Do We Really Need Income Inequality to Create Economic Growth?

Former CIA Analyst and targeting Officer Nada Bakos posted the video above on Twitter with the comment "Middle class are hardly distinguishable from the poor in US" (you can also read her blog here). The video makes the point, with a series of graphic presentations, that some inequality is one thing, but the amount of income inequality in the US is really obscene.

Over time, income inequality in the US was at its highest level right before two catastrophic historical episodes: the Great Depression and the current Subprime Mortgage Crisis (see my analysis of the data here). These events and the trends in income inequality might just be coincidentally related, but I doubt it! Minimally, none of this benefited the mass of people that had to suffer through it. Saying that people were better off in 1930 and 2007 than they were in 1873 because of economic growth is small comfort. Saying that obscene levels of income inequality are necessary for economic growth is a stretch. Saying that the US is moving toward Socialism is even a greater stretch (in a Socialist society, there would be equal distribution of income as pointed out by the video).