Income Inequality: Terms of the Debate

Paul Krugman crystallizes the issue of income inequality(sub. req'd). Yet in spite of all this technological progress, which has allowed the average American worker to produce much more, we’re not sure whether there was any rise in the typical worker’s pay. Only those at the upper end of the income distribution saw clear gains — gains that were enormous for the lucky few at the very top. That’s why the debate over whether the middle class is a bit better off or a bit worse off now than a generation ago misses the point. What we should be debating is why technological and economic progress has done so little for most Americans, and what changes in government policies would spread the benefits of progress more widely.[emphasis mine - CJ] The whole point of economic efficiency is to spread the benefits of a market economy to all members of that society. So, if "a rising tide raises all boats," as supply-siders so frequently claim, why then is it that only yachts seem to be buoyant in this economy?
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