Ray Dalio, founder of Bridgewater Associates, the world’s largest hedge fund, bewailed that the average statistics hardly reflect the real conditions.
For instance, the average statistics show that the United States is a rich nation. But the truth is that the top 0.1 percent and the bottom 90 percent of Americans each own about a quarter of the nation’s wealth. Such a huge wealth gap was last seen in the 1930s.
The average household income is not telling the true picture either. The figure has been on the rise over the last three decades. But the reality is that only the top 40 percent of Americans have witnessed an increase while the real incomes of the bottom 60 percent have been flat or slightly down.
On average those in the top 40 percent have 10 times as much wealth as those in the bottom 60 percent. That compared with six times in the 1980s.
Americans have become healthier over the last two decades. The mortality rate for those aged 35 to 64 has been flat.
The truth is, the rich have indeed become healthier, while the poor are grappling with drugs and alcohol. Most people feel their life quality has deteriorated, and society has become increasingly divided.
The US had its first black president in Barack Obama. He was succeeded by Donald Trump who rode on the campaign banner of “America First”.
Trump’s populist remarks have made him even more popular. But the public has a love-hate relationship with his administration.
Will society reconcile and regain harmony? It might be difficult.
Income disparity is highly correlated with education. The overall spending on education in the US has increased. But rich families have spent four times as much as low-income households have on education.
This fact may keep children from low-income families from climbing up the social ladder.
Many issues are ignored during times of economic expansion like we’ve seen in the last decade. But what will happen if we head into a recession?
Dalio is deeply worried over the future of politics, society and the economy.
This article appeared in the Hong Kong Economic Journal on July 30
Translation by Julie Zhu
[Chinese version 中文版]
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