Less than a month ago, Bridgewater founder Ray Dalio was warning the world that there would be a “revolution” unless the country could fix its income inequality problem. He’s also been repeatedly claiming that capitalism is broken.
Broken, that is, for everyone other than Ray Dalio, who was last year’s best paid hedge fund manager, according to DealBook; and since hedge funders generate the highest current income of all “workers”, he was effectively the highest paid American in 2018 (this, of course, excludes capital gains and other non-current income), when it is estimated that Dalio earned $2 billion over the last 12 months, up from a reported $1.3 billion in 2017.
Dalio beat out other big names like Jim Simons of Renaissance Technologies, who earned $1.5 billion, Ken Griffin of Citadel, who earned $870 million, David Shaw of D.E. Shaw, who earned $500 million, Chase Coleman of Tiger Global Management, who earned $465 million and Steve Cohen of Point72, who earned a tiny, by his standards, $70 million.
Of course, this raises the obvious question of whether or not Dalio is doing enough to reform a system that he rails against.
“As most of you know, I’m a capitalist, and even I think capitalism is broken,” Dalio wrote on Twitter in early April. He then defended the hedge fund business model to NPR last week, stating: “If you were to ask the pensioners and you were to ask our clients, who are teachers or firemen, whether we’ve contributed to their well-being, they would say that they, we, contribute.”
Andrew Ross Sorkin questioned whether or not Dalio is putting his money where his mouth is: “…the magnitude of the hedge fund managers’ compensation raises a very basic question about whether capitalism is ‘broken’. Even if Mr. Dalio took home $500 million, the rest of his income could pay 10,000 families $150,000 each.”
But in his latest 18-page treatise entitled “Why and How Capitalism Needs To Be Reformed (Part 1)”, published – as per usual – on LinkedIn, Dalio kicks his fearmongering approach up to ’11’, surpassing redistributive rhetoric of Bernie Sanders and Alexandria Ocasio-Cortez and going straight for Vladimir Lenin.
According to Dalio, the flaws in the American capitalist system are breeding such horrific inequality between the wealthy and the poor that at some point in the not-too-distant future, the only sensible recourse for the unwashed masses will be a bloody revolution.
To support this theory, Dalio points to statistics showing that the bottom 60% of Americans are lagging further and further behind the top 40% in the areas of education, social mobility, assets, income and – crucially – health. American men earning the least will likely die ten years earlier than those making the most.
In previous essays, Dalio has warned about the threat of economic populism (the anti-establishment trend that helped deliver both Brexit and President Trump’s stunning upset victory over Hillary Clinton). Now, he’s apparently identifying with populists of a different stripe (namely, those on the left). All of these sources of inequality, Dalio argues, represent an “existential threat” to the American economy, that will only be exacerbated by falling competitiveness relative to other nations and the “high risk of bad conflict.”
Conveniently absolving himself and his fellow billionaires of any blame for this sad state of affairs, Dalio claimed that the cause of this sad state of affairs was simply a poorly designed system that can, with a little effort, be corrected.
“These unacceptable outcomes aren’t due to either a) evil rich people doing bad things to poor people or b) lazy poor people and bureaucratic inefficiencies, as much as they are due to how the capitalist system is now working,” Dalio said.
Maybe we’re just conservative old fashioned pragmatists, but isn’t there a bit of extremely convenient hypocrisy in calling for socialism in the year that capitalism made you the best paid person in America? And, if we’re mistaken, why isn’t Dalio shelling out his billions for the cause he so loudly has been advocating for?
via ZeroHedge News http://bit.ly/2UR7vd9 Tyler Durden