As we've discussed many times on this program, the gap between the rich and the poor is big and getting bigger in America.
"The distribution of market income became more unequal almost continuously between 1979 and 2007," according to the report from the Congressional Budget Office.
Here's how the numbers break down over that time span:
- Income for the top 1% grew 275%
- Income for the 60% in the middle class grew 40%
- Income for the poorest 20% grew by 18%
This data is pre-crisis but it's a pretty safe bet that the trend has not turned in favor of the middle class given the stubbornly high unemployment rate since the Great Recession. It's these issues of high unemployment and the growing wealth gap that are the foundation for the Occupy Wall Street movement that's spreading across the country.
In the accompanying interview The Daily Ticker's Henry Blodget and guest Mark Dow of hedge fund Pharo Management discuss the increasing schism between rich and poor.
"You don't want to discourage the people who've been successful as long as they've done it legitimately," Dow tells Blodget. "But you want to make sure the playing field is level and perceived as level as best you can."
Dow thinks that while vast wealth is what makes America great, it must also be accompanied by a strong middle class.
"Capitalism when unfettered tends to create great income dispersion and you have to find policies to mitigate because you don't want to kill it," he says. "The magic of America is our dynamism - the fact that you can get ahead."
Here's how he thinks we can enrich the middle class once again:
-- Create a more progressive tax structure
-- Build job retraining programs for manufacturing workers that can't find jobs
But even if these changes are implemented, the good 'ole days in America may be a thing of the past. Today, unlike after World War II, the U.S. faces much stiffer competition from abroad, especially from cheap labor sources in Asia and other emerging markets. Plus, Dow notes, we have an aging workforce of baby boomers who are past their productivity peak.