Matt hits one of my favored hobby horses in the inequality debate today, arguing, completely correctly, that the "why" doesn't much matter. Whether inequality is a result of skills-biased technological change or low marginal tax rates or Wall Street or the inequality gnomes is really neither here nor there. The fix to the problem is very unlikely to have anything to do with the root cause. If inequality really were a function of higher returns to education -- and, sorry folks, but it's not -- we wouldn't respond by demanding everybody get dumber. We'd change the tax code around a bit, institute some progressive social programs, put seed money into asset programs for the poor and working class, and so forth.
Indeed, you sort of see this with the constant invocation of education. Saying this is about skills -- as if hedge fund managers have been studying since 1690 -- is a way of justifying it. Saying we need more and better education is a way of doing nothing, as that's much too grant a task to undertake as a response to inequality and, in any case, it wouldn't work. College graduates have seen their wages stagnate for the last six years. This is about distribution. And distribution can be rejiggered without digging deep into the everyday workings of the economy.
