A Literacy of the Imagination


An Open Letter to Jamie Dimon

Dear Mr. Dimon:

Thank you for writing your recent piece entitled, The United States is still in an Extraordinarily Good Position.

It seems to have taken a page right out of your chat with Richard Haass at the Council on Foreign Relations event in October of last year.

I honestly can't say that I concur with many of the 'facts' stated in this article or the CFR conversation, but for the sake of a more constructive discourse, I commend you on your positivity, and will also say that you have made some very salient points about policy reform, regulatory dynamics, and even make an interesting case for 'market making'.

That said, you mentioned two critical things in the CFR talk which beg extensive exploration: collaboration and participation.

Let's assume for a moment that our debt woes can be managed, and that capital and liquidity can establish more stable foundations even in the most volatile (and seemingly unmanageable) markets like Greece or Spain. Let's say that China's systemic risk can be stabilized through its currency offsets (more like manipulations and swaps, but who's judging?), and that 'easing' can be achieved without having to print more fiat. Let's say that investments in emerging markets will include broader efforts to build infrastructure, schools, better technology, environmental solutions, etc. Let's say that America can benefit from all of this not only as an 'economy on the rebound' but also as a progenitor of innovations that drive growth and spawn alternative forms of credit, lending and investment, in addition to creating more jobs.

Perhaps the notion of 'free markets' can be revitalized, if not reinvented altogether. We can 'change the story', as you've alluded to in various interviews. If, per Joseph Campbell, metaphors are such catalysts for change, then perhaps we really are looking at a paradigmatic shift in the way the world operates, materially and euphamistically... and better yet, spiritually.

But all of this will require that banking itself changes.

Central banking, in particular, must change. Putting conspiracy theories aside, we would expect people like yourself to use their power and influence to force the hand of reform at the highest levels of economic hegemony. The protocol of banking is not so much the issue; to the contrary, investment banking is a prized discipline when used with better intentions, and was of course a key part in how this country (the U.S.) developed a market engine in the the first place. Central banking has experienced very empowered phases of existence, such as the systemic growth Canada went through in the 70s.

Yet we (the people) have been consistently let down by the calamities in trading, grand abuses of debt instruments (like derivatives) and grossly misrepresented notions of what happens when lenders and borrowers are essentially played against each other in a marketplace (call it collusion if you like). It seems that causality and correlation are confused for one another, or put into elusive positions, to which austerity measures take on polarizing perspectives. In other, more sensational and slightly horrific ways, they actually reorient the social fabric of geographies 'on the fringe'. (take, for example, the uptick of anti-semitic Zionists in parts of eastern Europe...).

— Charles Mackay

So, as to the notion of collaboration and participation, the first best question seems to be: "Where exactly do we begin?"  or "Where can we pick up from where we've left the bag dry and open?"

As it seems you are of a more 'liberal' mindset (whatever that means these days), Paul Krugman's latest take on austerity brought forward a couplet that ties directly into the pairing of collaboration and participation: interdependence and ethos.

With a roll of the proverbial dice, let's begin there. 

You won't see much mention, if at all, of Iceland's turnaround in this regard (in which the country rewrote the constitution and did away with central banks). Nor do 'new' collaborative concepts grab headlines in the States, such as Nordic 'industrial symbiosis', or phenomena such as Bitcoin's abilities to collateralize and disintermediate currency inefficiencies (as was allegedly the case with the Mercado before Brazil turned itself around). Yet, the idea that we really can move away from a canonized system of doing business, making markets and mitigating risk is prescient, if not outright studious. And it is, after all, participatory.

As you already know quite well, canonization is the antithesis of global prosperity, whether that arises from a purely institutional benefit, or one that is more equitable to citizens and smaller market operators.  Perhaps the latter is the democracy you refer to in your interviews.

As Krugman quotes in his piece: "...How strong remains the urge to see economics as morality..." the same can be said for the potential of income equality and a real commitment to prosperity.

Please don't misinterpret this: The collective or universal moralism we must maintain is not something relegated to ideology (God knows we have plenty of that), but rather an appeal to the senses. In your world, this would constitute the bottom line.

This, of course, has little to do with making money (which, as you know, is relatively easy) and everything to do with building and sustaining markets of real value (which, as a practice, is quite difficult), as well as providing far greater access to opportunities in those markets.

These, Mr. Dimon, are the attributes you describe in your article: openness, transparency, authenticity, and most importantly, trust. Whether we decide to make war, or, whether we see an economic alternative in maintaining peace. Or both.

economic context in 21c.png

What catalyzes this shift is the willingness to sit at the table with stakeholders on the ground, the real market makers, not just majority shareholders with opaque corporate agendas. This is precisely where collaboration and participation take on a new reality. That reality settles in with new responsibilities and new challenges. Take, for example, the country of your ancestry, Greece, which is plunging into a fascist state as we speak, in part a by-product of predatory bankers and fiercely corruptible legislators. No democratic ideals or social dignities to be gleaned there. Surely this must bother you to no end.

I suspect, after all the self-inflicted pains, blame games and widespread political incompetence, you see a fiscal opportunity -- not a 'cliff' as it were -- that can trump all others in recent history.

I certainly hope that is the case, because I agree with you that we aren't asking the right questions to solve problems that are far more complex than what is fed to us through news feeds and opinion pieces.

With the best intent,

Gunther Sonnenfeld