More On Inequality & Bubbles
Which it certainly isn't, I have repeatedly (for example here and here) pointed to asset price inflation caused by monetary inflation as the primary cause of the increase in inequality.
Fox however offers no explanation for these bubbles, except he simply says that they were based on "some real economic reason, then got out of hand". That makes little sense, because first of all, to the extent an increase in asset values is based on improving fundamentals, it is not a bubble. And regarding the more relevant point of the effect on inequality, there is no reason per se that for example the improved productivity during the 1920s (or to a lesser extent, the late 1990s) would disproportionately boost corporate profits relative to labor income.
What instead happened is that there were gains in productivity that caused consumer prices to decline, something which caused the inflation targeting Fed to increase money supply, which in turn boosted corporate profits and also increased valuation levels (because of lower interest rates). In other words, it is monetary policy that causes the increase in inequality.