When JPMorgan Chase & Co. chief Jamie Dimon flew to Shanghai this week, he probably anticipated the attention his views on U.S.-China relations would attract. But that was before veteran activist investor Bill Ackman stepped in. On Wednesday, Ackman issued an impassioned call for Dimon to enter the 2024 presidential race, challenging incumbent Joe Biden on the Democratic ticket.
“Our country is at risk of $32 trillion in debt, huge deficits with no end in sight, and a recession at a time of great political uncertainty,” Ackman tweeted, lamenting, “@ POTUS (i.e. Biden) is very weak, with cognitive decline (and) 70% of Democrats don’t want him to run”. Ouch.
“Jamie just needs a push from people he respects and from a broader constituency” to run, Ackerman continued, hailing him as a “centrist” who beat both Biden and Donald Trump. The former president is currently backed by 56 percent of Republican-leaning voters as the Republican nominee, according to one survey. A recent Quinnipiac poll.
Should Dimon be taken seriously as a potential POTUS? It seems difficult. Ackman told me he didn’t tell Dimon about the tweet in advance. But friends of Dimon say he has been thinking about the idea of being president for some time. In fact, he had already observed “maybe one day I will serve my country in some capacity” while in Shanghai. Plus, he hasn’t publicly vetoed the suggestion — not yet.
However, watching former New York City Mayor Mike Bloomberg’s unsuccessful 2020 presidential bid of about $1 billion made Dimon wary of politics. He knows he could face attacks from progressive Democrats who hate his stance on fossil fuels and his Wall Street pedigree. Then came the legal battle over JPMorgan’s financial ties to disgraced financier and pedophile Jeffrey Epstein. That timing was bad.
But even if Ackman’s experimental (Twitter) balloon bursts quickly, there are at least two reasons why investors should pay attention. First, it shows how frustrated America’s business elite (and the broader electorate) are with the prospect of another Biden-Trump mismatch.
The problem isn’t just that these two politicians — and their parties — have high disapproval rates among ordinary voters. What really upsets potential donors in both parties, based on my recent conversations, is that the Quinnipiac poll also suggests that Biden and Trump are evenly matched in the theoretical contest.
This is worrisome for American democracy, given Trump’s repeated denials of the 2020 election results. But what really alarms Wall Street is that the return of the former president could bring new economic turmoil in the form of erratic policymaking, geopolitical isolation and rising debt levels. Given that today’s geopolitical tensions are far worse than they were in 2016, and the country’s fiscal situation, the US cannot afford it.
A second reason Ackerman’s tweet is instructive, at least symbolically, is that it shows that American elites still dream that a centrist caucus can save them. And Dimon is not the litmus test here. When the Milken Institute held its annual meeting in California last month, one of the hottest topics at the financier’s private dinner was whether Democratic Sen. Joe Manchin of West Virginia could run as an independent presidential candidate with bipartisan support. People stand for election. There are no tabbed platforms.
Manchin himself seemed unsure. He told me, “While I understand that Americans are frustrated with the dysfunction in Washington, D.C., I’m currently focused on doing my job for West Virginia”. Leaders of the No Labels group won’t decide until next spring whether to launch a third-party challenge — and they won’t do so if polls show such a move would lead to a victory for Trump.
Regardless, history shows that third-party presidential candidates in the United States have been doing poorly because of the entrenched bipartisan monopoly.To understand why, it pays to reread some Sharp 2017 Analysis Published by Harvard Business School. Katherine Gehl and Michael Porter use antitrust analysis to show why America’s “political industry” is fueling this damaging extremism — despite centrist instincts shared by many voters .
“Political failure persists because the normal checks and balances of healthy competition are offset” (as they may be in a duopoly), the duo wrote, noting that “a major cause of politically unsuccessful competition is the very high barriers access, many of which are artificial and intentionally constructed to discourage new competition and substitution”. In other words, independent candidates are struggling.
But even if that makes the discussion around Dimon or Manchin sound far-fetched, the no-label should not be ignored, especially since many Wall Street donors, including Ackman, have told me they support It acts as a “choice” or “insurance” strategy. If nothing else, this shows that it’s not just mainstream voters who have lost trust in the political system; many of the ultra-wealthy also feel like political “orphans.”
This suggests that competition in 2024 may turn out to be less predictable than financial markets anticipate. Now that the debt ceiling drama is (almost) over, investors should brace themselves.
gillian.tett@ft.com