NYTimes: Income Inequality: Too Big to Ignore

If people have more money, it seems neither they nor their neighbors are any happier for it. TE

ECONOMIC VIEW: Income Inequality: Too Big to Ignore

Economics was founded by moral philosophers, and links between the two disciplines remain strong. So why won't economists make judgments on the gap between rich and poor?

http://nyti.ms/9Cg2SD

"...income growth has been concentrated at the top of the scale. The share of total income going to the top 1 percent of earners, which stood at 8.9 percent in 1976, rose to 23.5 percent by 2007
"...Recent research on psychological well-being has taught us that beyond a certain point, across-the-board spending increases often do little more than raise the bar for what is considered enough. A C.E.O. may think he needs a 30,000-square-foot mansion, for example, just because each of his peers has one.
"...I found that the counties where income inequality grew fastest also showed the biggest increases in symptoms of financial distress.
"For example, even after controlling for other factors, these counties had the largest increases in bankruptcy filings.
Divorce rates are another reliable indicator of financial distress... counties with the biggest increases in inequality also reported the largest increases in divorce rates.
"Another footprint of financial distress is long commute times, because families who are short on cash often try to make ends meet by moving to where housing is cheaper — in many cases, farther from work. The counties where long commute times had grown the most were again those with the largest increases in inequality.
"(Robert H. Frank is an economics professor at the Johnson Graduate School of Management at Cornell University)"