The Upside of Inequality: How Good Intentions Undermine the Middle Class

While growing income inequality is a real phenomenon, a misdiagnosis of its causes and consequences leads to policies that slow growth and ultimately weaken America. Ignoring the true sources of rising inequality — namely trade, trade deficits, and immigration in an economy constrained by properly trained talent and its capacity to take entrepreneurial risk — and blaming high-wage earners creates a dangerous feedback loop. Raising taxes on their success reduces risk-taking and innovation, which in turn slows growth, reduces middle-class wages, and increases the demand for redistribution — a recipe...