Paying Pandemic Bills Requires Changes In Wealth Gap, Dalio Says

NPR's Noel King Talks to Ray Dalio, founder of the world's largest hedge fund, Bridgewater Associates, about how the economy might change in a post-pandemic world.

RACHEL MARTIN, HOST:

Ray Dalio is known for making lucrative predictions. His hedge fund, Bridgewater Associates, is the largest in the world. But Dalio, who is a billionaire himself, says capitalism is broken. Noel talked with Dalio about how the economy might change in a post-pandemic world.

RAY DALIO: We will have ahead of us the question of, who's going to pay the bills and how will we redefine things? - because we have a large wealth gap. And all of these processes necessitate a lessening of the wealth gap.

NOEL KING, BYLINE: You've been concerned about the wealth gap since before this - before the pandemic. Is there a set of circumstances in which that gets better? And what are those circumstances?

DALIO: Well, history has shown the same things happen over and over again. You have the crash. And the '30s is a great model. There's the United States; there's other countries. And there's a lot of fighting over wealth, just as a basic principle. The United States maintained a civility, but there was a wealth gap. There needed to be a shift in wealth. And there were jobs programs. There were changes in taxation and so on. And the United States did it in the best way in the world.

KING: Over the weekend, the pope, in his Easter address, appeared to endorse a universal basic income - a government guarantee that every citizen receives a minimum income. What do you think about a universal basic income to address some of the structural inequalities that have you so worried that capitalism is not working the way it should?

DALIO: We are now in an era of universal basic income.

KING: Oh, you mean now with the pandemic - people getting checks in the mail?

DALIO: Right. And it won't be adequate. And the only question is how long that lasts. But let's say...

KING: How long should it last, do you think?

DALIO: It has to last long enough so that there's subsistence. It's the quick and easy way for getting a certain amount of purchasing power in the hands of those people. And of course, it's the transfer of wealth, and that should exist. And I think there's a wonderful opportunity here, if we can operate well, to restructure the way the system is working in a way to increase the size of the pie and divide it well.

KING: What does the United States economy look like when this is over?

DALIO: We will have a lot of people suffering financially, not just in - here but around the world. I worry about the anger and the fighting and what that might be like. And we're going to be much more isolated, not just because of the virus but because of the fact that everybody knows that they have to have self-sufficiency, from the individual all the way to the country. In either case, we still have the greatest asset of humanity - the ability to adapt, invent and come up with things. And we will do that effectively, and we will get past it. But it may take a few years, and it may be nasty in the process.

KING: Ray Dalio, thank you so much for being with us. We really appreciate it.

DALIO: Thank you for the opportunity.

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