Dominic Rushe writes in The Guardian that the wealthy are worried. Ray Dalio is the latest billionaire to air his unease:
Dalio, founder of Bridgewater, the world’s biggest hedge fund, an investor in low-wage employers including Walmart and KFC, and a man worth about $18bn according to Forbes, became the latest in a bank of billionaires to go public about his fears of widening income inequality.
The yawning gap between rich and poor is a “national emergency”, Dalio wrote in an 8,000-plus-word blogpost on LinkedIn (where else?) that poses an “existential risk for the US”.
The list of worried billionaires is growing:
Dalio joins the JP Morgan boss, Jamie Dimon, investment guru Warren Buffett and even the Blackstone chairman, Stephen Schwarzman, “private equity’s designated villain” ( copyright the New Yorker) and usually an unapologetic 0.01%er, in publicly worrying that income inequality has stretched the US body politic to breaking point.
So dire has the situation become that Schwarzman called for a Marshall plan – referencing the US initiative that aided the rebuilding of western Europe after the second world war – to help rebuild the middle class. Admittedly he couldn’t quite use the word “inequality” (that might suggest something was unfair), preferring to argue the real problem was that those not in his wealth bracket were suffering from “income insufficiency”.
That's the new buzz phrase -- "income insufficiency:"
Never before have so many of the kings of capitalism showed so much concern about the system that created them, said Charles Geisst, author of Wall Street: A History and professor of economics and finance at Manhattan College.
The last time the 1% felt so under pressure was probably back in the 1930s as the US came to terms with the Great Depression, said Geisst. But back then the super rich did not criticize capitalism. “If you called someone a communist or a socialist at that time, that was fighting words because of the atmosphere with the Soviets,” he said.
Now the political debate has shifted, said Geisst. “I think they realize that Bernie Sanders has a lot more support than a lot of people think,” he said. Sanders and fellow Democratic presidential hopeful Elizabeth Warren “could give them a really bad time” with their plans for higher taxes and greater regulation, he said. “These people are famous for hedging their bets, and this is another way of doing it.”
Steve Glickman, a senior economic adviser in the Obama administration and now founder of Develop, a company seeking to attract investment to low-income areas called “opportunity zones”, said the very wealthy understand there has been a societal change that challenges the way they have done business.
“An increasing chunk of the country has been left behind and that can’t be ignored any more,” he said. “The rise of populism, not just in the US but also in many other markets like Europe, is dramatically affecting the business model they have taken for granted. We are turning the table on what was close to 90 years of agreed upon bipartisan policy goals around trade and immigration.”
If the billionaires are really concerned for the future, they could start to change that future by getting rid of Donald Trump.
Image: The Fiscal Times
