Growing Income Inequality Was What Made the Great Recession so Great

A couple of years ago a new narrative emerged about the role that income inequality may have played in the boom/bust cycle that ended in the Great Recession. In a nutshell, it goes like this: Middle class incomes stagnated during the aughts. Income gains went mostly to the rich, who got ever richer. To sustain its accustomed lifestyle, the middle class began borrowing more. The rich eagerly provided them with loans, since there were limited opportunities to invest the huge pool of money flowing ...