Alternet has the article by Dean Baker – Massive Inequality Didn’t Just Happen—It Was Engineered by Conservative Government Policies.
The problem is that President Obama wants the public to believe that inequality is something that just happened. It turns out that the forces of technology, globalization, and whatever else simply made some people very rich and left others working for low wages or out of work altogether. The president and other like-minded people feel a moral compulsion to reverse the resulting inequality. This story is 180 degrees at odds with the reality. Inequality did not just happen, it was deliberately engineered through a whole range of policies intended to redistribute income upward.
But the key point is that inequality didn’t just happen; it was the result of government policy. That is why people who actually want to see inequality reduced, and for poor and middle class to share in the benefits from growth, are not likely to be very happy about President Obama’s speech on the topic. His comment about the government being a bystander ignores the real source of the problem. Therefore it is not likely that he will come up with much by way of real solutions.
Those government policies that engineered this problem can be reversed. Then we can try to engineer a policy that does not result in massive inequality. Remember that life and economics are not binary systems. It is not a choice between massive inequality and no inequality. There are an infinite number of possible outcomes between these two extremes. If we had any sense, we would stop pushing for less inequality before we got to the point of making life worse for everybody just so we could get more equality. The goal is not equality for equality’s sake. The goal is to have as decent a living standard for all as is possible. The focus on the current massive inequality is just to show an obvious indicator that we are far from where we ought to be.
In the current situation, massive inequality is a good measure of our not making the economy work to provide at least a decent standard of living for all. Making the economy work for all is the real goal. When inequality is not as massive as it is today, inequality will stop being a good measure of how well we are doing in achieving our primary goal.