Income inequality: an intelligent look from the left

Here is a relatively balanced article on the growing income inequality. The author is left-leaning (you will agree with me , if you look into his recommendations), but he provides a fair analysis. If you want an intelligent look from the left rather than the usual "beat the rich/tax the corporate jets" stuff, then I recommend reading it.

I quote only one paragraph (that should make an intelligent liberal to think):
"The market system distributes rewards increasingly inequitably. On one side, the debate is framed in zero-sum terms, and the disappointing lack of income growth for middle-class workers is blamed on the success of the wealthy. Those with this view should consider whether it would be better if the United States had more, or fewer, entrepreneurs like those who founded Apple, Google, Microsoft and Facebook. Each did contribute significantly to rising inequality. It is easy to resent the level and extent of the increase in CEO salaries, but firms that have a single owner, such as private equity firms, pay successful chief executives more than public companies do. And for all their problems, American global companies have done very well compared with those headquartered in more egalitarian societies over the past two decades. Where great fortunes are earned by providing great products or services that benefit large numbers of people, they should not be denigrated."

At least two points that the authors omits:
1. There is no discussion of how the economic growth, prompted by reducing taxes on the highest earners could reduce the income inequality.
2. More importantly, he frames discussion as if "the rich" are only the 1% of the higher earners, whereas for the tax purposes they still remain all those who earn more than $250,000 a year, i.e. small business.

He does however stress the that the reason for the growing inequality might be precisely too much government interference into the free market:
"First, government must not facilitate increases in inequality by rewarding the wealthy with special concessions. Where governments dispose of assets or allocate licenses, preference should be on the use of auctions to which all have access. Where government provides implicit or explicit insurance, premiums should be based on the market rather than in consultation with the affected industry. Government’s general posture should be standing up for capitalism rather than for well-connected capitalists."