Why inequality matters

I have a feature in the new issue of Canadian Business magazine about rising inequality and why it matters. Excerpt:

Barack Obama might have swept to power two years ago on a banner of “Yes we can” social solidarity, but his biggest opponents right now, in the Tea Party movement, are more concerned about the effects of his policies on middle-class tax rates. In fact, almost the only ones in America who are leading the charge to soak the rich these days are the rich themselves: Warren Buffett, for example, has been arguing for ages that “people at the high end, people like myself should be paying a lot more taxes.”

This seems paradoxical, but it isn’t. In his 2006 book, The Moral Consequences of Economic Growth, the Harvard economist Benjamin Friedman argued that economic growth is crucial to the social and political well-being of a nation. In the absence of growth, people look for answers in intolerance and fear — which is exactly, and not coincidentally, what the Tea Party leaders are selling.