Barclays Head of US Equity Strategy & Global Equity Linked Strategies Venu Krishna discusses earnings momentum on Making Money.
BlackRock CEO Larry Fink warned in the letter from its annual chairman that wealth inequality could worsen if more people do not participate in the financial markets to reap the benefits of investing.
Fink said the vast majority of wealth has flowed to people who own assets, as opposed to those who earned most of their income through work, and warned that artificial intelligence (AI) could worsen this trend.
“Since 1989, a dollar in the U.S. stock market has grown more than fifteen times the size of a dollar tied to average wages. Now AI threatens to repeat that pattern on an even larger scale – concentrating wealth among the companies and investors positioned to capture it,” Fink wrote.
He said that at the enterprise level, those companies that have the “data, infrastructure and capital to deploy AI at scale are positioned to gain disproportionate advantage.”
BLACKROCK CEO SAYS TRUMP ACCOUNTS COULD BE A ‘VERY IMPORTANT STEP’ FOR YOUNG AMERICANS
BlackRock CEO Larry Fink. (Victor J. Blue/Bloomberg via Getty Images)
“That’s not unusual, and none of this is inherently problematic. Market leadership has always changed as a result of technological change,” Fink said. “The broader question is who gets to share in the profits. When market capitalization rises but ownership remains limited, prosperity can seem increasingly distant to those on the outside.”
He noted that it is unclear what impact the use of AI will have working populationespecially for novice clerks.
BLACKROCK: As Americans Struggle to Save for Retirement, 71% Support This TRUMP PROPOSAL
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| BLK | BLACKROCK INC. | 981.35 | +5.29 |
+0.54% |
Fink added that automation has historically increased productivity and over time broadened the range of work available, even as certain roles were shifted. However, he cautioned that “new roles take time to emerge, and employees do not always transition seamlessly from the old to the new.”
“One thing is clear: AI will create significant economic value. Ensuring that participation in that growth also expands is both the challenge and the opportunity,” he wrote.
Fink went on to discuss ways to broaden participation in the financial markets access to the market for a larger share of Americans.
BLACKROCK’S LARRY FINK SAYS STILL THE BEST DESTINATION FOR GLOBAL INVESTORS TO PARK MONEY
BlackRock CEO Larry Fink said expanding market participation is key to tackling inequality. (Angus Mordant/Bloomberg via Getty Images)
He said that the newly created Trump accounts could be a “very important step” in encouraging young people to put their money into the market.
Trump Accounts are savings accounts given to newborns that are littered with money from the government and philanthropic benefactors, as well as parental contributions that are invested in a broad index of U.S. stocks. They can also be made for people under the age of 18 and are held in custody by a parent or guardian until the child turns 18.
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Fink said such market-based approaches could also be used for programs like Social security to stabilize the safety net program, which is close to bankruptcy in less than a decade.
