Ray Dalio, the founder of Bridgewater Associates, the world’s biggest hedge fund firm, says people should expect a major shift under President-elect Donald Trump.
“Regarding economics, if you haven’t read Ayn Rand lately, I suggest that you do as her books pretty well capture the mindset,” he wrote in a LinkedIn post on Monday. “This new administration hates weak, unproductive, socialist people and policies, and it admires strong, can-do, profit makers.”
The post continued:
“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. The shift from the past administration to this administration will probably be even more significant than the 1979-82 shift from the socialists to the capitalists in the UK, US, and Germany when Margaret Thatcher, Ronald Reagan, and Helmut Kohl came to power.”
Dalio also suggested that those interested in this shift read Thatcher’s “The Downing Street Years.”
Dalio described Trump as a “deal maker who negotiates hard, and doesn’t mind getting banged around or banging others around.” He added that the president elect had picked a team of people who are “bold and hell-bent on playing hardball” to enact change in economics, foreign policy, education and environment policies.
“It is increasingly obvious 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,” he said.
Dalio also notes that Republicans in Congress have shifted farther to the right on economic issues in recent years.
“Trump’s views may differ in some important ways from the Congressional Republicans, but he’ll need Congressional support for many of his policies and he’s picking many of his nominees from the heart of the Republican Party,” he wrote. “As the chart below shows, the Republican members of Congress have shifted significantly to the right on economic issues since Reagan.”
By comparison, Trump’s cabinet is also very conservative economically. “Trump’s administration is the most conservative in recent American history, but only slightly more conservative than the average Republican congressman,” Dalio wrote.
This isn’t the first time Dalio and Bridgewater have opined on Trump. The day of the election, Bridgewater predicted markets around the world would tank if Trump won, according to an investor note viewed by Business Insider. Markets have since rallied, hitting all time highs.
Then, in mid-November, Dalio said that “we are at one of those major reversals that last a decade.” Building on that thesis on his note December 19, he said Trump’s shift in policy could do more for the economy than is easily estimated through tax cuts and spending plans.
Trump’s policies “could ignite animal spirits and attract productive capital,” the billionaire investor said.
“A pro-business US with its rule of law, political stability, property rights protections, and (soon to be) favourable corporate taxes offers a uniquely attractive environment for those who make money and/or have money.”