FYI: Stories Discussed:
.High yielding stocks
.Money made by chance
.Ray Dalio thinks capitalism is broken
.Sometimes your friends beat you
.College grads selling a piece of themselves
.How do financial advisors spend their time?
.Retail pain
.Amazon’s letter to shareholders
.Is voice the future?
.Disney plus
.Pensions have a problem, and it’s not their investments
.House flipping is back
.Where active management really works
.Investing in the real world
Regards,
Ted
https://theirrelevantinvestor.com/2019/04/17/animal-spirits-money-made-by-chance/
Comments
In 1832, the British aristocracy saved itself by agreeing to loosen its grip on power. … The [passed] bill widened Britain’s electorate and diluted the political stranglehold of its landed elites. This was a key reason why Britain escaped Europe’s wave of 1848 revolutions. …
Much the same thing happened again in 1911 …. Once again, the Lords … opted for compromise over the threat of extinction … [voting] in favour of the Parliament act, which deprived the aristocracy ever again of the power to block fiscal legislation. This was how British welfare state was born. Meanwhile, the country’s peers continued to enjoy their status at the top of the ladder. It seemed like a reasonable trade-off. The working classes received social insurance; their social betters got to complain ad nauseam about “Le weekend”.
I was reminded of these key turning points — and indeed of the New Deal … — a few days ago when Ray Dalio, the hedge fund billionaire, wrote a plea to reform American capitalism…. few people have benefited more from today’s capitalism …. The system will never change unless more people like Dalio come round to his way of thinking. One or two others, including JPMorgan’s Jamie Dimon, are also making similar noises, which is good news. But too many still belong in the camp of Steve Schwarzman, the private equity billionaire, and Howard Schultz, the former Starbucks chief executive, both of whom have likened the idea of a wealth tax to Venezuela. A few years ago, Schwarzman compared the proposed — but still unenacted — closure of the “carried interest” loophole to Hitler’s invasion of Poland. I wish I were making that up. Alas, he really did.
As long as the bulk of America’s superwealthy continue to equate progressive taxation with fascism, or communism, they will hasten into being what they most fear. History tells us that elites who do not share power are ultimately doomed (see French revolution). Those with the wisdom and foresight to bend find they are far less likely to eventually break. The question America’s financial and tech elites must ask is “what price social peace?” I would say social peace is worth several carried interest loopholes.