If we wait until income inequality is much more severe, we will have a whole class of new superrich who will probably feel entitled to their wealth and will have the means to defend their interest. That's already gone far enough. We shouldn't let it become more extreme.
Interpretation
We must address income inequality before it worsens, or we risk creating a class of wealthy individuals who feel entitled and will protect their privileges.
Robert J. Shiller's quote highlights the urgent need to tackle income inequality before it escalates further. He warns that if allowed to grow, a new elite class may emerge, believing they inherently deserve their wealth, which could lead to society's division and instability. By acknowledging the problems associated with extreme wealth disparities now, we can work towards a more equitable future.
In practice
This quote can be used in a discussion about economic policies advocating for wealth redistribution.
Those on the downside of rising economic inequality generally do not want government policies that look like handouts. They typically do not want the government to make the tax system more progressive, to impose punishing taxes on the rich, in order to give the money to them. Redistribution feels demeaning. It feels like being labeled a failure.
Speculative markets have always been vulnerable to illusion. But seeing the folly in markets provides no clear advantage in forecasting outcomes, because changes in the force of the illusion are difficult to predict.
That's the world we live in: when it comes to economics, people have emotions; it's not like chemistry or physics.
Money management has been a profession involving a lot of fakery - people saying they can beat the market, and they really can't.
We should not be focusing on quick solutions. The really important concern for policymakers everywhere is to prevent disasters - that is, the outlier events that matter the most.
I think that a lot of people in all walks of life have the impression, of course, that, 'I specialize in something. I can't - I don't have the time to read other things. I'll just go to pure entertainment when I'm relaxing, and then I'll come back to my pure specialty.' That produces - that attitude produces idiot savants, unfortunately.
No economy can succeed without a high-quality workforce, particularly in an age of globalization and technical change.
I am in favor of cutting taxes under any circumstances and for any excuse, for any reason, whenever it's possible. ... because I believe the big problem is not taxes, the big problem is spending.
We want a free market, but we know that the paradox of a 'free' market is that sometimes you have to intervene. You have to make sure it's not the law of the jungle but the laws of democracy that works.
What many economists fail to understand is that poor people are no less concerned about improving their lot and that of their children than rich people are.
To a person of analytical ability, perceptive enough to realise that mathematical equipment was a powerful sword in economics, the world of economics was his or her oyster in 1935. The terrain was strewn with beautiful theorems begging to be picked up and arranged in unified order.
The budget should be balanced not by more taxes, but by reduction of follies.
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