Yale economist and Nobel laureate Robert Shiller says America should start preparing for a day when inequality is much worse than it is now.
In a new interview with David Wessel, who remains a contributor at The Wall Street Journal despite having left for a position at the Brookings Institution, Shiller says the wealthiest of the wealthy must begin redistributing their income much more aggressively.
We should start preparing for a day, maybe 10 or 20 years in the future, when inequality may be much worse. We don’t yet know whether it’s going to be worse. We should have a contingency plan now. The simple idea I have is raising the taxes on the rich, which sounds like the most politically inexpedient move right now, but the nice thing is that when you talk to people about risks of the distant future, they are more idealistic and more sharing in their attitudes.
If higher tax rates do prove unfeasible, Shiller advocates expanding the scope of charitable deductions, as well as capping how many more billions existing billionaires can make. “You’ll still be a billionaire, so what?” he says, calling out “selfish people at the top who don’t want to give it away.”
You could turn into a Bill Gates or an Andrew Carnegie. I think that’s OK. Instead of just taxing people — saying, “We’re just taking the money, and you’ll go to jail if you don’t turn it over” — we can find a better way.
In the rest of the interview, Shiller explains why certain people, including himself, are capable of picking stocks, why bubbles may prove useful in the long-run, and whether you should be investing in housing.