How American Income Inequality Hit Levels Not Seen Since The Depression [View All]

WASHINGTON (Reuters, By Emily Kaiser) - In 2007, when the world was on the brink of financial crisis, U.S. income inequality hit its highest mark since 1928, just before the Great Depression.

Coincidence? Maybe not.

Economists are only beginning to study the parallels between the 1920s and the most recent decade to try to understand why both periods ended in financial disaster. Their early findings suggest inequality may not directly cause crises, but it can be a contributing factor.

This raises a host of social, economic and political questions. Should public policy aim to reduce inequality, and if so by what means? Does concentrated wealth at the top of the income spectrum generate asset bubbles, or vice versa? Could raising taxes or interest rates ward off financial meltdowns?

Read more: http://www.huffingtonpost.com/2010/10/22/income-inequality-america_n_772687.html

30 years of declining/stagnating wages. What did they thing was going to happen?