Hi Paul,
Unfortunately the wealth gap can keep growing if seen on a global scale. The empires have always used colonies to subsidize internal standards of living and it is only when the empires decline that the internal gaps in wealth become troubling. In 1965 America GIs could live off base in Germany and drive a Porsche if they wished. By the 1980s they could only afford to live on base and shop at the PX as Europeans caught up to the American Empire. American tourists used to dominate the world market. Having just returned from Europe it is striking that I met not one American but lots of Asians. In Canada American visitors are no longer a priority because they spend a fraction- about 1/3 of what Asian visitors spend. Americans are better off than in 1950 but their relative position in the world has changed and that puts the focus on internal gaps. Psychologically this is a well established phenomenon: a relatively lower wage hurts far more than a nominally lower wage as long as you make more than the next guy.
The empire has the costs of maintaining the structure for an elite who are unwilling to pay for it.
The myths of "free enterprise" - there has never been such a condition- perpetuate a Utopian dream of easy money for everyone. Globalization has undermined the nation state to a point where the laws are written by corporations who have no national loyalty. They are the new empires and the citizens of countries are patsies to these corporate behemoths- most agricultural subsidies go to large corporations (read ethanol), most science subsidies go to large corporations, even private prisons are subsidized (a good private prison is where the "customers" keep coming back.
Most egregiously, the military are run for the benefit of corporations -read Haliburton- with $200 hammers and a propaganda machine that keeps people in terror while more people are committing suicide each year for various reasons despite almost no visible terrorist threat.
We no longer talk of citizens, but rather taxpayers and our focus is on spending ( making a living) rather than making a life worth living. Our language has been co-opted by the true believers (Hoffer) in money and the message is broadcast through advertising which is the air we breathe well beyond anything Orwell presented in 1984, Stalin was able to achieve through brutality and murder by the millions, or Goebbels with the Nazis. Obesity, drug addiction, fanatic sports aimless "malling" are all symptoms of this social malaise. Remember 'the lonely crowd'.?
The correction is happening. We will eventually need to find a way to help people live lives, build communities and societies rather than give them "freedom' to flail about in a world governed by forces they can't even imagine let alone control.
This isn't an American, but rather a western challenge. With 25% educated youth unemployed in most of the West there is great potential for social unrest like in the 30s. The 'Freeters' in Japan are a cautionary tale.
