Paul Krugman on inequality:
Paul Krugman talks to Mario Cuomo, Guardian Unlimited (Video): Cuomo: What I want to ask you next is to get to equality... Warren Buffet says there's a class warfare and the rich are winning. I think that's a pretty good description, don't you?
Krugman: People like me call it a second Gilded Age. That's not a bad of exaggeration of that. It's really true by the numbers. You go to Greenwich, Connecticut, and where all the great gilded mansions are and these days, hedge fund managers are buying up those mansions and tearing them down to build stuff that's bigger. So we really are in the second Gilded Age.
Cuomo: I'm going to ask you the practical question now that the voters really should be asking: How do we deal with it? What do we have to do to get more equality here without being considered communists or rabid socialists? What are we doing about - talk about trade policies and education and the question of the Chinese currency, what specific thing do we have to do?
Krugman: OK. Let me say I don't think that the - I don't think the charge of being socialist or communist works as well as it used to.
There is a problem. Americans think they don't like government programmemes, but they actually like the ones they have. ...
The other things - the policies that led to the explosion of inequality were not any one thing. It was just a systematic bias in policies across the board, and resolving it is - tilt the balance back the other way: everything from expanding the Earned Income Tax Credit; more financial support for lower-income students in college. We're becoming the shame of the western world on that in that respect. Higher minimum wages; labour laws that make it easier for unions to organise and much harder for employers to get engaged in union-busting.
You can think of a number of other policies, none of which is actually qualitatively different from things that we already have on the books, but larger quantitatively and I think the combined effect is in fact qualitative - that really do get a significant movement towards greater equality, just as the cumulative effect of the nickel and dime-ing those policies down, under conservatives, led to a great increase in inequality.
Cuomo: I was interested especially in education, where I think it's very possible for people to say, look, one out of four of our workers are high-skilled, which is roughly four years after high school, and that's one of the big problems. This is a high-skill society, etc, etc, and you don't eliminate that as - of course, but then you diminished it a bit and are maybe saying too much about skill level and education.
Krugman: Yeah, by all means. But the huge increase in income gaps has occurred actually within people with a college education or equivalent. The high school teachers and hedge fund managers tend to have roughly similar levels of education actually, but the highest paid hedge fund manager in America was paid enough last year to pay the salaries of all 80,000 New York school teachers for five years. [Laughs] So that's telling you something about where we really are. ...