Ray Dalio: “U.S. on Path to Civil War as Political Polarization Rises”
(Source Bloomberg) — Ray Dalio warned Thursday that the U.S. appears to be on a “classic path” toward “some form” of a civil war amid a dangerous combination of large deficits, high taxes, inflation and gaps in wealth and values that lead to political polarization.
“When that happens at the same time as there are foreign powers that are becoming strong enough to challenge the leading world power that is encountering this civil war dynamic, it is an especially risky period,” he wrote in a post on LinkedIn. “That is the period I believe we are now in.”
Dalio, the billionaire founder of Bridgewater Associates, said that both the left and right are “fighting to win at all costs,” eliminating moderates and the ability to compromise as a result. He said that a “loss of truth” in the public domain was making some people “too afraid” to speak up or run for public office.
“The biggest question is how much the system will bend before it breaks,” Dalio said. “History shows that the biggest risk to democracies is that they produce such fragmented and antagonistic decision making that they are ineffective and disorderly which leads to bad results and revolutions.”
Other Key Quotes:
“The current financial conditions and irreconcilable differences in desires and values are consistent with the ingredients leading to some form of civil war.”
“Not knowing what is true because of distortions in the media and propaganda increases as people become more polarized, emotional, and politically motivated.”
“When the causes that people are passionately behind are more important to them than the system for making decisions, the system is in jeopardy.”
“When winning becomes the only thing that matters, unethical fighting becomes progressively more forceful in self-reinforcing ways.”
“In the 2022 elections we will see losses by moderates and gains by extremists/populists as each of the parties will have fights between the moderates and the extremists that the extremist-populists will win because each side want fighters not compromisers and moderates will also choose not to run.”
“The Supreme Court will make decisions on contentious issues that people are willing to fight over. There is a big risk that each side will view the decisions as unfairly made by the other side and not accept them, which will lead to tests of power.”
“The most obvious clear marker of going into a bad civil war is people dying. History shows that when people start dying in conflicts – even just a few of them – that one expect much worse because then emotions and the need for retributions fuel more fighting.”
