Krugman: What We Thought We Knew About Income Inequality Is Wrong

KRUGMAN: Liberty, equality, efficiency. "Arthur Okun, chief economic adviser to President Lyndon Johnson, published a classic book...arguing that redistributing income from the rich to the poor takes a toll on economic growth. Okun's book set the terms for almost all the debate that followed: liberals might argue that the efficiency costs of redistribution were small, while conservatives argued that they were large, but everybody knew that doing anything to reduce inequality would have at least some negative impact on G.D.P. But it appears that what everyone knew isn't true. Taking action to reduce the extreme inequality of 21st-century America would probably increase, not reduce, economic growth." Paul Krugman in The New York Times.