Billionaire hedge fund founder Ray Dalio contends that “capitalism is basically not working for the majority of people.”
Dalio has spoken about inequality for years. He has warned that artificial intelligence will help to worsen it, Barron’s explained.
In a recent speech in Las Vegas, Dalio cited a Federal Reserve survey statistic that 40% of U.S. households could not raise $400 in case of emergency without selling something.
Dalio said if he had the power to do so, he would declare the wealth gap and opportunity gap a “national emergency.”
If the government “created metrics that literally judged the conditions of people, and then took responsibility for changing those metrics, there’s a lot that can be done in private-public partnerships and so on to be able to change it,” he said. “But I fear that probably will not be done by the next time we have a downturn, and I fear for what that conflict is going to be like,” Barron’s quoyed Dalio as saying.
Dalio isn't alone in warning about the economy's future.
However, JPMorgan Chase's retail chief predicts that worry over impending U.S. recession might actually cause one.
"This late-cycle recession has the potential to become a self-fulfilling prophecy," JPMorgan Chase Co-President Gordon Smith said during a recent financial conference held in New York, CNBC.com reported.
"There is a great deal of volatility in the equity markets, a great deal of conversation around how late we are in the cycle and worry about the cycle," Smith said. "That will ultimately lead to business confidence deteriorating, it will ultimately lead to [corporate] reductions in spending, that will ultimately lead to a shorter work week for hourly-paid people, which will ultimately lead to unemployment beginning to rise, and we would've developed our own recession," Smith said.
Smith, who runs JPMorgan's consumer banking division, says the U.S. economy looks "extremely strong," CNBC.com quoted him as saying.
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