Tuesday, December 20, 2016

Zero Hedge — Ray Dalio Praises Trump: Predicts "Huge" Changes; It Will Be "Glorious To Be Rich"

In one of the most euphoric praises for Donald Trump and the president-elect's fledgling administration to date, overnight Bridgewater founder Ray Dalio said economic changes under the Trump administration may be more dramatic than shifts from “the socialists to the capitalists” in the U.K., U.S. and Germany from 1979 to 1982, and predicted that "we are about to experience a profound, president-led ideological shift that will have a big impact on both the US and the world."
Comparing Trump to Margaret Thatcher, Ronald Reagan and Helmut Kohl, Dalio said the incoming administration may have a much bigger impact on the U.S. economy than can be measured by tax changes and fiscal spending. The Trump era could “ignite animal spirits” and attract productive capital.

In his summary of Trump's economic policies, Dalio urges readers to read Ayn Rand "as her books pretty well capture the mindset. This new administration hates weak, unproductive, socialist people and policies, and it admires strong, can-do, profit makers. It wants to, and probably will, shift the environment from one that makes profit makers villains with limited power to one that makes them heroes with significant power."…
By and large, deal-maker businessmen will be running the government. Their boldness will almost certainly make the next four years incredibly interesting and will keep us all on our toes.
The difference between Trump and Thatcher/Reagan seems to be populism. The US and UK are not emerging from a previous period of social democracy (New Deal) or democratic socialism (Old Labour). The US and UK are reacting politically to the inequality resulting from Reagan and Thatcher that goes under the rubric of neoliberalism. Bill Clinton and Barack Obama were more like Ronald Reagan than FDR, or even Nixon. Tony Blair was much more in the mold of Margaret Thatcher than Harold Wilson. Trump realizes that he has two years to do something significant for the middle class workers that voted him in, or his power base will crumble. If there is not significant economic improvement for workers in the 2020 campaign, he will lose his bid for reelection. Moreover, he will face a vicious opposition that will try to stymie his every move. Theresa May is in a similar position in the UK.

Zero Hedge
Ray Dalio Praises Trump: Predicts "Huge" Changes; It Will Be "Glorious To Be Rich"
Tyler Durden

18 comments:

Michael Norman said...

Ayn Rand?

Oh, Jesus. Dalio is nuts. No wonder why this guy's fund is taking a beating.

Matt Franko said...

Goes to Mike's larger point about current sentiment being very bullish....

Unknown said...

"Trump realizes that he has two years to do something significant for the middle class workers that voted him in,"

Given all the deficit hawks he is appointing, I somehow doubt it.

Tom Hickey said...

Given all the deficit hawks he is appointing, I somehow doubt it.

Trump actually said that in a victory speech on his victory tour.

He gets. The question is whether he can pull it off. From his picks, it looks very dubious.

BTW, Larry Kudlow interviewed Warren Mosler a bit ago, and Warren said that Trump's infrastructure plan would take too long and that his best course was middle class tax relief, which could be done right away and would have an immediate effect.

Matt Franko said...

"Trump actually said that in a victory speech on his victory tour."

What was he making a joke out of that Tom?

Do you know which one he said that in? city?

Matt Franko said...

" because it could ignite animal spirits..."

Darwin strikes again...

Bob said...

Trump will have to humiliate these people if he's to do what needs doing. Their ideological sacred cows must be slain.

Ignacio said...

Quotes Ayn Rand...

Doooooooomed. And Ayn Rand boy on congress is running amok.

Tom Hickey said...

Do you know which one he said that in? city?

Don't recall.

Tom Hickey said...

" because it could ignite animal spirits..."

Darwin strikes again...


Keynes.

Tom Hickey said...

This is actually the opposite of Ayn Rand's John Galt, because the plutocrats can't go on strike now. They are in charge. Let's see how they do.

Ryan Harris said...

Trump would do well too insure himself and sway the coastal elites and split academics with research money

Penguin pop said...

I see two possibilities happening here.

Trump either blindly takes advice from the idiot fiscal hawks he's appointed or he does his own thing and doesn't care about what anyone tells him to do. Remember how he was able to lead the GOP into a more moderate direction on LGBT matters. Maybe that could happen again here.

I think he'll go with the latter and pay more attention to what Rex Tillerson, Michael Flynn and Mad Dog Mattis have to say, though I haven't been too optimistic about the direction Trump has been heading in lately. We will see.

Tom Hickey said...

I would be surprised if Trump is not taken in by the government as big firm analogy, which is why he thinks his business skills and those of the people he is appointing will clean up the mess that "liberals" have made, which is largely what he means wrt "draining the swamp."

Penguin pop said...

Yes. For now I am seeing a repeat of Reaganomics with a few more conditions added, mainly wrt to the trade deficit with China and trying to go in a more protectionist direction with it. There will be an explosion in military spending I'm sure.

This blog post summarizes what may also happen.

http://nakedkeynesianism.blogspot.com/2016/12/will-trumponomics-be-expansionary.html?spref=tw

Bob said...

Christmas on Wall Street: The Dow closes in on 20,000
https://www.wsws.org/en/articles/2016/12/21/pers-d21.html

Salsabob said...

With Larry Kudlow as Cheif Economic Advisor coupled with Trump's branding prowess, we'll be getting trickle down on steroids - more hyperbole sells-job and even more flaccid actual economic results. The vast majority of the funds will wind up in T-bills after first blowing up stocks, junk bonds and other secondary markets - all facilitated by deregulating the financial sectore again. Worse, as before, the revenue costs will be the rallying cry to cut federal spending to lower and middle classes (Obamacare, Medicare, Medicaid, Food Stamps, etc.) and make any infrastructure 'spending' a joke. The net result will be contracting rather than stimulating fiscal policy. I suggest a re-reading of the Atlantic's "The Education of David Stockman" to see what we're heading into - just remember, the starting point is much different today; the neoLiberal inequity of today began with Ray-gun, Stockman and friends - the economic dynamo is fundamentally much sicker today and much more susceptible to these clowns' con job.

Ryan Harris said...
This comment has been removed by the author.