Paul Tudor Jones takes the stage of the Inside ETFs conference to discussed the JUST ETF, and how by following the will of the American Worker, you can do well by doing good.
Paul Tudor Jones: Wealth Disparity And Income Inequality
Assets in private equity and venture capital strategies have seen significant growth in recent years. In comparison, assets in the hedge fund industry have experienced slowing growth rates. Q2 2021 hedge fund letters, conferences and more Over the six years to the end of 2020, hedge fund assets increased at a compound annual growth rate Read More
I had no idea ETF nation was so huge. I shouldn't I shouldn't be surprised though. The only equity allocation. That I have personally and that I've ever owned personally is actually an ETF and that's the just ETF and I'm proud to say that it really makes me happy to own that ETF and you'll understand why. In a few minutes. This is a story about capitalism how is floundering in its current form an ETF that might just say that. Before I get to the ETF part. I'd like to take a little bit about our history and our origin story. Capitalism love capitalism. I wouldn't be here today if I didn't have the opportunities that it affords. I don't think any of us would be and for centuries if you think about it business has been the driver of American growth and prosperity in this country. But today we're at a crossroads. Wealth disparity, income inequality and the lack of mobility are causing huge social fissures. When you think about it 150 million Americans according to Federal Reserve Board can't raise a thousand dollars for a family emergency. Thousand dollars. But we've got a couple of Americans who by themselves could solve the plight of those 150 million. I haven't seen this kind of.
I think social divide since I was a kid in the late 60s and 70s. The good news this time around is that pot's legal.
Bu it's a scary time for someone who grew up and who prospered in the private sector according to a Harvard study. 51 percent of millennials todayeither do not believe in capitalism oppose it or believe in socialism. And that's really scary but it shouldn't come as a surprise. Right. If you think about it 82 percent of all the wealth generated last year went to the top 1 percent. The richest 26 people in the world have a net worth equal to the lowest three point eight billion people. So I don't think this is sustainable. I don't think any of us think it's sustainable. And younger generations obviously notice all this. So the historian Walter Shadel has written that this level of income inequality and wealth disparity usually ends in Cataclysm whether it's war revolution or pandemics and just so we're clear we had the highest level of income inequality disparity in the history of this country. And it's there and it's not always been that way and it wasn't envisioned that way. Adam Smith famously said if justice is removed. The great the immense fabric that is human society today must in a moment crumble in ADAMS So how do we get here. How do we get to this level of income disparity is so different from certainly when I grew up. Let's go back to 1970 1970 that the marginal tax rate had just come down from 90 percent to 70 percent. Wealth inequality was one fifth one fifth or 20 percent of what it is today. And that's when my hero and I remember him so clearly because I was an economics major at the University of Virginia. Milton Friedman famously said the social responsibility of a corporation is to increase its profits. Now those words were like catnip to the lions and tigers in the boardrooms across corporate America. In 1995 the bottom 90 percent of Americans owned 35 percent of the wealth. Last year the bottom 90 percent own 23 percent of the wealth. That 12 percent having gone from the poorest of the poor to. The top 1 percent the most wealthy. The primacy of profits for investors and executives has come at a great cost to all the other corporate stakeholders so that when I think about stakeholders in a company you've got shareholders. You have employees you have consumers you have communities and you've had the planet or the environment. Those are the five stakeholders and can of any corporate to create equation areas and governments.
Also see PTJ warns of collapse