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Perhaps rising wealth inequality leads to a larger proportion of money being stashed away in investments trying to make more money for the wealthy, and ultimately results in pathetic investment yields which create a self-balancing situation where people who actually work for their money are actually better off..

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It seems like you just made an argument where expanding income inequality is in the end better for those in the "have not" column, because the investments of the rich aren't doing amazingly well, so there take that.

When the rich are getting measurably richer, measurably faster, that theory kind of falls on its ass.

Unless I misunderstand you?

I think it applies more to the middle class than the rich. The very rich still have easy access to lucrative investments, but the upper middle class (and perhaps the slightly to moderately rich) don't. The result is a shift in incentives away from stock trading and toward entrepreneurship.

I think this is very healthy.

Of course I'm not saying expanding income inequality is better for the have nots. I'm just saying this may lead to some self-correction of relative earnings from labour vs. capital as wealth becomes more concentrated, although overall things are still worse for the working chump.

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