TFTF

Ray Dalio Is Kinda, Sorta, Really Wrong

June 7, 2019

“The ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed, the world is ruled by little else. Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually slaves of some defunct economist.”
John Maynard Keynes

“Nothing is more dangerous than a dogmatic worldview—nothing more constraining, more blinding to innovation, more destructive of openness to novelty.”
Stephen Jay Gould

“Inequality has emerged as a major issue in the US and beyond. A generation ago it could reasonably have been asserted that the overall growth rate of the economy was the main influence on the growth in middle-class incomes and progress in reducing poverty. This is no longer a plausible claim.

The share of income going to the top 1 percent of earners has increased sharply. A rising share of output is going to profits. Real wages are stagnant. Family incomes have not risen as fast as productivity. The cumulative effect of all these developments is that the US may well be on the way to becoming a Downton Abbey economy. It is very likely that these issues will be with us long after the cyclical conditions have normalized and budget deficits have at last been addressed.”
Lawrence Summers (in the Financial Times, February 2014)

Ray Dalio is the thoughtful, somewhat controversial founder of the world’s largest hedge fund, Bridgewater Associates, which he started in 1975. While much of his writing is private, I (and many others) peruse every word we can of his and the Bridgewater team’s thinking. I find it to be some of the most interesting market commentary I read.

Lately Ray (read his bio here) has been far more open with his thinking, posting books and essays. This letter is the beginning of a response to his articles, Why and How Capitalism Needs To Be Reformed, Parts 1 and 2 and a follow-up piece titled It’s Time to Look More Carefully at ‘Monetary Policy 3 (MP3)’ and ‘Modern Monetary Theory’. He posted both publicly on LinkedIn.

On first reading those, I will admit to thinking, “Ray Dalio is kinda, sorta wrong.” I agreed with much of Part 1, with a few quibbles. Ditto for Part 2. But when I read the third piece I found myself thinking, “Ray Dalio is really, really wrong.” In that essay he basically endorses Modern Monetary Theory (MMT).

Coming from someone of Ray’s stature, and knowing that others like Bill Gross are beginning to endorse MMT either obliquely or directly, I found myself wanting to shout, “Stop! This is dangerous!”

As it turns out, Ray and I have mutual friends, and none describe him as particularly dangerous. They have nothing but good things to say about him, both businesswise and personally. He is clearly a generous man. And watching him in interviews and on stage, he is both disarming and comes across rather warmly. Definitely not dangerous. But ideas have consequences…

Ray’s essays are in his typical conversational style. There are plenty of footnotes and explanations in the combined 12,348 words (which fill 42 pages, not counting footnotes and appendixes). Almost any reader would agree with much of the first two-part essay.

Ray has done us all a service by pointing out the elephants in the room (some tinged with pink), which are rarely mentioned in public discourse. We discuss various parts of the elephant, but seldom the entire creature. By that, I mean the rapidly growing potential for left-of-center “progressive” control of both Congress and the White House. Part of that growth stems from an increasing frustration over the perceived differences between haves and have nots, between the protected and unprotected, combined with fascination for government solutions to our society’s perceived ills.

As The Economist reported recently, 51% of those polled between ages 18-29 have a positive view of socialism. That should scare you.


Source: The Economist

A growing number of that generation are taking that view into the voting booth. Democratic presidential candidates are all burnishing their “progressive” credentials. I have zero insight into who might win that nomination fight, but there is a more than reasonable chance it will be the most left-leaning presidential nominee in a very long time, since at least George McGovern (for whom I voted). And given the potential for recession between now and the election, they have a reasonable chance of winning.

Just as Trump figured out how to energize the frustration of enough voters to win the presidency, it is likely we will see a populist nominated on the Democratic side. A Democratic president and Congress will give us higher spending and taxes, and if that election happens amid recession, there will be an increasing drumbeat to “do something” radical. The already-huge $2-trillion deficit we will have by then could easily swell even more.

Dalio, to his credit, recognizes that would be a negative outcome. He proposes dealing with the increasing deficit and debt via Modern Monetary Theory (MMT) or directly printing money. He also hopes it would help equalize the increasing income and wealth disparities.

But I’m jumping ahead of myself. Today, I’ll begin an open multipart letter back to Ray in a conversational response. He addresses problems that are quite real and proposes solutions. We may not like them but at least he has ideas. His tone invites discourse, and so I intend to reply in that spirit. This is a potential learning moment for us all.

Dear Ray,

First, I want to thank you for the insight and wisdom you’ve offered over your career. They have intellectually enriched many of us. I find much to admire in your most recent essays but a few points leave me with serious trepidation.

That being said, I think we generally agree on the problems, and specifically that they pose a serious threat to US economic and social well-being. You use the word “existential threat” (or risk) several times in the essays. Someone as thoughtful as you doesn’t use that language lightly.

You talk about wealth and income disparity as a failure of capitalism. Quoting from you:

Over these many years I have 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. This is creating 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.

I think that most capitalists don’t know how to divide the economic pie well and most socialists don’t know how to grow it well, yet we are now at a juncture in which either a) people of different ideological inclinations will work together to skillfully re-engineer the system so that the pie is both divided and grown well or b) we will have great conflict and some form of revolution that will hurt most everyone and will shrink the pie.

…which explains why I think that not reforming capitalism would be an existential threat to the US.

…These conditions pose an existential risk for the US.

The previously described income/wealth/opportunity gap and its manifestations pose existential threats to the US because these conditions weaken the US economically, threaten to bring about painful and counterproductive domestic conflict, and undermine the United States’ strength relative to that of its global competitors.

I agree with this. The current situation could easily become a series of crises that would in fact be “existential,” as seen from today’s relatively benign world. We are being forced into difficult choices, both political and economic, and the longer we kick the proverbial can down the road, not dealing with the real fundamental issues, the more difficult and starker those choices will be.

We are rapidly approaching a time in which there will be no good choices, only extremely difficult, controversial and/or bad choices, none of which resolve the fundamental problems.

That said, we need to make sure our choices don’t exacerbate the problems.

Let’s start with what I think we agree upon: We both recognize that there is widening wealth and income disparity in the US. I would point out that that is a worldwide trend but agree it applies to the US in particular. This is causing political frustration, with what you term the potential to bring about “painful and counterproductive domestic conflict.” If by that you mean serious partisan divisiveness and angry rhetoric, I completely agree. The risk is that we veer widely from side to side of the road and never find the middle.

Income and Wealth Inequality        

For the benefit of this letter’s readers, let’s recap some of your charts along with a few from my own letters on these subjects. You generally compare the top 40% and bottom 60%. You could have made a starker comparison using 80/20 or 90/10 or even 99/1. I congratulate you on avoiding the extremes to make your case.

Let’s look at some of your charts. This first one is self-explanatory, showing the top 40% have seen their incomes rise significantly while the bottom 60% have been flat for almost 50 years.


Source: Ray Dalio

I find in these next charts some of the more disheartening trends you describe. As I’m sure you know, survey data shows this may be the first generation in a long time that doesn’t expect their children will see higher living standards. Whatever the American dream is, the hope that we have for our children is embodied in it. That hope seems to be slipping away and it aggravates the political angst that concerns us both.


Source: Ray Dalio

The difference is even clearer when you look at the top 1% versus the bottom 90%...


Source: Ray Dalio

…and when you look at income distribution and growth by quintiles over the last almost 50 years? It’s a very sobering reality.


Source: Ray Dalio

My friend Bruce Mehlman shows it in different ways, which I used recently in a letter on inequality.


Source: Bruce Mehlman

Here’s another one comparing stock market growth with family net worth. This isn’t really surprising since we know the top quintile owns most of the stocks. The lower 80% see little direct benefit. But the magnitude of the disparity is still remarkable.


Source: Bruce Mehlman

I agree with you that the following is the most discouraging trend:

While most Americans think of the US as being a country of great economic mobility and opportunity, its economic mobility rate is now one of the worst in the developed world for the bottom. As shown below, in the US, people in the bottom income quartile have a 40% chance of having a father in the bottom quartile (in the father’s prime earning years) and people in the top quartile have only about an 8% chance of having a father in the bottom quartile, suggesting half of the average probability of moving up and one of the worst probabilities of the countries analyzed. In a country of equal opportunity, that would not exist.


Source: Ray Dalio

This is yet another cause of the widening political and social divides. When parents no longer have hope their children can lead better lives, when children no longer feel they can rise above, the result is higher partisanship and populism.

[Sidebar: Ray does a more in-depth analysis of education, productivity, and economic outcomes in his Part 1. His analysis of the dismal state of public education in the United States is particularly discouraging.]

Is Capitalism the Problem?

You argue that capitalism is not achieving its goal of more equitably distributing the fruits [read: profits] of capitalism. To your point, my good friend Ben Hunt of Epsilon Theory notes that the S&P 500 companies have the highest earnings relative to sales in history.


Source: Ben Hunt

Let me push back with what is admittedly a small quibble in the grand scheme of things. I think of capitalism more in the context of property rights, rule of law, and free markets. Properly understood, it provides a level playing field for entrepreneurs to offer goods and services that produce incomes and profits. I don’t think equitably distributing those profits is capitalism’s role.

Ensuring that all participants are treated fairly and, to some extent, regulating these personal and corporate endeavors is the role of society in general and government in particular. So when you say that capitalists are not very good at sharing profits, I would say that capitalism is not designed to do so. That is the role of society and government.

Yes, capitalists are part of that society, and in general prefer to keep more of their profits and have less regulation. I agree that “capitalists” are not very good at distribution because of their own self-interest. And as you point out, when people begin to sense that their own particular interests are not being fairly addressed, there is the potential for political crisis. Quoting rather extensively from your letter:

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. While one might hope that when such economic polarity and poor conditions exist, leaders would pull together to reform the system to both divide the economic pie and make it grow better (which is certainly doable and the best path), they typically become progressively more extreme and fight more than cooperate.

In order to understand the phenomenon of populism, two years ago I did a study of it in which I looked at 14 iconic cases and observed the patterns and the forces behind them. If you are interested in it, you can read it here. In brief, I learned that populism arises when strong fighters/leaders of the right or of the left who are looking to fight and defeat the opposition come to power and escalate their conflict with the opposition, which typically galvanizes around comparably strong/fighting leaders. The most important thing to watch as populism develops is how conflict is handled—whether the opposing forces can coexist to make progress or whether they increasingly “go to war” to block and hurt each other and cause gridlock. In the worst cases, this conflict causes economic problems (e.g., via paralyzing strikes and demonstrations) and can even lead to moves from democratic leadership to autocratic leadership as happened in a number of countries in the 1930s.

We are now seeing conflicts between populists of the left and populists of the right increasing around the world in much the same way as they did in the 1930s when the income and wealth gaps were comparably large. In the US, the ideological polarity is greater than it has ever been and the willingness to compromise is less than it’s ever been. The chart on the left shows how conservative Republican senators and representatives have been and how liberal Democratic senators and representatives have been going back to 1900. As you can see, they are each more extreme and they are more divided than ever before. The chart on the right shows what percentage of them have voted along party lines going back to 1790, which is now the greatest ever. In other words, they have more polar extreme positions and they are more solidified in those positions than ever. And we are coming into a presidential election year. We can expect a hell of a battle.


Source: Ray Dalio

I sadly agree that we are entering a period of rather severe partisanship. As a long-time participant in the political process, I think we are further from reasonable discussion and compromise than at any time of my life. I suspect you would agree as we are almost the same age.

Let me offer some thoughts on how the conflicts will unfold, and then present another possible solution. As you will see, I think MMT would make our problems even more intractable and raise the likelihood of a severe crisis…

(TO BE CONTINUED)

Next week we will deal with Ray’s further analysis of our problems (some of which I agree with) and then we’ll get into the most significant dispute, that of using MMT.

I think this is an important conversation, not just between two people but throughout the entire nation. The answers to the questions posed by the problems we agree upon will make a huge difference to both our society and our children’s future. Not to mention our own future.

Boston, New York, and ???

I am enjoying the beautiful weather here in Puerto Rico. At the end of the month, Shane and I will fly to Boston to be with our good friends Steve Cucchiaro and (his future bride) Jama to help celebrate their wedding. Then Shane goes to California for a week while I meet with my Mauldin Economics partners in Boston, and then take the train down to New York for a few days of meetings and media. Then on July 4 I fly to…? Well, I’m not sure. The next destination is up in the air as no meetings have been confirmed. Hopefully I will know by this time next week. Then I will meet up with Shane and we will go back to Puerto Rico.

Puerto Rico, or something, has been very good for me. Ten years ago I developed what my doctor (Mike Roizen, author of many best-selling books and otherwise known as Oprah’s doctor) diagnosed as late onset high blood pressure. Sometime around age 59 someone took my blood pressure dial, which for all my life had been quite normal, and cranked it to the right.

Mike told me, “There are 10 things that are important about staying healthy and the first three are blood pressure, blood pressure, and blood pressure.” He put me on two standard blood pressure medicines. They brought my blood pressure back under control. A few years later I stopped taking one of them as my blood pressure became more stable.

In my latest checkup, this year they found a little plaque in one of my arteries. In addition to prescribing a mild statin, Mike really stressed the importance of my diet. Shane has me eating mostly fish and chicken, in addition to cutting out cheese and dairy. This has been good for my weight but oddly, a few weeks ago, my blood pressure began to drop significantly.

The answer was to adjust my blood pressure medicine to an even smaller dose. I seem not to need as much because my body likes either the fish or the island lifestyle. Maybe some of both. It will be interesting to see if I reach the point where I don’t need any medicine at all. One can dream…

It’s time to hit the send button. I want to thank the many people who have been talking with me about Ray Dalio’s writings (you know who you are). This has been a significant learning experience for me and it certainly helped clarify my thinking about what I have been calling The Great Reset and Japanification. The cloudy crystal ball is getting a little bit clearer.

Let me wish you a great week and, if you are in the Midwest, a little sunshine and less rain!

Your rapidly developing an island lifestyle analyst,

John Mauldin

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dbudzynski@earthlink.net

June 9, 1:58 p.m.

There are two problems:
1) Growing income inequality
2) Progressive plans to reduce inequality by transforming the country into a collectivist/socialist/communist government.  If they’re successful, over the long run, this will result in everyone being equally poor rather than unequally prosperous.

I think almost all readers of this article are concerned about the second problem, but are afraid that if we don’t we don’t address the first problem, we’ll be stuck with the second problem.

Instead of trying to make Capitalism perfect, which isn’t going to happen.  Why don’t we focus on educating the people on the problems with socialism and addressing the root causes of income inequality.

Redistributing the wealth does not address the root causes of income inequality.  There are many root causes of income inequality, some of them include:

- Simultaneous increase in dual income families and single parent families.  The rise in single parent families alone increases income inequality.  High income people tend to marry each other, which increases the inequality.
- Education inequality (focusing on spending money rather than getting good results, soft bigotry of low expectations in minority communities, pushing progressive ideology rather than reading, writing, & arithmetic, etc.).  Some public schools in the US are the best in the world and some are the worst.  This inequality could be eliminated if we focused more on results, rather than spending.
- The system for determining CEO pay has been inflating pay compounding at a rate that has been too high.  There isn’t a good link between CEO pay and long term results. 
- When the public is willing to pay outrageous ticket prices for sports, concerts, etc. it results in athletes and entertainers being overpaid.
- The flood of illegal unskilled labor in this country depresses the wages of unskilled labor in this country.  The period when income inequality was lowest was when immigration in this country was restricted to almost nothing.
- The reality of the global economy is that unskilled workers are not as valuable as they were before we imported as much as we do now.
- Automation has made unskilled labor less valuable.
- etc.

Don’t expect income inequality to go away by tweeking Capitalism and ignoring the root causes of income inequality.

Dan Budzynski

jay@jdcommercialpartners.com

June 9, 10:41 a.m.

John,

I think your analysis of this is on track.  Some small data points that are never discussed by economists or by pundits from the extreme right or extreme left:
  1- Our educational system is designed to help students learn facts, fit into society and “get a job”.
  2- Most of the wealth created (not inherited) in this century appears to have been done by people who did not complete or who completely ignored what the educational system tried to impose on them and did not just trade “hours for dollars”.
  3- If the wealth created by these “misfit entrepreneurs”, i.e., Steve Jobs, Bill Gates,Jeff Bezos, Mark Zuckerberg, etc is removed from charts, what would happen to the trend of “wage growth”. (One could argue that Ray Dalio fits in this category)
  4- The bottom quintile of society shown in the charts seems to neither increase or decrease.  Is this an example of government assistance not working as expected?

Like you, I admire Ray Dalio and his record of recognizing opportunities.  However, it’s my belief that a critical review of our economic system that focused on how to create income for those who society has labeled “the bottom” could see opportunities that would cause a tsunami of economic growth. 

Thank you again for all of the hard work you put into your weekly writings.  It has been fascinating to see the growth of your organization as you approach the age that others are only thinking of a new place to play golf.

BTW- the attorney that I use for tax deferred entities has just moved to Puerto Rico.  His name is John also.  I tell my friends, two of the smartest people I know are named John, they’ve both moved to Puerto Rico.  Why am I still sitting on the sidelines and watching?

Blessings,

Jay Davis

 

Daniel Kennedy

June 9, 9:28 a.m.

Capitalism mainly benefits the customer and should be called Customerism.  No one is forced to buy from or work for anyone – all transactions are voluntary. The customer freely chooses to enter any transaction and does so for his/her benefit. If the capitalist doesn’t serve the customer he/she will fail. It is truly “Power to the People”. It incentivizes work, innovation and progress. It decentralizes wealth and therefore power.  It has raised more people out of poverty than any other system in human history. It has done more to improve the quality of life for everyone on the planet than any other system in human history. Ask yourself - would you rather live in China under Mao or in China today now that it has accepted private property and markets?

Fascism/Socialism/Marxism is “Power to the State”.  It incentivizes centralization of control. While the private sector is rewarded for efficiently satisfying customers, the public sector is rewarded by loyalty to superiors and amassing and centralizing power. Public sector bureaucrats are in fact punished for efficiency and problem solving - they lose funding and therefore status and power. Every page, every sentence, every word of legislation and regulation is fertilizer that enables public sector bureaucrats to grow the bureaucracy and the power of the state. It has given us Hitler, Stalin, Mao, Pol Pot, Castro, Chavez, Maduro, the Kim family etc. etc. etc.

From Chinese economist Zhang Weiying:
“We human beings always seek happiness. Now there are two ways. You make yourself happy by making other people unhappy - I call that the logic of robbery. The other way, you make yourself happy by making other people happy - that’s the logic of the market.” Which way do you prefer?

greg wilbur

June 9, 6:54 a.m.

In your article, you suggest there are 3 major components of our economic system: Society, Government and Capitalism. We all recognize that the economy is not working well on distribution for the last 4+ decades, getting remarkably worse in the last 25 years. We see labor getting less, corporate earnings higher and the wealth disparity between the bottom and the top at a new peak.

So what has changed:
- Society: certainly we see the affects of social media, but can’t quite see how that would cause the symptoms.
- Government: again some changes, perhaps some of their policies are at fault, but all around the world its the same problem. Hmmm maybe it is somewhere else.
- Capitalism: there have been enormous changes here. The free flow of global capital (WTO from GATT), transnational supply chains, “Free” Trade Agreements, ... its gone GLOBAL

So to me, the real issue is that our Government has given up its power to control the capitalists. The driver for MMT is to somehow have governments operating within its national borders control Global Capitalism. This is unlikely to succed - the power balance is wrong.

I expect after its collapse, we will see the end of Global Capitalism as Countries regain their economic sovereignty. Hopefully this time, we can avoid a world war.

mrrich@hal-pc.org

June 8, 10:13 p.m.

After reading this I went back and read your posting from 2017 showing the 60/40 statistics.
After reading many of the charts it occurred to me that the upper 40% will skew the future. Thinking about Patric Cox presentation at SIC19. The “wealthy” have a significantly great advantage to be part of the 100+ year old club and that won’t change with a correction or recession. That almost seems like a contradiction.

jim.prestridge@att.net

June 8, 6:21 p.m.

In some ways, capitalism is similar to a lottery. In a lottery, you buy a ticket and let luck take its course. In capitalist system, you enter, participate and let luck let take its course. In both situations, luck is a big factor. The difference is that in the capitalist system your effort, risk and personal decisions can influence luck – giving you a better shot at the prize.
It’s intuitively obvious that if there is no big payoff in a lottery, folks won’t play. The smaller the payoff, the fewer the players. Somehow, it’s not equally obvious that if there is never a big payoff in the capitalist system, the same problem is likely to result – fewer players, fewer risk takers and less entrepreneurial effort. In both cases, there needs to be a potential net reward large enough for people to play. It also helps, in both cases, to know there are some actual winners.
The capitalist system is not broken, but the political system is. The perpetual myth that you can fix income equality problems by taxing the rich is both wrong and dangerous. The Grace Commission popped that bubble when it determined in 1984 that if all earners making more than $75,000 ($184,466 in 2019 dollars) were taxed at 100%, it would fund the government for 7 days. Maybe it’s a few more days now, but the point is the same. Likewise, the perpetuation of this myth becomes a rationale for investing in politically popular social programs in preference to ones that would lead to productive growth and a bigger pie.
The political issues are well known. The Simpson-Bowles deficit reduction plan was unceremoniously shelved. Well known structural problems such as the dismal state of our K-12 system are left unaddressed as congress sits in a gridlocked stupor.
In my view, by belling the capitalist cat, we are ignoring the elephant in the living room, a broken, oligopolistic two-party system. If anything is to be done, the correct target needs to be identified as the first step.“Fixing” capitalism is not the answer and leads in the wrong direction.

Ronald levin

June 8, 6:20 p.m.

A fine description of the problem, but so far not a small hint of in what way Dalio is wrong.  I suspect that when we will have had all of Mr Mauldin’s response, we shall find that Dalio is not in any way wrong, but in every way discomforting to those who have profitted economically and politically from Republican/capitalistj/conservative ideology.

It may be too late to find a a political/social/economic fix in this atmosphere of superpartizanship, intentionally created by Gingrich and later the Tea Party (remember the “principled” balanced budget faction of the GOP?).  An honest conversation between Dalio’s ideas and an intelligent, decent conservative like Mauldin could lead to emergence of new Republican leaders with a, clear realistic and honest vision that could work with the Democratic Center to unscrew-us-up.  First on the agenda needs to be restoration of the Constitution and separation of powers and honoring of democratic norms.

Too bad its probably too late to arrest climate change and that is an even bigger existential threat than the greed of the top 1%.

RobertsJim@aol.com

June 8, 5:48 p.m.

Ray is off the track. There’s nothing wrong with Capitalism. It’s the only means by which wealth is created. The operative word is “capital.” Even socialists need capital without which no wealth can be created.

It’s the distribution of wealth that is causing the angst. The rich are getting richer compared to everyone else. But MMT (money-printing) won’t solve the problem. If it could, then Zimbabwe, Venezuela and Argentina would be lands of milk and honey.

What likely will enable the working class to share productivity gains is to wean our nation from the credit economy bequeathed to us by FDR and by Richard Nixon. When the former decoupled our currency from gold and when the latter severed the dollar’s last link to this historic store of value is when the “asset class” began its ascendancy and when the working class began treading water.

Combine this step with government policies that prevent it from living beyond its means; that is, borrowing to make up the shortfall between its revenue and its spending. There will be a gnashing of teeth as the Federal trough is emptied; our military presence abroad is reduced and the size of our government and the scope of its services is diminished

Dramatic and socially disruptive, yes but better than the collapse of the nation

Jim Hall

June 8, 2:23 p.m.

ARRGH…
The problem is NOT capitalism. It is a failure of our democracy and the elites who are entrusted with it.  They failed in the US, although not in countries such as Sweden.

The information technology and communications revolution enabled tremendous wealth creation and the top 20% (of whom I am one) took the wealth and protected themselves from deleterious consequences, redistributing part of it to the poor and leaving the middle to fend for themselves.

The result fits classic regime change theory.  The election of 2016 was not about Hillary vs. Trump, it was about regime change.

L M C Clark

June 8, 2:12 p.m.

It is unclear whether capitalism would work in this day and age because we don’t have it.  We have crony capitalism and favoritism for the powerful.  Worse, we have special interest money distorting politics and a world increasingly dominated by giant corporations (and the special interest groups).  FT reported since 2000 the number of public companies declined from 7000 to 4000 (other ~7500 to 3700) while private companies went from 2000 to 8000.  This is not a triumph of capitalism since increasingly public companies are swallowed by private equity (not exactly profiting the “common man”).  The legal system and body politic, statutes and regulations designed by politicians and lawyers, have created this humongous distortion.  The disheartending aspect is not seeing any way to create a negative feedback loop to mitigate the positive flow of money to politics.  The Supreme Court has ruled any and all money is fine, constitutional.  It may be constitutional but it clearly is not to the benefit of the nation.  I’ve veered off to political money but it is all tied to a “capitalism” that is not capitalism.

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