Alexandria Ocasio-Cortez has a point about the ‘trifecta of inequality’: El-Erian
Democratic Congresswoman Alexandria Ocasio-Cortez is right about the negative effects of inequality but wrong when she says a society with billionaires is an immoral one, said Allianz’s chief economic adviser, Mohamed El-Erian.
“If you create Facebook in your dorm, of course, you should be a billionaire,” El-Erian said, adding that wealth inequality is “a good thing — you incentivize.”
But El-Erian said he agrees with New York’s Alexandria Ocasio-Cortez about how the gap between rich and poor unfairly narrows economic opportunity for many Americans.
El-Erian made the comments to Editor-in-Chief Andy Serwer in a conversation that aired on Yahoo Finance in an episode of “Influencers with Andy Serwer,” a weekly interview series with leaders in business, politics, and entertainment.
During his tenure as CEO, El-Erian helped PIMCO grow its assets under management to as high as $2 trillion. At the same time, he led a team of advisers who instructed President Barack Obama on global development. Before that, he took charge of the billions in Harvard University’s endowment and worked as deputy director at the International Monetary Fund.
Since 2014, El-Erian has served as the chief economic adviser at Allianz, the parent company of PIMCO.
“This country can actually tolerate an inequality of income and wealth,” El-Erian said. “When it becomes a trifecta of income, wealth, and opportunity, that’s a real problem.”
That “trifecta of inequality” took hold after the Great Recession in 2008, El-Erian said. He urged the country to put forward an infrastructure overhaul and redistributive fiscal policies to reverse the trend.
In a $4.7 trillion budget proposal submitted to Congress on Monday, Trump requested $200 billion in infrastructure spending as part of an effort to leverage a total of $1 trillion in public-private investment.