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The founder of billionaire hedge fund, Ray Dalio, said at a conference last week that capitalism no longer works for the majority of Americans, and added that the current US economic and political system was in danger.
Speaking at the Web Summit in Lisbon, Portugal, Dalio said that inequality of opportunity and wealth was the biggest problem in the United States. He went on to explain that the election of populist politicians like President Donald Trump was a key symptom of the disease of capitalism.
"The poorest 40 per cent of the population could not raise USD 400 in the event of a medical emergency," he said. "We are facing a wealth gap in which the bottom one-tenth of the net worth is equal to the bottom 90%." Many voters, he said, "felt the system was not working and that there was populism here. and populism around the world. "
A perfect storm of technological growth, globalization and the accumulation of financial assets has led to an incredible wealth disparity in the United States, Dalio said. The obvious solution, he said, is to declare the wealth gap as a national emergency.
This stratification also applies to public education in the country, according to Dalio, turning the problem into a cycle that is perpetuated.
"There is an educational problem that is related to the way the constitution is built," he said. "The constitution has decided that states are responsible for education and that in the state it is often the fiscal district in which you support public education. You will see that the wealthiest tax districts have better public education than the poorest districts. "
However, Dalio does not advocate democratic socialism or an alternative to capitalism. Instead, he thinks the government should consider associating with private enterprise, a classic conservative argument.
"The most urgent problem I see right now is the gap in polarity between wealth and opportunity, it's the main source of conflict," he said. "US leaders should declare the opportunity gap a national emergency and find ways to invest in this area through public and private partnerships."
Dalio, the richest man in Connecticut and founder of the Bridgewater Investment Company, said Fortune Magazine in January, this populism "scares" it because it distorts the markets and leads to extremism, leadership and political instability. "Populism is the main economic problem that market players should monitor, more important than central banks," he said.
He predicts that we are behind in our current economic boom and that the 2020 presidential election will be largely determined by the state of the economy. "Will we slow down before the next presidential election or not? Because it will have a big impact on the issue, whether left or right, "he said.
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