11 ms·

Hedge-fund billionaire Ray Dalio says capitalism is failing America

139 points by howard941 8y ago

williesleg 8y ago
Yay! Let's fix the world! But wait, most here can't even fix themselves!
mises 8y ago
People who have already made their money love to call for this sort of thing. They're rich enough to be insulated from it; it hits those who might actually try to get rich in the future.
- almost_usual 8y ago
  This doesn't make sense. If capitalism were to end tomorrow he'd lose everything.
  - tejtm 8y ago
    By this same sense can we also conclude that due to capitalism approximately 99.99999% will never find anything?
- vkou 8y ago
  So, if you're poor and criticise capitalism (or some particular implementation of it), you're just a sore loser, and if you're rich and criticise it, you're a hypocrite?
- onemoresoop 8y ago
  What do you mean people who have already made their money love to call for this thing? The author is a billionaire who is is proposing for the wealthy to be taxed more, how is he insulated by paying more taxes? Those who want to get rich in the future might be helped by measures to create more income equality thus creating more social mobility. Equality doesn't mean everybody makes a same amount of money, but more like the ability for everyone to make more. When the mega rich own everything this is not possible. Or perhaps, you dream of being mega rich yourself and want things to stay the way they are now so you can make it?
  - navigatesol 8y ago
    >The author is a billionaire who is is proposing for the wealthy to be taxed more, how is he insulated by paying more taxes? Is this a serious question? https://en.wikipedia.org/wiki/Panama_Papers https://en.wikipedia.org/wiki/Panama_Papers Ray Dalio has taken his chunk, is retiring, but senses the social and political winds are changing. Being a billionaire is no longer something people "respect", and is very rarely "earned". I'm sure he doesn't want the Proletariat knocking on his door in his old age.
  - mrfredward 8y ago
    There's an important nuance between income and wealth here. Income tax takes money from the people who are still going to work to build their fortunes (and those who are just getting by). The ones who have already made a fortune are only worried about the capital gains rate. Billionaires who advocate for higher income tax, but not a higher capital gains rate, are just pulling up the ladder behind them. The article isn't explicit with what Dalio is advocating for here.
    - dondawest 8y ago
      You’re adding an incredibly relevant layer of nuance. Dallio’s plan is vague so his true intentions are illegible. People ascribing positive AND negative sentiments to him need to actually understand the policy changes he’s proposing (I.e. higher income rate vs capital gains rate) before passing judgement — and since he specifically has left it vague, I don’t see how anyone can judge his plan either positively or negatively: he has not even presented a specific plan!
  - will_brown 8y ago
    >The author is a billionaire who is is proposing for the wealthy to be taxed more, how is he insulated by paying more taxes? Maybe it’s in his proposal but I didn’t see any mention of bringing back the estate (death) tax on the rich or increasing capital gains.
  - tathougies 8y ago
    Raising the highest tax bracket has historically resulted in less tax being paid by the rich. This is because it increases the demand for services and banking instruments that lower tax liability. Because higher taxes mean more rich people are seeking to shelter their assets, businesses can start to offer these services which are typically not very profitable because there are larged fixed costs and not enough market demand. However, increasing demand for tsx shelters by raising the rates make these businesses profitable. Thus, a rational billionaire seeking to shelter their assets via companies catering to the rich has it in his or her best interests to call for higher rates. It is clear that these people are uninterested in paying higher taxes as it is completely legal to pay more taxes without any legislation. Thr website pay.gov accepts money for those who would like to contribute to the operations and debt costs of the united states government. Until buffett and others make actual extra tax contributions to the government (as opposed to their own private charity), I'll continue to ignore them
- chalst 8y ago
  People who are very rich usually want to be clubby with other people who are very rich. The super rich who talk in concrete ways about how to tackle the failures of capitalism are relatively rare.
  - onemoresoop 8y ago
    They realize that if the whole house of cards collapses they're loosing the most. If the house of cards (the system) is stable they're better off as well.
    - seleniumBubbles 8y ago
      This seems to be the deeper reason why many wealthy people begin leaning left publicly after amassing their fortune. The very same people can often be seen years earlier making statements that could come out of an Ayn Rand book, but when they’ve beaten the game, the risk-mitigating option is to become “the people’s billionaire.” Im afraid it’s not a change of heart, it’s simply the most logical decision for someone whose wealth is locked up in institutions governed by a democracy.
    - kevas 8y ago
      Are you sure about that? Well... for Dalio, he's an investor that is always looking both forward and backwards. He's looking backwards to see what's happend in the past and how economy/society has reacted. He's looking in the future to see how he could best take advantage of signals he sees.
- maxkwallace 8y ago
  If you flip it around, it I think it's also entirely reasonable that many of these people only feel like they can criticize things after they've made their money. Or they know we wouldn't listen to them beforehand. I'm not sure what you're criticizing but Dalio's post is explicitly about economic mobility, i.e. reducing barriers preventing more people from getting rich in the future.
  - toomuchtodo 8y ago
    Then Dalio should put his money where his mouth is and support political candidates who champion public policy that mitigate the inequality issues he draws attention to. Talk is cheap.
    - m4r35n357 8y ago
      So freedom of speech is bad and political bribery is good?
      - toomuchtodo 8y ago
        Campaign contributions are speech. Saying one thing while doing the opposite is fraud.
      - rchaud 8y ago
        Nobody positioned this as a 'freedom of speech' issue, except you. He's entitled to his words. The public is entitled to see said words as the hypocritical doublespeak they are.
  - engineerworks 8y ago
    And many don't want these changes because they also want to make money before things change. This is one reason such change is not going to happen any sooner unless money stops mattering anymore.
- chungleong 8y ago
  One would expect greedy people to be acquisitive in regards to moral high grounds as well. They have to have it all.
- i_am_proteus 8y ago
  Indeed. Many of the reforms he suggests would work too cement the existing economic classes. Obviously, this benefits those who have the most. Does anyone know if there is a term for this? It's a bit reminiscent of 'regulatory capture' but that doesn't seem quite right.
  - joebadmo 8y ago
    Pulling the ladder up behind you.
- bwanab 8y ago
  If we're going to err, we should err on the side of taking the guy at his word. He wants to raise taxes on himself to provide for better distribution of income and educational opportunity. Where's the problem with that?
  - rchaud 8y ago
    > He wants to raise taxes on himself Where did you read that? Tax policy is ludicrously complex by design. Simply saying "we should pay higher taxes" is broad enough to be meaningless. Increasing income tax for example would barely make a dent in their take-home, because the majority of their wealth comes through capital gains tax. Not to mention the numerous documented loopholes in the tax system that allow people in Dalio/Buffet's position to move money around the world at a moment's notice and pay nothing in federal tax. The loopholes are there, but they never get fixed, thanks to lobbying from the big 4 audit firms that depend on blue chip clients like him to fatten their paycheques. Just because Dalio has an arms-length connection to the dysfunctional tax system doesn't mean he;s ignorant as to why the system is the way it is.
- empath75 8y ago
  This is pure ad hominem and says nothing about the substance of his argument.
- nategri 8y ago
  Who was it that said no one in America is poor, they're just "temporarily embarrassed millionaires"? This comment is a pretty good representation of that sentiment.
- danans 8y ago
  > They're rich enough to be insulated from it This is solved by taxing very high wealth, not just very high income. > it hits those who might actually try to get rich in the future. Not those who try, just those who actually get very rich. None of the current tax increase proposals target the wealth or income of even slightly rich people (low millions of net worth or low 100ks of income), just the very rich (> 50mil net worth). That still leaves a ton of room for incentivizing getting rich below that number.
- brycesbeard 8y ago
  Or they realize the problem isn’t fixed if they give away their money. It’s structural — why give up what you’ve gotten if it won’t fix anything? IMO, calling for higher taxes is the same thing to do, rather than performing some sort of empty virtue signaling.
- rchaud 8y ago
  > it hits those who might actually try to get rich in the future. How does it do that? These are just words. Dalio and his hand-wringing clique have no issue speaking platitudes about economic justice, and turning right around and lobbying politicians for more tax cuts, less regulation and fewer consumer protections. How are you going to get rich in the future when real wages for consumers haven't budged in 4 decades? Do you plan on delivering a product people can actually afford, or simply engage in the financial chicanery that made the 2008 recession possible?
onemoresoop 8y ago
here's the outline for Dalio article: https://outline.com/GHeFsV https://outline.com/GHeFsV
deleted 8y ago
[deleted]
save_ferris 8y ago
His fund's political donations don't align with what he's proposing[0]. His firm's largest 2018 donations were to Tom Cotton(R-AR) of AR and Tim Kane(R-OH), neither of whom would dare support these ideas. He can stand up and talk like a leader, but until he's willing to financially back candidates who are genuinely interested in solving these problems (which likely means backing a candidate against his own financial interests), this is all hot air. [0]: https://www.opensecrets.org/orgs/toprecips.php?id=D000032123&cycle=A https://www.opensecrets.org/orgs/toprecips.php?id=D000032123...
- maxkwallace 8y ago
  Thanks for the link. I think things are more complicated than what you've said. There may be good reasons to donate to a candidate who wouldn't support these ideas if that donation could nevertheless help sway their views on the issue. Opposition isn't the only strategy in politics. Sometimes you need to donate a nominal amount just to keep your foot in the door and the conversation open.
  - save_ferris 8y ago
    This makes no sense to me. Tom Cotton is one of the most fiscally conservative members of the Republican Caucus, a $5k donation by a billionaire hedge fund manager isn't going to sway his opinion on progressive tax reform. He voted to cut taxes in 2017 and has voted consistently against bills that either closely or somewhat align with what Dalio is proposing. Dalio clearly benefits financially from conservative fiscal policy, which senators like Cotton support. It's a big stretch to argue that Dalio might be trying to sway Cotton on his fiscal policy while also benefiting financially from it.
    - sremani 8y ago
      Quickly glancing Dalio's article, he used the word tax once and never in tandem with progressive tax. Here is the link (original on linked in) https://www.linkedin.com/pulse/why-how-capitalism-needs-reformed-ray-dalio/ https://www.linkedin.com/pulse/why-how-capitalism-needs-refo...
carusooneliner 8y ago
Recommend skipping the article with the clickbait title and instead read the Dalio essay on which the article is based: https://www.linkedin.com/pulse/why-how-capitalism-needs-reformed-ray-dalio https://www.linkedin.com/pulse/why-how-capitalism-needs-refo...
jacknews 8y ago
"The problem is that capitalists typically don't know how to divide the pie well and socialists typically don't know how to grow it well," Dalio wrote. He wants to avoid both the status quo and socialism, and he's hoping that the elections in both the US and Europe that happen over the next few years result in a reformed capitalism." . I really don't see how this could happen, but even if there's some kind of accommodation, it's simply a band-aid to the underlying problem. Which is that the 'means of production' needs to be OWNED by the people producing. Not a corporate owner (or even an 'entrepreneur'), and not 'the state', but the collective that actually does the work, commensurate with their overall contribution. There's also a huge issue around land ownership, and the rents that derive from it. Currently, simply owning land in a fast-developing city gives you a share in the bounty that others are creating, and also taxes those generating it. Land itself is a common inheritance. Should air or water also be subject to such 'ownership'?
- CompelTechnic 8y ago
  >Which is that the 'means of production' needs to be OWNED by the people producing. Not a corporate owner (or even an 'entrepreneur'), and not 'the state', but the collective that actually does the work, commensurate with their overall contribution. You sound similar to an anarcho-syndicalist, which is a position I've never understood well. Let me ask a question in the form of example. Bob, Ted, and Jim want to start a pin factory. All three want to work for it. So they pool their capital, contributing $250k, 300k, and 350k respectively, receiving proportional equity, invest in equipment, and all three go to work making pins after 2 months. They hire other workers. The contract for all workers gives a vesting schedule that gives them equity over time as well. The fact that CAPEX has to be provided by employees is not a good feature of this. Should shareholders that have never held a job with the firm not be allowed to invest in it? That is exceedingly restrictive.
  - Miner49er 8y ago
    Outside investors can be allowed I would think, but not given shares. For example, a credit union could give a loan and collect their interest. The credit union wouldn't get any equity.
kaycebasques 8y ago
I have respect for successful managers like Dalio and Soros because you can’t reach their level of success while deluding yourself about how the world economy works. And anyone who has invested/speculated with a lot of their own money knows how emotionally hard it is to make the right decisions day in and day out. For that reason, when Dalio talks about the economy, it’s worth considering what he’s saying. Moreso than politicians or economists.
- JohnWilcox 8y ago
  I guess a prayer at the demonic altar of Soros could get your startup funded. It can't hurt, can it. Soros along with all the tech tyrants that have been emerging from hades itself are all disassembling and deconstructing the whole basis of the civilized world and the most core concepts of self-governance, freedom of speech, freedom from tyranny, and the most fundamental and core, basic concepts and necessities for any form of democracy, let alone the middle class; yet you laud Soros? But I guess as long as you see yourself benefitting from the plunder and pillaging, you will support such depravity and degeneracy.
- njepa 8y ago
  I have stumbled upon a number of these types of texts recently and while I think it is generally a good thing I can't help noticing that they are quite... basic. Most of his concerns have been solved by mixed market economies, that overall deliver superior results. But even that discussion is probably a couple of decades too late.
  - objektif 8y ago
    Sorry which points of his are basic and which oone are solved?
- drjesusphd 8y ago
  Another way to look at it... With thousands of people playing the game, some are bound to be the luckiest. It doesn't necessarily mean they have more insight.
jimmy1 8y ago
Crony Capitalism is failing America. Capitalism is succeeding the Globe. It is responsible for the most prosperity, the lifting up of poverty, and improvement in living conditions and life expectancy in the history of literal history. I hate how capitalism has become a political boogeyman now. Fortunately, it has actually served to unite some of the left-wing and right-wing thinkers and forge some unlikely alliances. Probably completely off-topic, but having listened to many of his interviews, it's also one of the main reasons why Howard Schultz chose to run as an independent instead of a democrat.
- npongratz 8y ago
  Agreed. And I'd even remove the "capitalism" from "crony capitalism". It's simply cronyism.
- Miner49er 8y ago
  Crony capitalism is capitalism. And capitalism hits poor countries harder then the U.S. doesn't it? I'd say people working in sweatshops have it worse then most poor Americans.
  - pitaj 8y ago
    What a terrible comparison. Why don't you compare how those people were doing before and after enterprise entered their countries? Their standards of living are drastically better with sweatshop work than without it, and continues to increase.
    - Miner49er 8y ago
      Their standards of living are better due to improvements in technology, not capitalism. Unless you think that the technological improvements we have today are only due to capitalism, but I'm not so sure that's the case.
  - jimmy1 8y ago
    By your standard then, Stallinism and Maoism is socialism. The rest of this comment is beyond ridiculous.
temsk 8y ago
I like to think of capitalism we have today like a football game where you can deflate the ball, punch the opponent, have 20 men on the field, etc. with a ref that turns a blind eye. It's odd that we as a society get so riled up over the smallest allegation of cheating in a sports game or get upset when a ref does not see the smallest thing that should be flagged, thus potentially changing the outcome of the game, but we live in a society where cheating, gaming, deflating, etc. happens all day every day and we don't bat an eye.
- skybrian 8y ago
  This is structural. I'm reminded of what Matt Levine often says about insider trading rules: they are not about fairness, they are about theft. Apparently our legal system is better at protecting property than at fairness (which isn't even well defined).
  - ineedasername 8y ago
    There's a great book on pretty much this topic in political philosophy, called Justice as Fairness by John Rawls. [0] In the vein of this conversation, he does not argue against inequality, and breaks out of the capitalism/communist spectrum. Instead he proposed the strictures under which inequality should be allowed to persist in what he calls the Difference Principle: Social and economic inequalities should be arranged so that they are both (a) to the greatest benefit of the least advantaged persons, and (b) attached to offices and positions open to all under conditions of equality of opportunity. [0] https://en.wikipedia.org/wiki/Justice_as_Fairness:_A_Restatement https://en.wikipedia.org/wiki/Justice_as_Fairness:_A_Restate...
StreamBright 8y ago
More like, it is the US flavor of corporate controlled warmongering crony capitalism that is failing. https://www.cambridge.org/core/journals/perspectives-on-politics/article/testing-theories-of-american-politics-elites-interest-groups-and-average-citizens/62327F513959D0A304D4893B382B992B https://www.cambridge.org/core/journals/perspectives-on-poli...
rchaud 8y ago
The corporate tax cuts in the US led to a temporary stock market boom, while changing absolutely nothing in terms of underlying economic fundamentals. Those who benefited were those who already have money in a portfolio, which eliminates the majority of Americans. Companies like Bridgewater gain when policy changes like this happen. Regular people lose because tax cuts are paid for by cutting public services, and pushing part of the cost on to the next generation. What's Mr. Dalio doing to remedy that imbalance, aside from writing a self-serving Buffet-style "I should be taxed more" essay?
- samcday 8y ago
  At least he's saying something. You can be cynical and argue he's just trying to get out ahead before the poor decide to eat the rich. But either way, the US needs more people with a platform to be saying this kind of stuff, whatever their motives are. EDIT: I would also like to point out that he's calling for a national state of emergency to be declared and for the government to step in and try and do something about the worsening inequality problem. A person with massive personal wealth who is able to enact things with their own resources calling for the problem to be tackled in the public sphere is a good thing too, I think.
  - rchaud 8y ago
    When you're Ray Dalio, the standard for "doing something" is much higher than writing a pithy blog post. We have seen many examples of rich people penning mea culpas after profiting off of the same economic system they now claim as being rigged against the commoners. Buffet does it at least once every couple of years. Because he's rich and influential, Dalio will get a few column inches, but after that, the levers of power, pulled by the rich and influential, go about their daily business.
    - ilaksh 8y ago
      He said he would donate $100 million to Connecticut schools. That might be only 0.5% of his supposed net worth , but at least it something.
- 8y ago
daemonk 8y ago
Regardless of your political opinion on Andrew Yang and his proposed policies, I think it is worth hearing him out on his (and many other's) perspective on modern capitalism. The way our society define and value ourselves primarily on a couple of economic metrics seems misguided. These metrics are not representative of people's well being in our modern, more technological advanced society. I think our definition of capitalism needs to evolve (like Andrew Yang says).
kjw 8y ago
Dalio is now out with Part 2 ("My Diagnosis of Why Capitalism Is Now Not Working Well for the Majority of People", "What I Think Should Be Done", "Looking Ahead") Here is the new LinkedIn post -- https://www.linkedin.com/pulse/why-how-capitalism-needs-reformed-parts-1-2-ray-dalio/ https://www.linkedin.com/pulse/why-how-capitalism-needs-refo... And here is a link to PDF -- https://www.economicprinciples.org/downloads/Why-and-How-Capitalism-Needs-To-Be-Reformed.pdf https://www.economicprinciples.org/downloads/Why-and-How-Cap...
RickJWagner 8y ago
Dalio seems to be aiming for the political center. Howard Schultz is doing the same thing. I wonder if Dalio is hoping for some sort of poltical appointment.

139 points by howard941 8y ago

Yay! Let's fix the world! But wait, most here can't even fix themselves!

People who have already made their money love to call for this sort of thing. They're rich enough to be insulated from it; it hits those who might actually try to get rich in the future.

almost_usual 8y ago
This doesn't make sense. If capitalism were to end tomorrow he'd lose everything.
- tejtm 8y ago
  By this same sense can we also conclude that due to capitalism approximately 99.99999% will never find anything?
vkou 8y ago
So, if you're poor and criticise capitalism (or some particular implementation of it), you're just a sore loser, and if you're rich and criticise it, you're a hypocrite?
onemoresoop 8y ago
What do you mean people who have already made their money love to call for this thing? The author is a billionaire who is is proposing for the wealthy to be taxed more, how is he insulated by paying more taxes? Those who want to get rich in the future might be helped by measures to create more income equality thus creating more social mobility. Equality doesn't mean everybody makes a same amount of money, but more like the ability for everyone to make more. When the mega rich own everything this is not possible. Or perhaps, you dream of being mega rich yourself and want things to stay the way they are now so you can make it?
- navigatesol 8y ago
  >The author is a billionaire who is is proposing for the wealthy to be taxed more, how is he insulated by paying more taxes? Is this a serious question? https://en.wikipedia.org/wiki/Panama_Papers https://en.wikipedia.org/wiki/Panama_Papers Ray Dalio has taken his chunk, is retiring, but senses the social and political winds are changing. Being a billionaire is no longer something people "respect", and is very rarely "earned". I'm sure he doesn't want the Proletariat knocking on his door in his old age.
- mrfredward 8y ago
  There's an important nuance between income and wealth here. Income tax takes money from the people who are still going to work to build their fortunes (and those who are just getting by). The ones who have already made a fortune are only worried about the capital gains rate. Billionaires who advocate for higher income tax, but not a higher capital gains rate, are just pulling up the ladder behind them. The article isn't explicit with what Dalio is advocating for here.
  - dondawest 8y ago
    You’re adding an incredibly relevant layer of nuance. Dallio’s plan is vague so his true intentions are illegible. People ascribing positive AND negative sentiments to him need to actually understand the policy changes he’s proposing (I.e. higher income rate vs capital gains rate) before passing judgement — and since he specifically has left it vague, I don’t see how anyone can judge his plan either positively or negatively: he has not even presented a specific plan!
- will_brown 8y ago
  >The author is a billionaire who is is proposing for the wealthy to be taxed more, how is he insulated by paying more taxes? Maybe it’s in his proposal but I didn’t see any mention of bringing back the estate (death) tax on the rich or increasing capital gains.
- tathougies 8y ago
  Raising the highest tax bracket has historically resulted in less tax being paid by the rich. This is because it increases the demand for services and banking instruments that lower tax liability. Because higher taxes mean more rich people are seeking to shelter their assets, businesses can start to offer these services which are typically not very profitable because there are larged fixed costs and not enough market demand. However, increasing demand for tsx shelters by raising the rates make these businesses profitable. Thus, a rational billionaire seeking to shelter their assets via companies catering to the rich has it in his or her best interests to call for higher rates. It is clear that these people are uninterested in paying higher taxes as it is completely legal to pay more taxes without any legislation. Thr website pay.gov accepts money for those who would like to contribute to the operations and debt costs of the united states government. Until buffett and others make actual extra tax contributions to the government (as opposed to their own private charity), I'll continue to ignore them
chalst 8y ago
People who are very rich usually want to be clubby with other people who are very rich. The super rich who talk in concrete ways about how to tackle the failures of capitalism are relatively rare.
- onemoresoop 8y ago
  They realize that if the whole house of cards collapses they're loosing the most. If the house of cards (the system) is stable they're better off as well.
  - seleniumBubbles 8y ago
    This seems to be the deeper reason why many wealthy people begin leaning left publicly after amassing their fortune. The very same people can often be seen years earlier making statements that could come out of an Ayn Rand book, but when they’ve beaten the game, the risk-mitigating option is to become “the people’s billionaire.” Im afraid it’s not a change of heart, it’s simply the most logical decision for someone whose wealth is locked up in institutions governed by a democracy.
  - kevas 8y ago
    Are you sure about that? Well... for Dalio, he's an investor that is always looking both forward and backwards. He's looking backwards to see what's happend in the past and how economy/society has reacted. He's looking in the future to see how he could best take advantage of signals he sees.
maxkwallace 8y ago
If you flip it around, it I think it's also entirely reasonable that many of these people only feel like they can criticize things after they've made their money. Or they know we wouldn't listen to them beforehand. I'm not sure what you're criticizing but Dalio's post is explicitly about economic mobility, i.e. reducing barriers preventing more people from getting rich in the future.
- toomuchtodo 8y ago
  Then Dalio should put his money where his mouth is and support political candidates who champion public policy that mitigate the inequality issues he draws attention to. Talk is cheap.
  - m4r35n357 8y ago
    So freedom of speech is bad and political bribery is good?
    - toomuchtodo 8y ago
      Campaign contributions are speech. Saying one thing while doing the opposite is fraud.
    - rchaud 8y ago
      Nobody positioned this as a 'freedom of speech' issue, except you. He's entitled to his words. The public is entitled to see said words as the hypocritical doublespeak they are.
- engineerworks 8y ago
  And many don't want these changes because they also want to make money before things change. This is one reason such change is not going to happen any sooner unless money stops mattering anymore.
chungleong 8y ago
One would expect greedy people to be acquisitive in regards to moral high grounds as well. They have to have it all.
i_am_proteus 8y ago
Indeed. Many of the reforms he suggests would work too cement the existing economic classes. Obviously, this benefits those who have the most. Does anyone know if there is a term for this? It's a bit reminiscent of 'regulatory capture' but that doesn't seem quite right.
- joebadmo 8y ago
  Pulling the ladder up behind you.
bwanab 8y ago
If we're going to err, we should err on the side of taking the guy at his word. He wants to raise taxes on himself to provide for better distribution of income and educational opportunity. Where's the problem with that?
- rchaud 8y ago
  > He wants to raise taxes on himself Where did you read that? Tax policy is ludicrously complex by design. Simply saying "we should pay higher taxes" is broad enough to be meaningless. Increasing income tax for example would barely make a dent in their take-home, because the majority of their wealth comes through capital gains tax. Not to mention the numerous documented loopholes in the tax system that allow people in Dalio/Buffet's position to move money around the world at a moment's notice and pay nothing in federal tax. The loopholes are there, but they never get fixed, thanks to lobbying from the big 4 audit firms that depend on blue chip clients like him to fatten their paycheques. Just because Dalio has an arms-length connection to the dysfunctional tax system doesn't mean he;s ignorant as to why the system is the way it is.
empath75 8y ago
This is pure ad hominem and says nothing about the substance of his argument.
nategri 8y ago
Who was it that said no one in America is poor, they're just "temporarily embarrassed millionaires"? This comment is a pretty good representation of that sentiment.
danans 8y ago
> They're rich enough to be insulated from it This is solved by taxing very high wealth, not just very high income. > it hits those who might actually try to get rich in the future. Not those who try, just those who actually get very rich. None of the current tax increase proposals target the wealth or income of even slightly rich people (low millions of net worth or low 100ks of income), just the very rich (> 50mil net worth). That still leaves a ton of room for incentivizing getting rich below that number.
brycesbeard 8y ago
Or they realize the problem isn’t fixed if they give away their money. It’s structural — why give up what you’ve gotten if it won’t fix anything? IMO, calling for higher taxes is the same thing to do, rather than performing some sort of empty virtue signaling.
rchaud 8y ago
> it hits those who might actually try to get rich in the future. How does it do that? These are just words. Dalio and his hand-wringing clique have no issue speaking platitudes about economic justice, and turning right around and lobbying politicians for more tax cuts, less regulation and fewer consumer protections. How are you going to get rich in the future when real wages for consumers haven't budged in 4 decades? Do you plan on delivering a product people can actually afford, or simply engage in the financial chicanery that made the 2008 recession possible?

onemoresoop 8y ago

here's the outline for Dalio article: https://outline.com/GHeFsV https://outline.com/GHeFsV

deleted 8y ago

[deleted]

save_ferris 8y ago

His fund's political donations don't align with what he's proposing[0]. His firm's largest 2018 donations were to Tom Cotton(R-AR) of AR and Tim Kane(R-OH), neither of whom would dare support these ideas. He can stand up and talk like a leader, but until he's willing to financially back candidates who are genuinely interested in solving these problems (which likely means backing a candidate against his own financial interests), this is all hot air. [0]: https://www.opensecrets.org/orgs/toprecips.php?id=D000032123&cycle=A https://www.opensecrets.org/orgs/toprecips.php?id=D000032123...

maxkwallace 8y ago
Thanks for the link. I think things are more complicated than what you've said. There may be good reasons to donate to a candidate who wouldn't support these ideas if that donation could nevertheless help sway their views on the issue. Opposition isn't the only strategy in politics. Sometimes you need to donate a nominal amount just to keep your foot in the door and the conversation open.
- save_ferris 8y ago
  This makes no sense to me. Tom Cotton is one of the most fiscally conservative members of the Republican Caucus, a $5k donation by a billionaire hedge fund manager isn't going to sway his opinion on progressive tax reform. He voted to cut taxes in 2017 and has voted consistently against bills that either closely or somewhat align with what Dalio is proposing. Dalio clearly benefits financially from conservative fiscal policy, which senators like Cotton support. It's a big stretch to argue that Dalio might be trying to sway Cotton on his fiscal policy while also benefiting financially from it.
  - sremani 8y ago
    Quickly glancing Dalio's article, he used the word tax once and never in tandem with progressive tax. Here is the link (original on linked in) https://www.linkedin.com/pulse/why-how-capitalism-needs-reformed-ray-dalio/ https://www.linkedin.com/pulse/why-how-capitalism-needs-refo...

carusooneliner 8y ago

Recommend skipping the article with the clickbait title and instead read the Dalio essay on which the article is based: https://www.linkedin.com/pulse/why-how-capitalism-needs-reformed-ray-dalio https://www.linkedin.com/pulse/why-how-capitalism-needs-refo...

jacknews 8y ago

"The problem is that capitalists typically don't know how to divide the pie well and socialists typically don't know how to grow it well," Dalio wrote. He wants to avoid both the status quo and socialism, and he's hoping that the elections in both the US and Europe that happen over the next few years result in a reformed capitalism." . I really don't see how this could happen, but even if there's some kind of accommodation, it's simply a band-aid to the underlying problem. Which is that the 'means of production' needs to be OWNED by the people producing. Not a corporate owner (or even an 'entrepreneur'), and not 'the state', but the collective that actually does the work, commensurate with their overall contribution. There's also a huge issue around land ownership, and the rents that derive from it. Currently, simply owning land in a fast-developing city gives you a share in the bounty that others are creating, and also taxes those generating it. Land itself is a common inheritance. Should air or water also be subject to such 'ownership'?

CompelTechnic 8y ago
>Which is that the 'means of production' needs to be OWNED by the people producing. Not a corporate owner (or even an 'entrepreneur'), and not 'the state', but the collective that actually does the work, commensurate with their overall contribution. You sound similar to an anarcho-syndicalist, which is a position I've never understood well. Let me ask a question in the form of example. Bob, Ted, and Jim want to start a pin factory. All three want to work for it. So they pool their capital, contributing $250k, 300k, and 350k respectively, receiving proportional equity, invest in equipment, and all three go to work making pins after 2 months. They hire other workers. The contract for all workers gives a vesting schedule that gives them equity over time as well. The fact that CAPEX has to be provided by employees is not a good feature of this. Should shareholders that have never held a job with the firm not be allowed to invest in it? That is exceedingly restrictive.
- Miner49er 8y ago
  Outside investors can be allowed I would think, but not given shares. For example, a credit union could give a loan and collect their interest. The credit union wouldn't get any equity.

kaycebasques 8y ago

I have respect for successful managers like Dalio and Soros because you can’t reach their level of success while deluding yourself about how the world economy works. And anyone who has invested/speculated with a lot of their own money knows how emotionally hard it is to make the right decisions day in and day out. For that reason, when Dalio talks about the economy, it’s worth considering what he’s saying. Moreso than politicians or economists.

JohnWilcox 8y ago
I guess a prayer at the demonic altar of Soros could get your startup funded. It can't hurt, can it. Soros along with all the tech tyrants that have been emerging from hades itself are all disassembling and deconstructing the whole basis of the civilized world and the most core concepts of self-governance, freedom of speech, freedom from tyranny, and the most fundamental and core, basic concepts and necessities for any form of democracy, let alone the middle class; yet you laud Soros? But I guess as long as you see yourself benefitting from the plunder and pillaging, you will support such depravity and degeneracy.
njepa 8y ago
I have stumbled upon a number of these types of texts recently and while I think it is generally a good thing I can't help noticing that they are quite... basic. Most of his concerns have been solved by mixed market economies, that overall deliver superior results. But even that discussion is probably a couple of decades too late.
- objektif 8y ago
  Sorry which points of his are basic and which oone are solved?
drjesusphd 8y ago
Another way to look at it... With thousands of people playing the game, some are bound to be the luckiest. It doesn't necessarily mean they have more insight.

jimmy1 8y ago

Crony Capitalism is failing America. Capitalism is succeeding the Globe. It is responsible for the most prosperity, the lifting up of poverty, and improvement in living conditions and life expectancy in the history of literal history. I hate how capitalism has become a political boogeyman now. Fortunately, it has actually served to unite some of the left-wing and right-wing thinkers and forge some unlikely alliances. Probably completely off-topic, but having listened to many of his interviews, it's also one of the main reasons why Howard Schultz chose to run as an independent instead of a democrat.

npongratz 8y ago
Agreed. And I'd even remove the "capitalism" from "crony capitalism". It's simply cronyism.
Miner49er 8y ago
Crony capitalism is capitalism. And capitalism hits poor countries harder then the U.S. doesn't it? I'd say people working in sweatshops have it worse then most poor Americans.
- pitaj 8y ago
  What a terrible comparison. Why don't you compare how those people were doing before and after enterprise entered their countries? Their standards of living are drastically better with sweatshop work than without it, and continues to increase.
  - Miner49er 8y ago
    Their standards of living are better due to improvements in technology, not capitalism. Unless you think that the technological improvements we have today are only due to capitalism, but I'm not so sure that's the case.
- jimmy1 8y ago
  By your standard then, Stallinism and Maoism is socialism. The rest of this comment is beyond ridiculous.

temsk 8y ago

I like to think of capitalism we have today like a football game where you can deflate the ball, punch the opponent, have 20 men on the field, etc. with a ref that turns a blind eye. It's odd that we as a society get so riled up over the smallest allegation of cheating in a sports game or get upset when a ref does not see the smallest thing that should be flagged, thus potentially changing the outcome of the game, but we live in a society where cheating, gaming, deflating, etc. happens all day every day and we don't bat an eye.

skybrian 8y ago
This is structural. I'm reminded of what Matt Levine often says about insider trading rules: they are not about fairness, they are about theft. Apparently our legal system is better at protecting property than at fairness (which isn't even well defined).
- ineedasername 8y ago
  There's a great book on pretty much this topic in political philosophy, called Justice as Fairness by John Rawls. [0] In the vein of this conversation, he does not argue against inequality, and breaks out of the capitalism/communist spectrum. Instead he proposed the strictures under which inequality should be allowed to persist in what he calls the Difference Principle: Social and economic inequalities should be arranged so that they are both (a) to the greatest benefit of the least advantaged persons, and (b) attached to offices and positions open to all under conditions of equality of opportunity. [0] https://en.wikipedia.org/wiki/Justice_as_Fairness:_A_Restatement https://en.wikipedia.org/wiki/Justice_as_Fairness:_A_Restate...

StreamBright 8y ago

More like, it is the US flavor of corporate controlled warmongering crony capitalism that is failing. https://www.cambridge.org/core/journals/perspectives-on-politics/article/testing-theories-of-american-politics-elites-interest-groups-and-average-citizens/62327F513959D0A304D4893B382B992B https://www.cambridge.org/core/journals/perspectives-on-poli...

rchaud 8y ago

The corporate tax cuts in the US led to a temporary stock market boom, while changing absolutely nothing in terms of underlying economic fundamentals. Those who benefited were those who already have money in a portfolio, which eliminates the majority of Americans. Companies like Bridgewater gain when policy changes like this happen. Regular people lose because tax cuts are paid for by cutting public services, and pushing part of the cost on to the next generation. What's Mr. Dalio doing to remedy that imbalance, aside from writing a self-serving Buffet-style "I should be taxed more" essay?

samcday 8y ago
At least he's saying something. You can be cynical and argue he's just trying to get out ahead before the poor decide to eat the rich. But either way, the US needs more people with a platform to be saying this kind of stuff, whatever their motives are. EDIT: I would also like to point out that he's calling for a national state of emergency to be declared and for the government to step in and try and do something about the worsening inequality problem. A person with massive personal wealth who is able to enact things with their own resources calling for the problem to be tackled in the public sphere is a good thing too, I think.
- rchaud 8y ago
  When you're Ray Dalio, the standard for "doing something" is much higher than writing a pithy blog post. We have seen many examples of rich people penning mea culpas after profiting off of the same economic system they now claim as being rigged against the commoners. Buffet does it at least once every couple of years. Because he's rich and influential, Dalio will get a few column inches, but after that, the levers of power, pulled by the rich and influential, go about their daily business.
  - ilaksh 8y ago
    He said he would donate $100 million to Connecticut schools. That might be only 0.5% of his supposed net worth , but at least it something.
8y ago

daemonk 8y ago

Regardless of your political opinion on Andrew Yang and his proposed policies, I think it is worth hearing him out on his (and many other's) perspective on modern capitalism. The way our society define and value ourselves primarily on a couple of economic metrics seems misguided. These metrics are not representative of people's well being in our modern, more technological advanced society. I think our definition of capitalism needs to evolve (like Andrew Yang says).

kjw 8y ago

Dalio is now out with Part 2 ("My Diagnosis of Why Capitalism Is Now Not Working Well for the Majority of People", "What I Think Should Be Done", "Looking Ahead") Here is the new LinkedIn post -- https://www.linkedin.com/pulse/why-how-capitalism-needs-reformed-parts-1-2-ray-dalio/ https://www.linkedin.com/pulse/why-how-capitalism-needs-refo... And here is a link to PDF -- https://www.economicprinciples.org/downloads/Why-and-How-Capitalism-Needs-To-Be-Reformed.pdf https://www.economicprinciples.org/downloads/Why-and-How-Cap...

RickJWagner 8y ago

Dalio seems to be aiming for the political center. Howard Schultz is doing the same thing. I wonder if Dalio is hoping for some sort of poltical appointment.