DealBook Briefing: Ray Dalio Says Capitalism ‘Needs To Be Reformed’

Jay Owen Transforming Finance, Latest Headlines

April 5, 2019

Good Friday morning. (Was this email forwarded to you? Sign up here.) The March jobs report will be published this morning; here’s what to expect.Ray Dalio

Ray Dalio Jose Sena Goulao/EPA, via Shutterstock

“It doesn’t take a genius” to know capitalism needs fixingCapitalism helped Ray Dalio build his investment empire. But in a lengthy LinkedIn post, the Bridgewater Associates founder says that it isn’t working anymore.• Mr. Dalio writes that he has seen capitalism “evolve in a way that it is not working well for the majority of Americans because it’s producing self-reinforcing spirals up for the haves and down for the have-nots.”• “Disparity in wealth, especially when accompanied by disparity in values, leads to increasing conflict and, in the government, that manifests itself in the form of populism of the left and populism of the right and often in revolutions of one sort or another.”• “The problem is that capitalists typically don’t know how to divide the pie well and socialists typically don’t know how to grow it well.”• “We are now seeing conflicts between populists of the left and populists of the right increasing around the world in much the same way as they did in the 1930s when the income and wealth gaps were comparably large.”• “It doesn’t take a genius to know that when a system is producing outcomes that are so inconsistent with its goals, it needs to be reformed.”

Stay tuned: Mr. Dalio says that he’ll offer his solutions in another essay.


Today’s DealBook Briefing was written by Andrew Ross Sorkin in New York, and Michael J. de la Merced and Jamie Condliffe in London.


Elon Musk and the S.E.C. need their “reasonableness pants”A federal judge gave Elon Musk and the S.E.C. two weeks to resolve a dispute about whether Mr. Musk violated a settlement he reached with the commission, Matthew Goldstein of the NYT reports.Mr. Musk’s tweeting is at the heart of the skirmish. The S.E.C. says that a tweet about Tesla production numbers violated the settlement, in which he promised to get approval from a Tesla lawyer before publishing any Twitter posts that include potentially market-sensitive information.His lawyers insist that the tweet didn’t contain material information. One of them said yesterday that the S.E.C.’s policy on what needs to be vetted was “murky.” Judge Alison Nathan of Federal District Court in Manhattan wondered if there was a “lack of clarity” and whether the settlement should be modified or struck down.“Take a deep breath,” Judge Nathan told both sides. She added that they should put on “their reasonableness pants” to find common ground.This is “something of a victory for Mr. Musk, who could have been fined if he was found to be in contempt,” Mr. Goldstein writes. But Judge Nathan told Mr. Musk that, regardless of how powerful a person he is, a “court order is not optional.”More: Tesla shares fell after it reported delivering fewer vehicles than expected in the first quarter. And the automaker’s electric vehicle competition appears to be catching up.Jeff and MacKenzie Bezos

Jeff and MacKenzie Bezos Evan Agostini/Invision, via Associated Press

MacKenzie Bezos is now worth $36 billion

Jeff and MacKenzie Bezos said yesterday that they had finalized their divorce — and she will keep a big chunk of the Amazon empire. Mr. Bezos will keep 75 percent of the couple’s Amazon stock — which means he will hold about 12 percent of the company’s shares — as well as their family’s ownership interests in the WaPo and the Blue Origin space exploration company. That’s enough to keep his title as the world’s richest man.

More important for him, he’ll keep voting control of Ms. Bezos’s shares. Even if she sells them, the recipient has to agree to hand over voting rights to Mr. Bezos.

Ms. Bezos could have been entitled to half of the couple’s holdings under Washington State law, according to legal experts. It’s not clear what other compensation she is receiving from the split.

But her holdings are valued at about $36 billion, making her one of the wealthiest women in the world. In her first-ever tweet, Ms. Bezos wrote, “Excited about my own plans. Grateful for the past as I look forward to what comes next.”