Happy Days are Here Again — for some people. The ultra wealthy are doing very well, thanks to tax breaks and an administration that favors them in many ways.
In actual fact, however, there are ultra wealthy capitalists who are worried about capitalism’s future.
They see what happened 100 years ago when the roaring 1920s sunk America into a major depression that almost destroyed the prevalent economic system.
Two key successful capitalists have expressed concern in The Wall Street Journal. Ray Dalio, who has made Bridgewater Associates the world’s largest hedge fund manager, noted that he believes “all good things taken to an extreme become self-destructive and that everything must evolve or die. This is now true for capitalism.”
He is joined by James Dimon, chief executive of JP Morgan Chase & Co. and considered the country’s most successful banker, who earned $31 million in 2018, thanks to a $2 million raise from 2017. He wrote in his annual letter to shareholders, “In many ways and without ill intent, many companies were able to avoid — almost literally drive by — any of society’s problems during the recent period of time.”
Both Ray and Jim love capitalism, but they are extremely concerned. Ray wrote an essay stating the problem relates to the growth of debt, the widening of inequality and the resulting rise of populism. As noted in The Wall Street Journal, he thinks inequality has fueled populism and ideological extremism, which he fears means capitalism will be either abandoned or “left unreformed.”
Jim says, “Policy has too often become disconnected from the analytics; we got slogans instead. It’s driving people apart.”
In late April, more business people joined the choir and took center stage at the annual Milken Institute Global Conference in Los Angeles, a business conference for the top business echelon founded by Michael Milken, a former banking mogul. The theme focused on “Driving Shared Prosperity” at a time, according, to The Associated Press, “when democratic socialism is ascendant and presidential candidates talk about raising taxes on the rich.”
Perhaps it would be appropriate to look back at what happened at the 1931 Democratic Governors Conference, held at the French Lick Springs Hotel in Indiana. As noted by Seymour Martin in his book about this period, “the economic crisis of the 1930s was more severe in the United States than in any other large society except Germany.”
Franklin Delano Roosevelt, a protege of privilege, was selected by a scared collection of wealthy people to save capitalism from collapse. It was at the French Lick gathering that he was drafted and agreed to run for president. The result was an alphabet-soup list of New Deal programs, such as the WPA, CCC, NLRA, TVA, as well as Social Security and many others, that allowed Roosevelt, as noted by The Hoover Digest, to play “a unique role in keeping the country politically stable during its greatest economic crisis.”
It was an era of compassionate capitalism, when forces who had “the most” pulled back to strengthen the safety net. In doing so, they created a savior to orchestrate a step backwards so that, later in the century, they could survive to take many steps forward in their interest.
Clearly, enlightened capitalists today are fearing their future unless basic reforms are endorsed and implemented that focus on rebuilding the middle class, co-opting the disgruntled, strengthening the safety net and toning down divisive rhetoric.
The challenge for everyone is to realize what the bottom line will be if the road taken continues down the present path. The main political issue will be whether our country, with its economic system can deliver economic security, social justice, health care, affordable housing and other essential safety-net services for all its citizens. To paraphrase poet Robert Frost, it might be necessary to take the road less traveled, in order to make that happen in America.