The Inequality Conundrum

Writing in The Boston Globe, the columnist James Carroll said the current economic system is “eroding democracy”.
As common sense in science is lost with the continued stagnation of our energy base and deep troubling theoretical foundational issues in physics, so too, Civilization's Survival Parameters fly out of sight, out of mind, along with the values and morals inherent within new scientific understanding which new energy systems would reveal.

June 10, 2007
NYT: The Way We Live Now
The Inequality Conundrum
By ROGER LOWENSTEIN
In 1976, Richard Freeman wrote a book called “The Overeducated American.” So many Americans had been getting college degrees that the relative wages of white-collar professionals had started to fall. It no longer paid to go to college and, for most of the ’70s, fewer people did. Just so, incomes of the educated began to rise again.
People like Freeman, a labor-market economist, waited for the cycle to turn. They expected that with white-collar types riding high again, more people would stay in school, and incomes at the top would level off once more.
But they never did. Instead, the rich kept getting richer. Across the spectrum of American society, the higher your income category, the more your income continued to grow. And for a quarter-century, albeit with zigs and zags along the way, that rich-get-richer pattern has held. The figures are striking. In 2004, according to the Congressional Budget Office’s latest official analysis, households in the lowest quintile of the country were making only 2 percent more (adjusted for inflation) than they were in 1979. Those in the next quintile managed only an 11 percent rise. And the middle group was up 15 percent. Do you sense a pattern? The income of families in the fourth quintile — upper-middle-class folks with an average yearly income of $82,000 — rose by 23 percent. Only when you get to the top quintile were the gains truly big — 63 percent.
Numbers like that have made inequality a hot topic, not only for liberals but also for Bush administration officials like Henry Paulson, the secretary of the Treasury. The press is full of stories of the outlandish wages of the superrich, like the 25 hedge-fund managers who each earned at least $240 million last year (the top dog took home $1.7 billion). Democrats are giving tougher scrutiny to trade bills and are now thinking the unthinkable: tax hikes for the rich. Inequality “isn’t good as an economic matter,” says Steven Rattner, an investment manager and contributor to Democratic politicians, “and it’s not good as a moral or social matter .. full text