Lunch Program: A Conversation with Wilbur L. Ross, Jr., Jim Yong Kim and Jamie Dimon

20th Milken Institute Global Conference Overview

• Milestone Event: The conference marks the 20th anniversary of the gathering, hosting approximately 4,000 attendees from 48 US states and nearly 60 countries, exceeding initial registration limits despite active dis-incentives.
• Conference Theme: The central theme is "Building Meaningful Lives," focusing on how individuals across sectors (business, science, politics) can create purpose and address global disparities in health, resources, and opportunity.
• Strategic Objectives: The event is designed to support the Institute's three core pillars: access to capital, job creation, and health.
• Speaker Demographics: Of the 750 panelists, 75% were not speakers in the previous year, indicating a deliberate effort to diversify the discourse.
• Digital Integration: Attendees are encouraged to utilize the Milken Institute app for real-time agenda updates, panelist biographies, and session recaps, which include video links for missed events.
• Funding Model: The Global Conference generates the largest single portion of the Institute's operating budget, enabling year-round initiatives that often address funding gaps in areas like malnutrition and clean energy in Africa.
• Key Sponsors: Principal underwriters include Guggenheim Partners; presenting underwriter is SoFi; major sponsors include Bombardier Business Aircraft, PwC (EY), S&P Global, Goldman Sachs, and McKinsey & Company.

Wilbur Ross: U.S. Secretary of Commerce & Trade Policy

• Recruitment Narrative: Ross was recruited to the Trump administration after responding to a White House "Help Wanted" ad; he had previously met President Trump during the Taj Mahal bankruptcy proceedings and concluded the brand value outweighed the liabilities.
• Trade Strategy Shift: The administration is prioritizing bilateral trade agreements over plurilateral deals like the TPP, arguing that multilateral negotiations (which took 10 years) often result in "lowest common denominator" outcomes.
• NAFTA Renegotiation: The U.S. is proceeding with the renegotiation of NAFTA under "Trade Promotional Authority" (Fast Track), a process requiring specific congressional authorization phases.
• China Engagement: Following the Mar-a-Lago meeting, the U.S. and China agreed to a 100-day negotiation window aimed at producing specific trade deliverables, separate from geopolitical discussions regarding North Korea.
• Canada Tariffs: The U.S. imposed a 20% average tariff on Canadian softwood lumber (approx. $1 billion annually) due to violations of trade agreements, which Ross argues will have a negligible impact on U.S. home prices as lumber is a small fraction of construction costs.
• Economic Forecast: Ross expresses confidence that with the implementation of tax reform, regulatory rollbacks, and trade deals, U.S. GDP growth should exceed the 2%–2.5% range, potentially reaching historical norms of 3%+.
• Market Sentiment: Ross notes that business executives, including those with specific policy complaints, are broadly encouraged by the new administration, citing high enthusiasm even greater than campaign rallies.
• Administrative Challenges: Ross identifies Republican disunity and Democratic opposition as the primary political obstacles, noting that Senate delays on nominations appear designed to slow legislative progress ahead of the 2018 midterms.
• Personal Context: Ross, a self-described "late bloomer," entered the distressed asset business after a series of early career upheavals and served as a specialist in buying distressed companies before his government role.

Jim Yong Kim: World Bank President & Global Development

• Migration & Aspirations: Research cited by Kim indicates that internet access increases life satisfaction but simultaneously raises migration aspirations and reference income levels, creating a global convergence of desires.
• Historical Precedent: Kim references South Korea's transformation from a "basket case" considered ineligible for World Bank loans in 1963 to a developed economy by the mid-20th century.
• Healthcare Paradigm Shift: The World Bank is shifting away from strict GDP-centric metrics to invest in human capital, having moved from opposing cost-effective HIV/TB treatments in poor countries to actively funding them (e.g., the "Lazarus effect" in Haiti).
• Automation Risk: Kim warns that automation threatens to eliminate two-thirds of all jobs in developing countries, specifically targeting low-skilled agricultural and light manufacturing sectors.
• Childhood Stunting: Stunting affects 38% of children in India, 50% in Ethiopia, and 40% across Africa; Kim links this directly to reduced neuronal connections, lifelong cognitive deficits, and future economic uncompetitiveness.
• Capital Allocation: Kim highlights a global inefficiency where $8.55 trillion is invested in negative-yield bonds and $8 trillion sits in cash, urging a reallocation of this capital to developing nations where the World Bank can offer political risk insurance and credit enhancement.
• Private Sector Mobilization: The World Bank is adopting a "commercial first" approach, exemplified by the Jordan airport project (fully private, no sovereign guarantee) and Zambia's solar initiative (scaling solar to reduce electricity costs from 18 cents to 4.7 cents per kWh).
• Technology Leapfrogging: Kim cites Rwanda's drone-delivery system for medical supplies (Zipline) as an example of using AI and technology to bypass infrastructure deficits.
• Political Stability: Kim argues that unmet aspirations and lack of opportunity are drivers of fragility, conflict, and the Arab Spring, necessitating a focus on "equality of opportunity" rather than outcomes.

Jamie Dimon: JPMorgan Chase CEO & Public Policy

• Diagnosis of U.S. Economy: Dimon attributes stagnant growth and middle-class income issues to "stupidity" and bad public policy rather than secular stagnation, citing a 10-point drop in male labor participation (96% to 86% for ages 25–54) and a 70% youth ineligibility rate for the military due to health/literacy.
• Infrastructure Deficit: The U.S. has not built a major airport in 20 years compared to China's 75 new airports in the same decade; permit times for bridges average 10 years.
• Regulatory Reform: Dimon advocates for a "two out, one in" regulatory rule, specifically targeting small business formation which has hit historic lows due to compliance costs (e.g., 3,000 mortgage servicing requirements).
• Mortgage Restriction: He estimates that removing unnecessary mortgage securitization rules could unlock $500 billion in new lending, supporting 0.3% to 0.4% annual GDP growth and millions of jobs for young and immigrant households.
• Corporate Tax & EITC: Dimon supports lowering corporate tax rates to repatriate capital but equally champions expanding the Earned Income Tax Credit (EITC) to single parents and workers, viewing it as a critical anti-poverty tool.
• Business Leadership: He urges CEOs to move beyond parochial self-interest, citing the removal of the State and Local Tax (SALT) deduction for wealthy states (NY, CA) as a necessary sacrifice for national tax base integrity.
• Risk Outlook: Dimon identifies "bad public policy" as the primary long-term risk, fearing social fragmentation and "meanness" in discourse, while dismissing technology as a net positive for human longevity and work-life balance.
• Geopolitical Hedging: While optimistic about China's long-term rise, JPMorgan Chase maintains a "prepare for the worst" strategy regarding potential nationalization or exclusion of foreign entities in China.
• Diversity Success: JPMorgan Chase reports that 30% of its top 200 employees and 20% of its direct reports are women, a benchmark achieved without gender-specific quotas, relying instead on trust and inclusive promotion committees.