If anyone should be concerned about whether a recession is imminent, it’s the founder and co-chief investment officer of the biggest hedge fund in the world.
That man is Ray Dalio, that hedge fund is Bridgewater, and he has some interesting perspectives on the economy in general and whether the United States is in the midst of a decline. He appeared on a podcast with The Hustle, discussing his new book “The Changing World.”
Dalio was asked where he felt the current version of capitalism has fallen short.
“I’m a capitalist. I believe in capitalism. But I think everything’s got to be reformed. The bottom 60% of the population has not had a rise in per-capita income since 1980. There are big opportunity gaps in areas like education. We’re going to need radical reforms in order to rectify that.”
The host followed up by saying, “the left wants redistribution. The right wants trickle-down policies. In your opinion, how do we fix these inequities?”
“I almost don’t care what’s done as long as it’s bipartisan. “The most important thing is that we have to develop a solid middle — a bipartisanship of smart people who can work together across party lines to make the reforms. We can get into a type of civil war if the two extremes are fighting. This has happened repeatedly in history,” Dalio said.
Regarding a billionaire tax, Dalio said it will be coming, and there needs to be a transfer of wealth, along with a transfer of equation and opportunities.
He feels inheritance taxes might be targeted.
The topic changed to China, and if Dalio thought they would rise above America as the world’s leading superpower.
“It is inevitable that China will be a comparable power. It is likely that it will pass the US, but not certain. It’ll all depend on how much the United States takes care of itself.
China has a population four times that of the US. If its per-capita income was even half that of the US, it would be twice as large economically. I first started going to China in 1984. Since then, its per-capita income has increased by 26 times.
We can’t discount China, and we know that we’re in a different world than in the early years of me growing up when the United States was the dominant power.
We’re going to have a great power conflict. And there are no courts that you go to when you have disagreements; it’s a power conflict. What matters most is power. And so we better get stronger or expect that we have to deal with that power conflict. Ideally in a way that does not produce a military war.”