As the U.S. gears up for its next presidential election in 2024, the country needs a “strong middle” political ground and bipartisan cooperation, according to Ray Dalio, founder of investment company Bridgewater.
“If you bring the sides together in a bipartisan way, and you create a strong middle, that’s what the country needs in order to be healthy, I believe,” Dalio said Tuesday in conversation with CNBC’s Dan Murphy on stage at the Abu Dhabi Finance Week.
Two things are crucial for the U.S. in this process, Dalio said: firstly, he assesses that those with extreme political views should be alienated. Secondly, the country needs to “bring together the smart moderates to work together, and then to be able to make important reforms” to enable addressing issues such as the wealth gap.
Concerns about wealth inequality have grown in recent years and been accelerated by the Covid-19 pandemic.
In the second quarter of 2023, the wealthiest 10% of U.S. households held around $7 million on average, whilst the bottom 50% had an average of $51,000, according to a report by the Federal Reserve Bank of St. Louis released last month.
“The wealth gap is a productivity gap. You have to make most people, in one way or another, productive. You can’t just give them money,” Dalio said on Tuesday.
Dalio’s comments come as the U.S. heads for its next presidential election, and recent polls have pointed to potential trouble ahead for incumbent democratic President Joe Biden.
Former President Donald Trump, who could become the Republican presidential candidate again, leads against Biden in five out of six so-called swing states, a survey by The New York Times and Siena College found earlier this month.
Dalio on Tuesday said that both parties face questions about their prospective presidential nominees.
Dalio expects the emergence of an alternative candidate to Trump among Republicans, as the party narrows down its final choice. Democrats are meanwhile facing internal divisions and concerns about Biden’s age, he added.
Both Biden and Trump face criticism not just from their respective opposition, but also from within their own parties.
Trump has been engulfed in controversy about the ongoing investigation into the Jan. 6 Capitol riot led by his supporters, as well as his political stances on topics including abortion rights and immigration. Meanwhile, Biden’s track record holding the top job has been seen critically by voters who cite the challenges of the economy and his difficulties to implement several of his key policies, such as student loan forgiveness.
This makes for a “very interesting and very important” political situation, compounded by differences in values and wealth across the U.S. —which Dalio says will need to be addressed after the election.
“Hopefully we can deal with it together in a peaceful way that makes the country more productive,” he noted Tuesday.