Are the Rich Getting Richer, and Should I Care?

Are the Rich Getting Richer, and Should I Care?

Earlier this month, the Canadian Financial Post ran a column by Terence Corcoran on "The U.S. Income Divergence Myth." He started with graphs created by economists Thomas Piketty and Emmanuel Saez, including one included in the Obama budget, appearing to show that the percentage of wealth controlled by the top tenth of the richest Americans hovered around 40% just before the Great Depression, plummeted afterwards and stayed relatively stable in the 30%-40% area until the 1980s, then spiked to nearly 50% recently. (I can say "plummeted" and "spiked" about a range of movements of this kind because the graph is helpfully truncated at 30% on the low side and 50% on the high side.) Corcoran pokes holes in a number of aspects of these conclusions, including the exclusion of any consideration of taxes and regional differences in cost of living. He also points out that the increase in the share of the top 10% is almost entirely driven by the top 1% and has a lot to do with the revolution in earnings by pop figures such as entertainers and sports stars.

Then he gets to the question that I think is the most interesting:

Why [does] inequality of incomes — before or after tax —— even matter in a market economy where no kings rule by force and no aristocracy plunders the people?