Does economic inequality provide incentives for success? Does it introduce instability into the financial system? A political scientist, Jacob S. Hacker and Robert J. Shiller, an economist discuss how inequality affects government, markets, and the risks faced by ordinary people
Q: How do you think about economic inequality and whether it leads to risks in people’s lives?
Shiller: We have something like 15 million homeowners underwater on their mortgages, meaning they owe more on their mortgages than their homes are worth. Nothing is being done for them.
The Soviet Union is no longer, but it still spooks us. I think people are right not to just assume that the benevolent government is going to fix everything. But I also think it’s logical for the government to worry about public goods and infrastructure and education and all these important things. And yet people want to dismantle that. I think there’s a deep reaction to historical experience and the rhetoric around the idea of big government.
[This article has been reproduced with permission from Qn, a publication of the Yale School of Management http://qn.som.yale.edu]