In 2011 – the #1 highest paid person in the world was a hedge fund manager named Ray Dalio – founder of Bridgewater Associates based in Westport, CT; he made $3 billion last year. Most people do not understand how the huge gaps in income inequality leads to a broken economic and thus political system. It’s very to imagine a well functioning democracy where people prosper in a system that allows for 50 million people to require food stamps to feed themselves but a person can make $3 billion and pay a lower tax rate than the average middle class family; there is no example in history of that kind of wealth gap and an economically prosperous country.
Alternet puts that sort of prodigious wealth in perspective:
#1 - It would take the typical U.S. family 29.2 YEARS to earn as much as Mr. Dalio earned in one HOUR.
#2 - That’s as much as 60,673 typical U.S. families earn.
#3 - That’s enough to hire 85,911 entry level teachers.
#4 - That’s enough to hire 17,143 pediatricians.
#5 - That’s enough to wipe out the student loan debts for 120,000 graduates.
#6 - That’s enough to wipe out the negative equity of 46,153 average homeowners.
#7 - That’s enough to cover the per person average health care costs of 397,984 Americans.
#8 - That’s more than the Gross Domestic Product of the 5 poorest African nations combined.
#9 - That’s enough to feed 62 million hungry school children for a year.
Kevin Roose at NY Mag wrote a very insightful article on the man and his hedge fund – he noted:
<In 2010> the firm put up the best numbers in its 36-year history, notching a nearly 45 percent gain in its most aggressive fund on its way to a total haul of more than $15 billion. Those returns—which CNBC noted were greater than the 2010 profits of Google, Amazon, Yahoo, and eBay combined—vaulted Bridgewater even further ahead in the hedge-fund rankings and reportedly netted Dalio a personal windfall of more than $3 billion.
Forbes profiles the top 40 highest earning hedge fund managers…three of which made more than $2 billion and twenty-eight of which made more than $100 million in 2011 alone. The vast majority of these individuals are largely supportive of the Republican party financially because of the “carried interest” loophole which the Republican congress will not allow to be eliminated. The “carried interest” loophole essentially allows these hedge fund managers to pay only 15% on their personal incomes even though their personal income is made by charging people a percentage fee on SOMEONE ELSE’s money. Bain Capital lobbied aggressively for this loophole and Mitt Romney has said both publicly that he felt it should stay at 15% and then more recently he was unwilling to take a position on the issue publicly.
The sad state of affairs here is that this is an IMPROVEMENT in terms of limiting the obscene wealth and profits within the Hedge Fund industry – Forbes writes:
For most hedge fund managers, 2011 was a year to forget. The average hedge fund fell by 5% even as the U.S. stock market eked out a tiny gain. Big shot investors like billionaire John Paulson were humbled and lost massive amounts of money. Yet even in a down year, arguably its worst ever, the hedge fund industry demonstrated its unmatched ability to make people rich.
Charlie Rose interviews Ray Dalio – founder of Bridgewater Associates.
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