Billionaire Ray Diallo Says Income Inequality Threatens Our Democracy
Date Posted: Monday, April 8th, 2019
While US President Donald Trump is focused on the national emergency he's declared to secure the southern US border, the billionaire founder of the world's biggest hedge fund is more worried about losing the American dream.
Capitalism must be reformed because it's not producing enough opportunities for most Americans, creating an income gap that threatens to spark conflict, Bridgewater co-chairman Ray Dalio said in an interview airing on Sunday (Monday NZ time) on CBS's 60 Minutes.
"If I was the president of the United States," Dalio said, "what I would do is recognize that this is a national emergency." It has to come from the top, he said: "If you look at history if you have a group of people who have very different economic conditions, and you have an economic downturn, you have conflict."
While Dalio, 69, previously has focused on inequality and warned about the dangers of populism, he's started to focus on what he terms the existential threats they present to American society.
US President Donald Trump's claims that cutting taxes for the rich promotes productivity "doesn't make any sense to me at all", hedge fund billionaire Ray Dalio says.
?Dalio cited four major countries in the 1930s that "chose not to be democracies because they wanted leadership to bring order to the conflict".
While he's not saying the US will go there, it's an unfair and unproductive issue that "threatens to split us". he said.
"The American dream is lost," he said. "For the most part, we don't even talk about what is the American dream. And it's very different from when I was growing up."
The Republican idea that cutting taxes on the rich promotes productivity "doesn't make any sense to me at all" and the wealthy must pay more, Dalio said. "The important thing is to take those tax dollars and make them productive."
Dalio Philanthropies and Connecticut Governor Ned Lamont, a Democrat, announced a partnership on April 5 to improve public education and economic opportunity, with $US100 million from the state matched by $US100m from Dalio plus $US100m from other philanthropists and business leaders.
Thanks to Bridgewater's asset base and investing success over time, Dalio has a fortune that the Bloomberg Billionaires Index estimates at $US16.9 billion.
"It doesn't need to be abandoned," Dalio said of capitalism. "Like a car, like anything, a plane, a school system, anything, it needs to be reformed in order to work better."
"If you look at history if you have a group of people who have very different economic conditions, and you have an economic downturn, you have conflict."
Dalio expressed similar sentiments in an essay posted April 4 on LinkedIn. He pointed to statistics including that the bottom 60 per cent of income-earners in the US keep falling further behind the top 40 percent - and that the percentage of children who grow up to earn more than their parents has fallen to 50 percent today from 90 percent in 1970.
The income gap is about as high as ever, and the wealth gap is the highest since the late 1930s because the wealth of the top 1 percent of the population is more than that of the bottom 90 percent combined, Dalio said.
"Disparity in wealth, especially when accompanied by disparity in values, leads to increasing conflict and, in the government, that manifests itself in the form of populism of the left and populism of the right and often in revolutions of one sort or another," Dalio wrote.
Date Posted: Monday, April 8th, 2019 , Total Page Views: 892