This is a story about capitalism.
It's a system I love
because of the success and opportunities it's afforded me and millions of others.
I started in my 20s trading commodities,
cotton in particular, in the pits,
and if there was ever a free market free-for-all, this was it,
where men wearing ties but acting like gladiators
fought literally physically for a profit.
Now, fortunately, I was good enough
that by the time I was 30, I was able to move into
the upstairs world of money management,
where I spent the next three decades as a global macro trader.
And over that time, I've seen a lot of crazy things in the markets,
and I've traded a lot of crazy manias.
And unfortunately, I'm sad to report
that right now we might be in the grips
of one of the most disastrous, certainly, of my career,
and one consistent takeaway is,
manias never end well.
Now, over the past 50 years,
we as a society
have come to view our companies and corporations
in a very narrow, almost monomaniacal fashion
with regard to how we value them,
and we have put so much emphasis on profits,
on short-term quarterly earnings and share prices,
at the exclusion of all else.
It's like we've ripped the humanity
out of our companies.
Now, we don't do that,
conveniently reduce something to a set of numbers
that you can play with like Lego toys,
we don't do that in our individual life.
We don't treat somebody or value them based on their monthly income,
or their credit score,
but we have this double standard when it comes to the way
that we value our business, and you know what?
It's threatening the very underpinnings of our society.
And here's how you'll see.
This chart is corporate profit margins going back 40 years
as a percentage of revenues,
and you can see that we're at a 40-year high of 12.5 percent.
Now, hooray if you're a shareholder,
but if you're the other side of that,
and you're the average American worker,
then you can see it's not such a good thing.
Now, higher profit margins do not increase societal wealth.
What they actually do is they exacerbate income inequality,
and that's not a good thing.
But intuitively, that makes sense, right?
Because if the top 10 percent of American families
own 90 percent of the stocks,
as they take a greater share of corporate profits,
then there's less wealth left for the rest of society.
Again, income inequality is not a good thing.
This next chart, made by the Quality Trust,
shows 21 countries from Austria to Japan to New Zealand.
On the horizontal axis is income inequality.
The further to the right you go, the greater in the income inequality.
On the vertical axis are nine social and health metrics