Martin Wolf of the Financial Times draws attention to a key finding by Raghuram Rajan: “of every dollar of real income growth that was generated between 1976 and 2007, 58 cents went to the top 1 per cent of households…This is surely stunning.” It is indeed stunning. The story of the last 30 years is basically that the rich did spectacularly well, the middle class stagnated, and the poor faced greater dislocation. I think we can all agree that this does not accord with Catholic social teaching.
This should clearly be the nail in the coffin of the supply-side nonsense (that, plus the fact that supply side reforms did not unleash any higher productivity as promised). Keep this in mind when considering the debate over whether the Bush tax cuts should expire or not. See the chart for who would gain:
Do we really want the super-rich to keep getting more and more?
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