The paradox of 21st century prosperity

I've had a post brewing for weeks that I'm still playing with. It's not quite right, and may never be, but this Reich comment is pertinent ...

Robert Reich's Blog: Obama, China, and Wishful Thinking About American Jobs

... The dirty little secret on both sides of the Pacific is that both America and China are capable of producing far more than their own consumers are capable of buying. In the U.S., the root of the problem is a growing share of total income going to the richest Americans, leaving the middle class with relatively less purchasing power unless they go deep into debt. Inequality is also widening in China, but the problem there is a declining share of the fruits of economic growth going to average Chinese and an increasing share going to capital investment...

I'd love to see either DeLong or Krugman dig into this claim.

See also

• Gordon's Notes 2008 (another Reich article): Tipping points and GD 2.0: speculations and lessons
• Gordon's Notes 2005: David Brin on hierarchical societies
• Gordon's Notes 2005: Neo-feudalism
• Gordon's Notes 2004: Jared Bernstein & Brad DeLong on "Outsourcing": a dialog with interesting commentary
• NY Times 2009: Rich turn to concierge services to find value (and avoid fraud)