It's the income inequality, stupid

I'm not an economics wonk but this seems so obvious that you have to wonder why the geniuses who set policy don't get it, or at least don't take some action, any action at all, to counteract it. I mean really. It's so clearly about income inequality.

The gap between the wealthiest Americans and middle- and working-class Americans has more than tripled in the past three decades, according to a June 25 report by the Center on Budget and Policy Priorities.

Robert Reich puts it in more context. After decades of narrowing the income gap, the policy swung in favor of the wealthy again and we have this:

By 2007 the richest 1 percent were back to where they were in 1928—with 23.5 percent of the total.

Each of America's two biggest economic crashes occurred in the year immediately following these twin peaks—in 1929 and 2008. This is no mere coincidence. When most of the gains from economic growth go to a small sliver of Americans at the top, the rest don't have enough purchasing power to buy what the economy is capable of producing.

Again, so obvious, so why isn't it being addressed in some practical manner?

Meanwhile, via John Cole and interesting piece by James K. Galbraith that does a step by step analysis of how the 2008 meltdown happened that is simple enough for a tea party conservative to understand. Not that you'll ever get them to accept the facts. Their capacity for denial appears to have no limit.