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This year, however – perhaps brought about by the election of Alexandria Ocasio-Cortez and the increasingly leftist speech of the Democratic presidential field of 2020 – there was also a hint of panic.
"You see people talking about redistributing wealth, because the profit for X number of employees does not exist," said Jason Greenberg, managing director of the investment bank company. Jefferies. "By popular vote or by regulatory decree, you can very easily see a a world in which the profitability of companies decreases. This may affect the rest of the pie. "
"Roosevelt was the savior of his class, and without Roosevelt we would probably have fallen into socialism," said Scott Minerd, global investment director at Guggenheim Partners. "The reality today is that we are reaching a stage where we will have very radical changes unless companies and others intervene and do something."
"If you look to the right and the left, what comes next is the class war," said Alan Schwartz, executive chairman of Guggenheim Partners, who warned that debating the merits from socialism to capitalism lead to a revolution.
In this respect, at least, the Milken participants agree with the progressive left: capitalism has left many people out of the economic recovery in America. This leads more people to consider other economic and political systems, whether it is Bernie Sanders' Soak-the-Rich collectivism or Donald Trump's populist nationalism.
However, their diagnosis of the roots of the problem – as well as the proposed solutions – could not be any different. And the analysis that Americans will deem most credible will likely determine who is leading the country after 2020.
Wealth is a problem? Or a goal to which everyone aspires?
The left, of course, has many explanations for widening the gap between rich and poor.
For the Milkenites, wealth is a goal to which all aspire, not a problem to be solved. The real problem, they say, is much simpler: it starts with bad government management and ends up better allowing people to participate in the miracle of the free market.
For example, in a conversation with Michael Milken on Tuesday afternoon, speculative funder Ken Griffin traced the discontent to what he described as housing subsidies that first hit the mortgage market – leading to the crisis. financial – then to student loans.
"You are facing a generation of students who are completely disappointed with their economic prospects, combined with the extraordinary cost of education, courtesy of the US government," he said.
Rather than reforming capitalism itself or demanding a forced redistribution of wealth, the participants at the Milken Conference generally argued for solutions that would not require the rich to give up anything on their own. . The largest banking regulators in the United States have explained how their lighter rules would help banks to contact those who did not have much money to put aside, and how their banking programs are doing. financial education would encourage the poor to progress. Public-private partnerships in all areas, from criminal justice reform to infrastructure financing, to the reorientation of traditional colleges to ongoing training for the workforce, have also benefited providing them with well-trained employees.
"My question is: should we challenge capitalism and the market to prepare people to reap the benefits of society rather than the system itself?" Asked Milken at the closing panel of the conference.
Rather than providing more funding to public schools, Mr. Milken said wealthy individuals should personally bear the costs of educating promising young people and then substantially reduce their lifetime earnings. "I am now very motivated for you to succeed because I have just invested in you," MIlken said.
Save the world without sacrificing
The same dynamic is evident when it comes to climate change.
There is an agreement with the left on the symptoms and the need to act. Extreme weather conditions will lead to drought and food insecurity, which in turn could lead to war – and the kind of geopolitical instability that drives the markets. Super Storms will damage homes and infrastructure and displace people. All of these factors weigh on the economy and, for businesses, they represent uncertainty and volatility in their supply chains.
But tackling climate change is not cheap – at least not as good as maintaining the status quo, for now. And Wall Street still does not see the risk.
"I do not think markets are taking into account the cost of climate change because we are too focused on the short term," said Christopher Ailman, director of investments for the state's teachers' retirement system. California and co-chair of the world capital. Market Advisory Council at the Milken Institute.
With regard to political solutions to climate change, while the left has proposed both massive public investment in green infrastructure and a high price on carbon, speakers from industry and conservative academia have technological solutions and individual actions that do not require anyone to reduce the consumption of energy – or production – against their will.
"Part of what is being proposed in pursuit of a green economy involves a drastic reduction of what we consider to be economic freedom," said Niall Ferguson, senior researcher at Stanford's Hoover Institution. "How do we really prevent humanity as a whole from emitting huge amounts of carbon dioxide without undue hardship?"
While apparently, the class of American investors seems to seriously question the system that made him rich, but when we put forward the solutions, they are far from wanting to change fundamentally.
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