we have to worry about in the near future. It’s water.

    • Slash commented on Sep 23

      Or 3 points. Sorry for my inability to math.

  7. Mr Reality commented on Sep 23

    Yeah! Buck up! Oh! What’s that? You can’t buck up while I stand on your chest? Get a job, slacker!

  8. Futuredome commented on Sep 23

    The Census Board doesn’t help, when they lie about earnings however. That gives fuel to the fire for people like Dimon. The CB needs to be told to adjust how median income is delivered, because the way they do it, is incorrect. It creates the “look” of lower real median earnings, when properly using the deflator correctly, it gives the appearance of recovering median earnings amid a long downtrend.

  9. Denis Drew commented on Sep 23

    Under hedonics: as SS retirement recipients got a better buy at Best Buy or Target they would get less money for food — less money with the same overall buying power (depending what’s in your basket of goodies). Flip side of the legislation was going to ignore difference in quality if that could cut inflation adjustments in SS checks: if people were eating more rice and less pork as the price of pork rose that would be reflected in the composition of the basket of goods — with no adjustment for lower value. :-)

    • PrahaPartizan commented on Sep 24

      Yeah, under hedonics, if the population goes from a chicken in every pot every day to just bread and water daily, it’s OK because they’re still alive and available for continued abuse. It’s the French ancien regime Bourbon way of looking at the world. It will likely wind up with the same societal outcome. With the acceleration in the way things develop these days thanks to all of those cell phones and the ubiquity of guns, it might even happen in Dimon’s own lifetime. Sucks to be a neo-aristo then.

  10. WickedGreen commented on Sep 23

    So, even if environmental degradation (soil loss, species extinction, seal-level rise, severe weather, etc., etc.) is quantifiable in a way market nerds and econo-geeks can only salivate over, the “Malthusians” are to be disregarded … because the facts are too gloomy?

    In favor of what? Pure, data-free speculation about the future benefits of self-driving cars and composting apps?

  11. intlacct commented on Sep 24

    “After this column was published, it was brought to our attention that news reports on the speech in question were incomplete. The speech discussed a range of measures to reduce income inequality including skills training, strengthening inner-city schools, structuring a just immigration policy, and growing economic markets. This information should have been referenced and we regret the omission.)”

    Pretty wimpy.

    May I ask why the banksters success rate on passing related legislation on these items has been so much lower than their success rate in repealing fair value accounting (thereby ensuring their bonuses after driving the economy into the ditch)? I would suggest that they lacked motivation for the former and couldn’t really give a sh*t about the latter.

  12. tamarbucks commented on Sep 24

    I have no doubt that things are better for Jamie Dimon. Probably getting better all the time. How much does he make a minute?

    It must be nice up in that ivory tower. To preach down to all us poor fools. Maybe we can hear the sermon all the way down in the “hood”, where I volunteer tutoring math for Denver Public Schools. One of the issues I see often is that the kids don’t have a good diet – or much food at all – obviously that impacts their ability to concentrate. Such beautiful kids with no food. By Mr. Dimon’s remarks then, I suppose he would have them eat technology for breakfast.

    Thanks for the post and the commentary.

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