Recessions and income inequality

Since 1980. The chart was taken from:

The Mystery Of Income Inequality Broken Down To One Simple Chart

Note the final peaks clearly indicating extreme volatility in capital gains.  Debt is the accelerator here, debt had grown to nearly unsustainable.

In an unstable economy, the wealthy do better, they have first access to the cventral bank easing funds.

Some will say the Reagan tax cuts are the problem. The more likely cause is central banking which has received much of the suspicion.    Why would inequality jump and crash for each recession?  Wealthy are, on the margin, the ones who make sure the interest charges are paid.  The formal debt cartel made up of the large banks came into exstence:

The relationship between the Fed and the primary dealers is governed by the Primary Dealers Act of 1988 

We went to a value added chain approach to debt sales as the flow was larger than the market.  The primary dealer value chain is managed by wealth.   Basic the cause, "debt is what we owe ourselves", the 'This time is different' fraud promulgated by Paul Krugman.  The folks at MIT caused this in a fraudulent reaction to the Nixon Shock.

The answer is to keep debt levels low, a result of the 'This time is different' book which describes the 'This time is different' fraud. And the book was fraudulently attacked by the fraudsters, but it stans the test of time.  We suffer 'This time is different' syndrome, it occurs on all central banking systems.

The effect of bad central banking shows up prior to Reagan, it shows up in the 1970s when no one had a clue about banking.  The Reagan tax cuts had less to do with the problem then the Reagan overspending.  Wealthy people make their money off the state, mostly when the state goes off balance.

Gold does not help, getting government involved in the commodity industry to keep a check on debt is about as stupid as they come, it fouls the commodity business as any libertarian knows. The trick is make the CB understand and keep independent of Treasury, a violation of the constitution, unfortunately. There may not be a real solution, certainly the Keynesians are as nutty as any one else here.