One interesting thing that happened in 1971 (right when the income divergence occurred, which I view as the major problem) was that Nixon closed the gold window

One interesting thing that happened in 1971 (right when the income divergence occurred, which I view as the major problem) was that Nixon closed the gold window: http://en.wikipedia.org/wiki/Nixon_Shock http://en.wikipedia.org/wiki/Nixon_Shock Association of course does not prove causation, as a graph of murders and IE usage will demonstrate. But it is suggestive. I wonder if the unlimited leverage that the financial system had access to after the gold window closed allowed them to suck out more and more of the productivity gains. This graph suggests that this might be so: http://www.yesmagazine.org/blogs/david-korten/images/financial-sector-as-percent-of-u.s.-gdp http://www.yesmagazine.org/blogs/david-korten/images/financi...