SACHA PFEIFFER, HOST:
The word affordability got a lot of use by candidates in the lead-up to last week's U.S. elections, like New York City's 34-year-old mayor-elect, Zohran Mamdani, a democratic socialist. When he was campaigning, he focused relentlessly on how increasingly expensive New York has become.
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ZOHRAN MAMDANI: Ultimately, what I think binds us together is that shared belief that this is a city that should be affordable and by building a tent around that affordability.
PFEIFFER: That was in July when Mamdani spoke with Morning Edition's Leila Fadel. Since then, more and more politicians have been talking about the rising prices of seemingly everything. Virginia's governor-elect, Abigail Spanberger, centered her campaign on the high cost of living.
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ABIGAIL SPANBERGER: We have a lot of challenges facing our communities, whether it's challenges of affordability in housing, health care and energy.
PFEIFFER: Meanwhile, affordability seems to have become a trigger word for President Trump. He says many prices have come down since he was reelected.
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PRESIDENT DONALD TRUMP: It's no good if we do a great job, and you don't talk about it. And I don't think they talk about it enough. You know, they have this new word called affordability, and they don't talk about it enough. The Democrats did. And the Democrats make it up because we took over a mess.
PFEIFFER: Across the country, voters are feeling squeezed by rising prices and inflation while the wealthiest continue to pull way ahead. And Americans are not alone. Half the world's population owns only 1% of its total wealth. In other words, wealth has become extremely concentrated. What are the repercussions of the ever-increasing wealth gap and what can be done about it? We're going to put that question to Nobel Prize-winning economist, Professor Joseph Stiglitz of Columbia University. Professor Stiglitz, welcome to the show.
JOSEPH STIGLITZ: Nice to be here.
PFEIFFER: When you look at the results of last week's U.S. elections, what message do you hear related to affordability?
STIGLITZ: Well, clearly, voters are feeling strapped. They're concerned about their standards of living. And when people talk about affordability, what they're really talking about - can they make ends meet? It's their incomes. And in a place like New York, affordability has a lot to do with rents, and that's true in many other places around the country. But Mamdani also talked about all the other key ingredients of affordability.
PFEIFFER: The new mayor of New York City, Zohran Mamdani, just elected.
STIGLITZ: Yes. He talked about food. He talked about transport, you know, all the things that make up for a cost of living, and Americans are just getting a sticker shock. Basically, what they're seeing, in spite of President Trump promising that he was going to do something about affordability, things have gone exactly the opposite way.
PFEIFFER: And how do you think that's influencing how they vote?
STIGLITZ: Oh, I think it's saying, you know, you promised us one thing. You didn't solve it, and you've actually made things worse. One are the tariffs. And, you know, he won't admit it, but every economist say (ph) that a tariff is a sales tax. It's a tax on what you buy from abroad. And Americans buy a lot of things from abroad, and especially lower-income and middle-income Americans.
PFEIFFER: The U.S. tax system allows many legal tax breaks and other provisions that primarily benefit wealthy and high-income households. Many of those changes were put into place by the Trump administration, and the Trump administration continues to make some changes to the tax system that benefit the wealthy. What role do you think the U.S. tax system plays in the country's wealth gap?
STIGLITZ: Oh, it's a very important role. In fact, what he called the Big Beautiful Bill was analyzed, even by the Republican-controlled Congress in what's called the Congressional Budget Office, and they showed that it's probably, you know, the most regressive tax. And what economists mean by regressive, it was tax cuts for the billionaires, for the rich corporations paid for by the people at the bottom, paid for by cutting back on Medicaid, which provides health care for those who can't afford it. And that's what the government shutdown right now is all about. The Democrats say, we insist on restoration of at least some of the Medicaid cuts. We insist on making sure that the Affordable Care Act, the Obamacare Act, subsidies aren't absolutely devastated. And the Republicans say, in effect, we gave a tax cut to the billionaires and the corporations, and we can't afford giving money to the poor. I did a study that just came out for the G20.
PFEIFFER: This is the G20 Leaders' Summit that will be held this month in South Africa - brings together the world's largest economies.
STIGLITZ: Yeah. And President Ramaphosa asked me to do this study. And just to give you one example of the numbers that came out was the top 1% gathered 41% of all the wealth that's created in the last 25 years. And obviously, we're seeing now in America, especially, what it's doing to our politics.
PFEIFFER: What do you consider the best ways to shrink the wealth gap?
STIGLITZ: Well, there are three broad things to do. First, we have to change the rules of the game to make things more equal, to get wages up, increase the bargaining power of workers, restrict the monopoly power of corporations. So that's where the rules of the game come in. Secondly, one of the problems is we allow one generation to pass on their wealth to the next with very little taxation. They've been really good at avoiding inheritance taxes, and that creates an inherited plutocracy.
PFEIFFER: What is your level of optimism or pessimism that some of the changes you hope to see shrink the wealth gap could actually happen?
STIGLITZ: Obviously, one source of optimism is what happened in the recent election. It's clear that many Americans are waking up to what is happening. A second source of optimism is what is happening - I mentioned before - with the G20, the leaders of these 20 major countries around the world embracing about more than 80% of global income, a large fraction of the global population - the focus on inequality.
PFEIFFER: The U.S. is not participating in that, however.
STIGLITZ: But eventually, if there's a global consensus, we will be forced - eventually, eventually - to join the global consensus, I think. You know, it's not going to be easy, but if the rest of the world is getting united around the theme that global inequality is a problem, eventually we will have to join these global efforts.
PFEIFFER: That is Nobel laureate economist Professor Joseph Stiglitz. Thank you for your time.
STIGLITZ: Thank you.
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