Income inequality - Interesting facts from a book review

The Economist of June 23, 2012 (p.84) reviewed the book "The Price of Inequality:  How Today's Divided Society Endangers our Future" by Joseph Stiglitz.  

We hear frequently from politicians what a wonderful country we are because in no other country do the poor have such opportunity to rise to success.  The review begins by noting that while the American Dream may live on in Politics, as demonstrated by Barack Obama, it is much less evident in the rest of society.  In Denmark 75% of those born in families from the 20% of poorest circumstances and in Britain 70% of lower class British residents rise out of their humble beginnings.  In the US fewer than 60% manage to scramble up the ladder. 

It is also far less common for people in the lowest 20% in the US to rise into the top 20% than it is in Denmark or Britain.

The richest 1% in the US gained 93% of the additional income created in 2010.  But generally the public doesn't realize the extent to which the richest take the most in the US.  A survey in 2011 found that most American's thought that the richest 20% of Americans had 60% of the wealth, when in fact the they have 85%.  The average American thought the ideal was 30%.

Mr. Stiglitz argues this income inequality is a function of the richest shaping the law to their benefit.  Mr Stiglitz ask that we imagine that the world allowed free movement of labor, but not Capital (the reverse of the current situation).  Mr Stiglitz argues that countries would compete to attract workers with laws creating a fairer society.

The reviewer notes some weaknesses in Mr. Stiglitz's argument.  The review notes:
1.  That high income inequality has been the norm through much of human history, the period in the the developed world from 1950 to 1980 when western societies were much more equal was unusual.  
2.  That Spain and Ireland also went through property bubbles , and they are much more equal societies, so the housing collapse can't be pinned on income inequality,  and 
3.  That Mr. Stiglitz's solutions assume a Congress much more responsible than the one that has characterized the last decades.

The review ends by noting that regardless of whether Mr. Stiglitz has the right answers, the question is crucial. Income inequality is bound to have negative social and political consequences.