Principles for Dealing with the Changing World Order [video](youtube.com)
youtube.com
Principles for Dealing with the Changing World Order [video]
https://www.youtube.com/watch?v=xguam0TKMw8
31 comments
He's trying really hard to come up with some overarching theory by picking some very self-serving examples. At least the advice at the end is pretty reasonable even if not very original - make more than you spend, and be kind to other people.
"and be kind to other people."
That has long been some of the best, and least adhered to, advice anywhere.
That has long been some of the best, and least adhered to, advice anywhere.
What I've always struggled to understand about Dalio's statements is how does Modern Monetary Theory fit into things? He seems to believe the government bank account works like a domestic household and my understanding is different. For example you can have as much debt as you like but because of inflation those debts will always be repayable as long as you never try to repay the government debt?
I would say inflation has been prevented by Chinese manufacturing and recent inflation is being caused by price rises in shipping and problems with manufacturing (chip shortages), covid, increases in savings from people WFH for two years and not spending as much on going out, Chinese cost of manufacturing going up and obviously Ukraine and the sanctions against Russia.
We seem to be so sure of the causes of things but you can fit theories on top of history with astonishing ease, it's predicting the future that is difficult. Dalio has been saying we are due for a crash due to printing money for 10 years. Eventually he'll be proven right, but will it be down to the US debt pile or some of the other factors at play in the world. Who can say of sure?
I would say inflation has been prevented by Chinese manufacturing and recent inflation is being caused by price rises in shipping and problems with manufacturing (chip shortages), covid, increases in savings from people WFH for two years and not spending as much on going out, Chinese cost of manufacturing going up and obviously Ukraine and the sanctions against Russia.
We seem to be so sure of the causes of things but you can fit theories on top of history with astonishing ease, it's predicting the future that is difficult. Dalio has been saying we are due for a crash due to printing money for 10 years. Eventually he'll be proven right, but will it be down to the US debt pile or some of the other factors at play in the world. Who can say of sure?
> For example you can have as much debt as you like but because of inflation those debts will always be repayable
If this is true, then why is the government collecting any taxes at all? If any amount of debt is sustainable, I am livid that I have to work for the government 4 months/year.
Also, inflation is a terrible thing. It deeply widens the gap between the rich and the poor. Poor people don't have any assets. Their purchasing power evaporates while those with houses and equities greatly expand their net worth.
If this is true, then why is the government collecting any taxes at all? If any amount of debt is sustainable, I am livid that I have to work for the government 4 months/year.
Also, inflation is a terrible thing. It deeply widens the gap between the rich and the poor. Poor people don't have any assets. Their purchasing power evaporates while those with houses and equities greatly expand their net worth.
> If this is true, then why is the government collecting any taxes at all? If any amount of debt is sustainable, I am livid that I have to work for the government 4 months/year.
If government services were paid for only by government borrowing instead of taxation, you'd still be "working for the government" for some share of your efforts. It would show up as increased inflation instead. (I think this "invisible taxation" would feel like a psychologically better deal to some people, even if everyone was worse off.)
It wouldn't be progressive as in "progressive taxation" any more. Removing progressive taxation has many effects, generally harming the poor more than than the rich and widening the gap between rich and poor, and as you note, general inflation has this effect as well.
So perhaps it's better for the government to collect taxes after all.
If government services were paid for only by government borrowing instead of taxation, you'd still be "working for the government" for some share of your efforts. It would show up as increased inflation instead. (I think this "invisible taxation" would feel like a psychologically better deal to some people, even if everyone was worse off.)
It wouldn't be progressive as in "progressive taxation" any more. Removing progressive taxation has many effects, generally harming the poor more than than the rich and widening the gap between rich and poor, and as you note, general inflation has this effect as well.
So perhaps it's better for the government to collect taxes after all.
Of course the government needs to collect taxes. My comment was a rhetorical one to illustrate the silliness of the idea “any amount of debt is fine”
If that were REALLY true, it shouldn’t matter if the government does or does not collect taxes.
Not sure I’m explaining my self well… so to reiterate:
If any arbitrarily large deficit is acceptable, what would happen if tax revenue fell 90 percent? No sane person supports eliminating taxes…but lots of people believe the national debt can be infinite.
If that were REALLY true, it shouldn’t matter if the government does or does not collect taxes.
Not sure I’m explaining my self well… so to reiterate:
If any arbitrarily large deficit is acceptable, what would happen if tax revenue fell 90 percent? No sane person supports eliminating taxes…but lots of people believe the national debt can be infinite.
Taxes reduce inflation… this is MMT not me saying this stuff. Believe it or not as I understand it spending happens before taxes are collected by the government magically creating the money from thin air.
What a fun video regardless of whether it's correct or not. It comes across as an asmovian psychohistory and that's a fun lens to play with regardless of its utility.
Assuming it's a useful model, where does that leave us? Basically with nothing. The author suggests "spending less than we make, and treating each other well." Or in other words, fiscal austerity and compromising with non-compromisers. If Dalio has examples of nations retreating from the inevitability of collapse, or engineering soft landings, he doesn't share it in the video. Either way, why should a system which inevitably results in big cycles stop producing big cycles. Of course each empire wants to avoid its demise. Wanting to avoid demise isn't a sufficient condition.
What I hoped Dalio would confront, was the possibility of changing cycle producing machine itself. You can start to see where this is going by identifying the change needed in each of the sub-components. Eliminate economic systems which create wealth gaps. Upend the global reserve system entirely. End Westphalian sovereignty. &c &c. Any or all of these naturally lead to big cycle formation and resistance toward changing the system creating big cycles is a tacit endorsement of the big cycle machine which I fully expect to receive (big cycles are good actually!) :)
Assuming it's a useful model, where does that leave us? Basically with nothing. The author suggests "spending less than we make, and treating each other well." Or in other words, fiscal austerity and compromising with non-compromisers. If Dalio has examples of nations retreating from the inevitability of collapse, or engineering soft landings, he doesn't share it in the video. Either way, why should a system which inevitably results in big cycles stop producing big cycles. Of course each empire wants to avoid its demise. Wanting to avoid demise isn't a sufficient condition.
What I hoped Dalio would confront, was the possibility of changing cycle producing machine itself. You can start to see where this is going by identifying the change needed in each of the sub-components. Eliminate economic systems which create wealth gaps. Upend the global reserve system entirely. End Westphalian sovereignty. &c &c. Any or all of these naturally lead to big cycle formation and resistance toward changing the system creating big cycles is a tacit endorsement of the big cycle machine which I fully expect to receive (big cycles are good actually!) :)
The video itself is a super condensed version of his book primarily aimed at the Youtube audience demographic, the book it is based on probably goes much further into depth.
The book's calls to action are as such:
> Know all the possibilities, think about the worst-case scenarios, and then find ways to eliminate the intolerable ones.
> Diversify
> Put deferred gratification ahead of immediate gratification so you will be better off in the future.
> Triangulate among the smartest people possible
Each of these have varying degrees of paragraphs detailing their nuance, but they all come back to the point of making personal decisions to navigate a decline rather than changing the system of decline.
> Know all the possibilities, think about the worst-case scenarios, and then find ways to eliminate the intolerable ones.
> Diversify
> Put deferred gratification ahead of immediate gratification so you will be better off in the future.
> Triangulate among the smartest people possible
Each of these have varying degrees of paragraphs detailing their nuance, but they all come back to the point of making personal decisions to navigate a decline rather than changing the system of decline.
I think Dalio is choosing to focus on what the individual can do to navigate change one cannot control, which is a lot easier for individuals to do compared to what systemic change could be done to make changes for the better, which often requires massive resources, coordination and political capital not available to the average person. That sort of stuff is outside of the scope of what the book is about it seems.
Is deferring gratification still sensible when the future is uncertain? The point is that you give up something in the present in order to get something in the future. But when the future is less reliable, it’s more likely that you’re giving up stuff for no future benefit.
That's right. Deferring gratification is deciding to pass on the mousseline sauce on an ill-fated voyage across the Atlantic. I'd much rather be focused on advancing safer modes of transport than worried about which lifeboat I'm going to head for.
Honesty and the Golden Rule are always good principles, and can direct us to other good principles, when properly applied. (Treating other people the way oneself would want to be treated does not eliminate setting appropriate boundaries while still being respectfully kind as far as possible; or farther :) .) To be effective in doing that, yes, one should avoid debt and have a financial reserve, and further, emergency food & water reserves of at least basics for staying alive (wheat/grains, beans, water, salt?).
And I think being honest and good to one's family and others pays long-term dividends that money and government cannot match.
And I think being honest and good to one's family and others pays long-term dividends that money and government cannot match.
A lot of this feels 'right' and Dalio obviously has proven his investing chops, but I'm a little nervous about the rigor behind these arguments. Can't see any citations in this video - which, fine, most Youtube videos don't - but then the book also lacks citations(!)
Also find it strange that the video references how polarisation is about redistributing vs maintaining the status quo, when we've seen in recent years that both sides are talking just as much about redistributing away from elites, at least in rhetoric
Also find it strange that the video references how polarisation is about redistributing vs maintaining the status quo, when we've seen in recent years that both sides are talking just as much about redistributing away from elites, at least in rhetoric
>A lot of this feels 'right' and Dalio obviously has proven his investing chops, but I'm a little nervous about the rigor behind these arguments. Can't see any citations in this video - which, fine, most Youtube videos don't - but then the book also lacks citations(!)
I think your confusion is that you're seeing this video for it's top layer.
The USA took over as world order leader in the 1900s to 1950s or so. Wherein each empire has a parabolic curve.
https://fred.stlouisfed.org/series/GDPC1
Where in that parabolic curve is the USA? It's still pre-top according to an actual source. It's not post-top like Dalio suggests. Debt levels might suggest the USA is getting to their top.
In fact look at that space between the grey recessions. 2009->2020 was a good run. However, what happened there? 8 years of wealth redistribution under Obama. Ray Dalio says that's exactly how to prevent the inevitable pop. Biden just printed how much money for wealth redistribution? That's what ray dalio specifically recommended.
What's another recommendation in the empire game? Education. What do you think happened in the last 10 years? People are smarter today because of the internet and their phone in their pocket. This has already been seen as revolutionary in education.
The USA isn't over their peak. Ray Dalio knows that's true. Now think again about what this video really said.
I think your confusion is that you're seeing this video for it's top layer.
The USA took over as world order leader in the 1900s to 1950s or so. Wherein each empire has a parabolic curve.
https://fred.stlouisfed.org/series/GDPC1
Where in that parabolic curve is the USA? It's still pre-top according to an actual source. It's not post-top like Dalio suggests. Debt levels might suggest the USA is getting to their top.
In fact look at that space between the grey recessions. 2009->2020 was a good run. However, what happened there? 8 years of wealth redistribution under Obama. Ray Dalio says that's exactly how to prevent the inevitable pop. Biden just printed how much money for wealth redistribution? That's what ray dalio specifically recommended.
What's another recommendation in the empire game? Education. What do you think happened in the last 10 years? People are smarter today because of the internet and their phone in their pocket. This has already been seen as revolutionary in education.
The USA isn't over their peak. Ray Dalio knows that's true. Now think again about what this video really said.
> People are smarter today because of the internet and their phone in their pocket.
Is that so? From where I sit, it doesn’t seem access to the world’s information has been a factor in how “smart” people are at all.
Slight aside, can you look up a single education metric improving since the creation of the Dept of Education?
Is that so? From where I sit, it doesn’t seem access to the world’s information has been a factor in how “smart” people are at all.
Slight aside, can you look up a single education metric improving since the creation of the Dept of Education?
>Is that so? From where I sit, it doesn’t seem access to the world’s information has been a factor in how “smart” people are at all.
So there are other factors other than 'smart' like blood pressure, stress, distraction, addictions. I'm not saying mobile phones have not come without troubles.
50 years ago the 'smart' people were your jeopardy folks who had tons of facts memorized. You can just google all those things instead and be just as smart. It is a reality that today someone with a cellphone is tremendously smarter. Better yet, simply having advanced science our facts are even better.
>Slight aside, can you look up a single education metric improving since the creation of the Dept of Education?
When the movie idiocracy came out it was common to show this: https://en.wikipedia.org/wiki/Flynn_effect
Not even taking cellphones into effect people are tremendously smarter today.
You're also probably seeking: https://www.oecd.org/education/ where they track these things. They've expanded to other stuff that I don't necessarily agree with but to each their own.
So there are other factors other than 'smart' like blood pressure, stress, distraction, addictions. I'm not saying mobile phones have not come without troubles.
50 years ago the 'smart' people were your jeopardy folks who had tons of facts memorized. You can just google all those things instead and be just as smart. It is a reality that today someone with a cellphone is tremendously smarter. Better yet, simply having advanced science our facts are even better.
>Slight aside, can you look up a single education metric improving since the creation of the Dept of Education?
When the movie idiocracy came out it was common to show this: https://en.wikipedia.org/wiki/Flynn_effect
Not even taking cellphones into effect people are tremendously smarter today.
You're also probably seeking: https://www.oecd.org/education/ where they track these things. They've expanded to other stuff that I don't necessarily agree with but to each their own.
Smarter how? Whatever you're referring to, it doesn't seem to actually produce better outcomes. The smart people who achieved success 50 years ago certainly didn't do it by memorizing a lot of facts.
>Smarter how? Whatever you're referring to, it doesn't seem to actually produce better outcomes. The smart people who achieved success 50 years ago certainly didn't do it by memorizing a lot of facts.
I provided a couple big sources. I feel like it's generally considered that education is working well.
Even consider the educational value of youtube. I have a video in my watch later on how to fix a leaning fence.
I'm not sure what you might be asking for.
I provided a couple big sources. I feel like it's generally considered that education is working well.
Even consider the educational value of youtube. I have a video in my watch later on how to fix a leaning fence.
I'm not sure what you might be asking for.
Your sources aren't relevant to the point. You haven't established any causality, or even made a plausible case for it. In the US at least, educational outcomes as measured by standardized tests haven't significantly improved.
At the very least high school graduation rates have generally gotten better [0]. I don't think people are smarter as in higher IQ, but I wouldn't underestimate how much benefit we've had. I'm sure I'm not the only one that's learned to program from tutorials on the internet. How much productivity has been gained just from stackoverflow alone?
1. https://www.brookings.edu/blog/brown-center-chalkboard/2020/...
1. https://www.brookings.edu/blog/brown-center-chalkboard/2020/...
That’s not success. They are passing because we refuse to fail them. It would hurt feelings and future success chances.
It’s entirely opposite of the point you want to make.
It’s entirely opposite of the point you want to make.
> Now think again about what this video really said.
Don't vaguepost. If you've got a point, say it.
Don't vaguepost. If you've got a point, say it.
>Don't vaguepost. If you've got a point, say it.
Sorry, you're right. I just figured nobody was reading my post anyway and it was getting long. Obviously I'm not telepathic and don't know dalio knows, but he's a smart dude. I'm sure he looked at real gdp.
It comes down to 'I found a problem that's 40 years out' or whatever #. It's not exciting. There's in fact multiple other huge problems to address first.
Fossil fuel exhaustion, Top soil erosion, End of fertilizers and migration to meat eating, actual climate change thresholds, etc happens sooner. Though obviously none of those are until 10-30 years or so.
It's not that he's blowing his issue out of proportion for $, well maybe he is, but he's saying what has to happen to prevent it and it has to start now. Obviously, education, no deficit spending, and wealth redistribution are his key 3. He's basically parroting Milton Friedman who identified this problem many decades before.
Weapons of mass destruction break his predictions about post-top reality. China will NEVER be able to attack the USA directly. Nukes, bioweapons. Covid lab leak? You think the USA doesn't have something that could easily wipe out asia? We are in a different collapse situation for empires compared to each since QINQ.
Sorry, you're right. I just figured nobody was reading my post anyway and it was getting long. Obviously I'm not telepathic and don't know dalio knows, but he's a smart dude. I'm sure he looked at real gdp.
It comes down to 'I found a problem that's 40 years out' or whatever #. It's not exciting. There's in fact multiple other huge problems to address first.
Fossil fuel exhaustion, Top soil erosion, End of fertilizers and migration to meat eating, actual climate change thresholds, etc happens sooner. Though obviously none of those are until 10-30 years or so.
It's not that he's blowing his issue out of proportion for $, well maybe he is, but he's saying what has to happen to prevent it and it has to start now. Obviously, education, no deficit spending, and wealth redistribution are his key 3. He's basically parroting Milton Friedman who identified this problem many decades before.
Weapons of mass destruction break his predictions about post-top reality. China will NEVER be able to attack the USA directly. Nukes, bioweapons. Covid lab leak? You think the USA doesn't have something that could easily wipe out asia? We are in a different collapse situation for empires compared to each since QINQ.
Thanks. Not vagueposting, then.
("Vagueposting", in my book, is when someone wants to hint what their position is, but not actually say it. It's like dogwhistles, except that it's not necessarily about race. They want to attract people toward their position, without being exposed to the criticism that would come from an open statement of it - at least, that's what I suspect their motivation is.
Thinking that your post is getting too long isn't the same thing at all. So, my apologies.)
("Vagueposting", in my book, is when someone wants to hint what their position is, but not actually say it. It's like dogwhistles, except that it's not necessarily about race. They want to attract people toward their position, without being exposed to the criticism that would come from an open statement of it - at least, that's what I suspect their motivation is.
Thinking that your post is getting too long isn't the same thing at all. So, my apologies.)
what the article really misses is why this is happening, and it boils down to 3 things: soft power, hard power, and ideal.
The decline of soft power was a direct consequence of Washington moving from a pragmatic good-faith actor to a rhetorical dogmatic broken record. nations increasingly couldnt count on washington to meet them on common ground in a disagreement, and instead saw lawmakers ritualistically park the USS blow-you-up carrier off their coast as a crass enforcement of their capitulation. equally onerous was the famed US economic sanction which showed up unannounced for everything from poorly structured oil sales to overly socialist domestic policy. Countries instead bolstered their anti-ship defenses and turned to alternative markets, leaving Washington hollow. The number of countries we currently sanction yet depend on for financing our debt is practically a boys club nodding halfheartedly to US fist-shaking, and the prospect of parking a carrier outside any country worth the dosh is really only enticing if you expect it to patrol the ocean floor a half hour after its arrival.
Hard power is similar. The soviet union was only ever 5-6 years behind the US at best, and so long as you understand your adversary then its pretty easy to counter them. Russia has fifty years of tailor-made doomsday arsenal specifically purposed for deterring the US, which it openly shares with most nations that find themselves in the crosshairs of the stars and bars. similarly, the US hasnt won any of the foreign excursions its found itself since perhaps the first gulf war. Afghanistan was a black eye, Iraq was a road map to a sectarian holocaust, and the combination of low morale and low recruitment has made the US an almost ghostly figure of what it was in the seventies. perhaps the most damning coffin nail here however is that virtually no one in leadership at any level will admit outright that recent wars failed, or that any lessons could be learned.
rounding third base into home we have ideal; its a little intangible at first. The US is a first world nation that struggles with food insecurity, homelessness, healthcare, and a living wage. it holds the worlds highest prison population, routinely shuffles past the weekly gun crime atrocity, and rarely holds its lawbringers to account. you'd move here, but only if it were your last option as housing is unaffordable at any level. Traffic in major cities is unbearable yet somehow no new works projects can ever commence as the might of singular senators gridlocked in endless partisan debate can be enough to torpedo funding entirely. The iris of government seems hopelessly fixed on a forty year old culture war as the doddering gerontocracy we call a legislature tables such groundbreaking resolution as to affirm 'in god we trust' on the dollar, or advance a ban on critical race theory.
The decline of soft power was a direct consequence of Washington moving from a pragmatic good-faith actor to a rhetorical dogmatic broken record. nations increasingly couldnt count on washington to meet them on common ground in a disagreement, and instead saw lawmakers ritualistically park the USS blow-you-up carrier off their coast as a crass enforcement of their capitulation. equally onerous was the famed US economic sanction which showed up unannounced for everything from poorly structured oil sales to overly socialist domestic policy. Countries instead bolstered their anti-ship defenses and turned to alternative markets, leaving Washington hollow. The number of countries we currently sanction yet depend on for financing our debt is practically a boys club nodding halfheartedly to US fist-shaking, and the prospect of parking a carrier outside any country worth the dosh is really only enticing if you expect it to patrol the ocean floor a half hour after its arrival.
Hard power is similar. The soviet union was only ever 5-6 years behind the US at best, and so long as you understand your adversary then its pretty easy to counter them. Russia has fifty years of tailor-made doomsday arsenal specifically purposed for deterring the US, which it openly shares with most nations that find themselves in the crosshairs of the stars and bars. similarly, the US hasnt won any of the foreign excursions its found itself since perhaps the first gulf war. Afghanistan was a black eye, Iraq was a road map to a sectarian holocaust, and the combination of low morale and low recruitment has made the US an almost ghostly figure of what it was in the seventies. perhaps the most damning coffin nail here however is that virtually no one in leadership at any level will admit outright that recent wars failed, or that any lessons could be learned.
rounding third base into home we have ideal; its a little intangible at first. The US is a first world nation that struggles with food insecurity, homelessness, healthcare, and a living wage. it holds the worlds highest prison population, routinely shuffles past the weekly gun crime atrocity, and rarely holds its lawbringers to account. you'd move here, but only if it were your last option as housing is unaffordable at any level. Traffic in major cities is unbearable yet somehow no new works projects can ever commence as the might of singular senators gridlocked in endless partisan debate can be enough to torpedo funding entirely. The iris of government seems hopelessly fixed on a forty year old culture war as the doddering gerontocracy we call a legislature tables such groundbreaking resolution as to affirm 'in god we trust' on the dollar, or advance a ban on critical race theory.
>nations increasingly couldnt count on washington to meet them on common ground in a disagreement, and instead saw lawmakers ritualistically park the USS blow-you-up carrier off their coast as a crass enforcement of their capitulation.
This has been happening since the beginning of the US. For example: U.S. presidents refused to recognize Haiti until Abraham Lincoln along with their attempts to establish a military base. It kind of pokes a hole in your theory that there is a decline in soft power if this behavior was also occurring during the US's rise.
>rounding third base into home we have ideal; its a little intangible at first. The US is a first world nation that struggles with food insecurity, homelessness, healthcare, and a living wage. it holds the worlds highest prison population, routinely shuffles past the weekly gun crime atrocity, and rarely holds its lawbringers to account. you'd move here, but only if it were your last option as housing is unaffordable at any level.
You seem to touch upon the topics discussed in Chris Hedges book: America The Farewell Tour.
I also want to point out that the housing market in the US is probably the best out of the disasters occurring in all the other traditional "western" countries like Canada, UK, France, etc. Also China cannot sustain their 1 million dollar+ apartments. That is a massive bubble that will eventually collapse (eg. Evergrande failure)
>Traffic in major cities is unbearable yet somehow no new works projects can ever commence as the might of singular senators gridlocked in endless partisan debate can be enough to torpedo funding entirely.
This seems to be an issue in some states but many other states don't have as serious of restrictions. The issue is not lack of housing, its lack of housing in desired places people want to live in this point in time. (The increase in population of the southern states from people leaving California will change what is the "desired" places to live).
This has been happening since the beginning of the US. For example: U.S. presidents refused to recognize Haiti until Abraham Lincoln along with their attempts to establish a military base. It kind of pokes a hole in your theory that there is a decline in soft power if this behavior was also occurring during the US's rise.
>rounding third base into home we have ideal; its a little intangible at first. The US is a first world nation that struggles with food insecurity, homelessness, healthcare, and a living wage. it holds the worlds highest prison population, routinely shuffles past the weekly gun crime atrocity, and rarely holds its lawbringers to account. you'd move here, but only if it were your last option as housing is unaffordable at any level.
You seem to touch upon the topics discussed in Chris Hedges book: America The Farewell Tour.
I also want to point out that the housing market in the US is probably the best out of the disasters occurring in all the other traditional "western" countries like Canada, UK, France, etc. Also China cannot sustain their 1 million dollar+ apartments. That is a massive bubble that will eventually collapse (eg. Evergrande failure)
>Traffic in major cities is unbearable yet somehow no new works projects can ever commence as the might of singular senators gridlocked in endless partisan debate can be enough to torpedo funding entirely.
This seems to be an issue in some states but many other states don't have as serious of restrictions. The issue is not lack of housing, its lack of housing in desired places people want to live in this point in time. (The increase in population of the southern states from people leaving California will change what is the "desired" places to live).
Right now "printing money" seems to be the theory of choice so everything wrong with the world is because of printing money.