Does inequality lead to "decline and fall"?

Seeking to draw parallels between modern America and decadent Rome, Washington's Blog links to this:

A dwindling middle class, the flight of the rich to safer places (think of the recent Chinese and Russian expatriates)... it's suggestive.

The above arises indirectly from Barry Ritholtz's latest piece, in which he lists many economists and professors who also claim that widening income inequality harms the economy and generates boom-bust cycles.


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