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An Interview with Michael Spence

Summary:
This week in Say More, PS talks with Michael Spence, a Nobel laureate in economics, senior fellow at the Hoover Institution, Professor of Economics Emeritus, and former dean of the Graduate School of Business at Stanford University. Project Syndicate: After the US presidential election, you and David W. Brady concluded that the record-breaking voter turnout was “a sign not of a healthy democracy but of an anxious one.” One factor driving that anxiety is steadily rising income and wealth inequality, which a moderate wealth tax, you wrote in 2019, could partly address. Because the Senate could remain in Republican hands – pending today’s runoff elections in Georgia – President-elect Joe Biden’s ability to change the tax code may

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This week in Say More, PS talks with Michael Spence, a Nobel laureate in economics, senior fellow at the Hoover Institution, Professor of Economics Emeritus, and former dean of the Graduate School of Business at Stanford University.

Project Syndicate: After the US presidential election, you and David W. Brady concluded that the record-breaking voter turnout was “a sign not of a healthy democracy but of an anxious one.” One factor driving that anxiety is steadily rising income and wealth inequality, which a moderate wealth tax, you wrote in 2019, could partly address. Because the Senate could remain in Republican hands – pending today’s runoff elections in Georgia – President-elect Joe Biden’s ability to change the tax code may be severely limited. If not a wealth tax, are there other solutions that are more amenable to the kind of bipartisan compromise some 60% of Americans crave?

Michael Spence: An interesting and important set of questions. The data suggest that the large turnout on both sides (but especially among Democrats) was driven by the desire to prevent the opposite side from winning the White House.

But this was mainly a presidential-election trend; the results of congressional and state elections were driven by different factors. Among them were most likely fast-rising income and wealth inequality – undoubtedly a major contributor to today’s economic, social, and political polarization – and distrust of elites on both sides. To reverse this trend over time, government could employ many instruments, including more progressive income taxes, low-cost delivery of high-quality public services (such as education and health care), a higher minimum wage, and greater wage-setting power for labor. Some version of a guaranteed basic income would help reduce poverty, but would not solve the whole problem.

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Spence recommends

We ask all our Say More contributors to tell our readers about a few books that have impressed them recently. Here are Spence's picks: