In March 2015, I wrote my blog A new Moscow on the Hudson. The title of my blog was a reference to a 1984 movie, featuring one of my favourite actors: Robin Williams (IMDb, Wiki). My March 2019 follow-up blog concluded that my 2015 prediction appears to become reality.
My 2015 prediction is similar as Ray Dalio‘s recent warning below: a (political) “revolution” is coming to the USA. The tipping point probably was the slow death of the American Dream. Today, Americans no longer believe that their life could improve towards the “American 1%“.
For the death of the American dream, please see my related blogs:
- 2015-06: the American Dream
- 2018-05: Fair inequality vs unfair equality
- 2018-08: The end of the middle class: Why prosperity is failing in America (Big Think)
- 2018-08: The Long Death of America’s Middle Class (The Casey Report)
- 2018-12: U.S. Life Expectancy Drops for Third Year in a Row
On 28 November 2018, Simon Kuper of the Financial Times wrote about The new American Dream? Northern Europe (my December 2018 blog). FT’s subtitle: Recent polls shows most Democrats and young Americans now believe in “socialism”.
The consequences of shattered beliefs are two-fold: (1) a burn-out and/or depression (my blogs) or a crisis of faith, and (2) substitution by new beliefs. Given the shattered beliefs in capitalism, it makes sense discovering socialism, the opposite political belief system.
The above may take several years – or even decades – because of (i) gerrymandering (my blog) and (ii) the impact of the U.S. Electoral College that benefits the political power of sparsely populated rural states (eg, Michigan, Pennsylvania and Wisconsin) in U.S. presidential elections.
In the meantime, the Democratic Party is busy eroding the impact of the Electoral College:
- GPF on the Electoral College (2016): “It has attracted criticism, but the system was designed to hold the country together.”
- Alexandria Ocasio-Cortez on Twitter (2018): “It is well past time we eliminate the Electoral College, a shadow of slavery’s power on America today that undermines our nation as a democratic republic.”
- The Hill, 2019: “Blue states band together looking to bypass Electoral College”.
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Vanity Fair Hive title: Billionaire hedge-fund manager warns a “revolution” is coming
VF Hive subtitle: Ray Dalio is extremely worried there’s about to be an uprising in America.
Published: 5 April 2019
“Bridgewater Associates founder Ray Dalio lives a pretty comfortable life, on account of the $16.9 billion to his name. But there’s something keeping him up at night, and it’s not the nagging sense that, at 69, he doesn’t have nearly enough time on earth left to spend that giant chunk of change. It‘s that there’s about to be an uprising in America, spurred by the widening wealth gap, and we all know who tends to fare the worst when the pitchforks come out.
Writing in a new essay on LinkedIn, the founder of the world’s largest hedge fund says that while capitalism has worked out exceedingly well for him, he’s also “seen capitalism evolve in a way that it is not working well for the majority of Americans because it’s producing self-reinforcing spirals up for the haves and down for the have-nots.” In turn, that’s created “widening income/wealth/opportunity gaps that pose existential threats to the United States because these gaps are bringing about damaging domestic and international conflicts and weakening America’s condition.” Dalio, who owns a 185-foot yacht, sites statistics that show:
- Wages for the majority of Americans have been stagnant since 1980, with those who grew up in the middle class earning less than their parents as the income gap between the poorest and richest grows wider than ever;
- Wealth determines the quality of education a child will receive, and because “richer communities tend to have public schools that are far better funded than poorer communities,” the “income/wealth/opportunity gap” gets reinforced; Dalio writes that not educating kids well is “the equivalent of child abuse” and “economically stupid”;
- Americans earning less and dying younger—men at the bottom will likely die 10 years earlier than men at the top—has direct (negative) consequences on the economy.
“Disparity in wealth, especially when accompanied by disparity in values, leads to increasing conflict and, in the government, that manifests itself in the form of populism of the left and populism of the right and often in revolutions of one sort or another,” Dalio writes, saying that this makes him especially “worried what the next economic downturn will be like.” Dalio—who believes that firing people “is not a big deal”—would to make clear that the staggering gap between the haves and the have-nots is 100 percent not at all due to “evil rich people doing bad things to poor people” (or “lazy poor people and bureaucratic inefficiencies”), but “how the capitalist system is now working.” To avoid people like, for instance, Ray, being eaten for dinner when the revolution comes, he advises that:
The solution . . . lies in better leadership at the “top of the country;” treating the wealth and income gap as a national emergency; a bipartisan commission to re-engineer the economic system; more accountability, presumably for elected officials; minimum standards for health care and education; some redistributive taxes on the wealthy; and more coordination of monetary and fiscal policy to stimulate growth.”
Source: https://www.vanityfair.com/news/2019/04/ray-dalio-capitalism-revolution
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