Short-term thinking is causing governments around the world to make "really dumb decisions" on economic policy, according to J.P. Morgan CEO Jamie Dimon.
Dimon suggested the U.S. Federal Reserve had succeeded in averting a financial crisis in the wake of the coronavirus pandemic, but argued governments had failed to focus on policies which do not support "healthy growth" for the economy.
"There are huge fixes to income inequality. You could have negative income taxes, you could fix education, so to me, there are a lot of things we should be doing to help the poor," Dimon told a CNBC-moderated panel at the Singapore Summit on Tuesday.
Dimon claimed that 1% higher growth in the United States over a 10-year period would amount to around $4 trillion extra in GDP (gross domestic product), the equivalent of more than $12,000 per person.
"That pays for a lot of social safety net, taxes, and so, we don't focus on growth anymore, healthy growth," he argued. "What we focus on is blaming each other and we stifle ourselves, because we are unable to do very basic stuff," Dimon said at the summit, which is being held online this year.
"Again it is long-term thinking, real policy with real facts and analysis, not guessing and not looking year-over-year. The year-over-year stuff has just become a waste of time and caused us to make really dumb decisions."
The Fed has unleashed an unprecedented monetary stimulus package in a bid to shore up the markets amid the downturn from the coronavirus crisis, an effort which has seen the S&P 500 and Nasdaq notch record highs in recent weeks.
In the absence of an agreement over a fresh round of federal spending, with Republicans and Democrats at loggerheads over a new slimmed down bill, investors are looking to the Fed's annual Jackson Hole symposium this week for guidance on how the central bank may act further to soothe the markets.
President Donald Trump's administration has issued stimulus checks aimed at individuals and small businesses to help Americans weather the financial storm from the pandemic, but Dimon suggested that it was time for the federal government to up the ante.
"We knew we were going to have this great recession. What (the Fed) didn't want was a global financial crisis in addition to a great recession," Dimon told the panel. "That is where markets close down and people can't get money, so they kept the markets open, which benefited everybody."
He added that the Fed was "so wide open now" that it does not need to pump any more liquidity in the system, and should instead let nature take its course. He argued another small round of federal spending was needed to prop up small businesses and people in long-term unemployment.