The Crash Plus 1: What about the growing gap between rich & poor?

Woman furious at empty purse

To have and have not in America: Are you worried about the growing gap between the rich and the poor?

The gap between rich and poor reached record levels in 2008—right before the crash—when it was the widest it has been since 1929.

The crash has only aggravated the divide. Disparities in wealth are even greater now. More and more wealth is concentrated at the top and the poor are getting poorer. The middle class is ailing, occupying a fragile place between the rich and poor.

In a congressional hearing a few years ago, Alan Greenspan, former Fed chairman, said that increasing income inequality “is not the type of thing which a democratic society—a capitalist democratic society—can really accept without addressing.”

Increasing inequality erodes community—our trust of one another, the extent to which we help one another. Robert Putnam found, for example, that more inequality means lower social capital.

Almost three-quarters of Americans said the gap between rich and poor in America is too large, according to a national survey I conducted in June 2009. Would you say the same thing?

The growing divide may be another long-lasting outcome of our economic times—and with it, the continuing erosion of our social fabric.

Is rising income inequality incompatible with our capitalist democratic society, as Greenspan said? His use of two adjectives to describe our society points to an inherent tension: inequality is bad for democracy, but it is an outcome of capitalism.

How do you feel about the widening gulf between rich and poor?
    Do you see its effects around you?

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