Income Inequality - Good or Bad?

Is income inequality good or bad?  

The answer seems to depend on what goal you are seeking to achieve.

If your goal is to maximize the economic strength and vitality of the United States, history shows pretty clearly it is bad.  In the last 100 years the two periods where income inequality rose rapidly ended in the two most crippling economic collapses, the great depression and the great recession.  The long period from the late -1930's to early 1980's where income inequality was falling or stable at lower levels was marked by a very long period of pretty stable and strong growth.

The average American should be against income inequality.  A survey from about a year ago found the average American, if they had an income of $70,000 a year, felt comfortable and secure and was willing to commit more time to enjoying life.  Because for average Americans wealth is not about competition or power, its about creating a life for themselves and their family.  So their goal should be a strong and vital economy for the United States.

On the other hand, if your pre-eminent goals are personal maybe income inequality is good (if you are on the up side of inequality).  Psychological studies found some years ago that most rich people care more about relative wealth than absolute wealth.  What motivates them is to be much wealthier than everyone else, rather than to achieve any particular amount of wealth or security.  There is no magic number at which they are ready to enjoy life and family, because what motivates them is the competition to garner personal wealth and the power to goes with wealth.   They don't really care what is good for the country, if it gets in the way of their personal ambitions.

It is sort of like they just want to be a big fish, and if the pond has to shrink for them to be a big fish, so be it. So, unfortunately for the rest of us, our pond has been shrinking because the folks who like income inequality have dominated the public discourse the last few years.