The other potential lesson of the Clinton record, which I've argued may also be observable in the response of the economy to the housing crisis, may be that the presence of a robust middle class in fact strongly related to the health of the economy as a whole. Note, again, that the wealthy actually did better under Clinton than they did under Reagan/Bush, even though Reagan/Bush were trying to stack the deck in favor of the wealthy. The explanation I find intuitively appealing is that there is some sort of optimum supply:demand balance in the economy, and that when too large a fraction of income accrues to the wealthy, this balance becomes out of whack because their are too many suppliers (beyond a certain level of income, the wealthy start to invest/supply their excess income rather than consume it) and not enough consumers. Almost all of the countries that are comparably wealthy to the United States have flatter income distributions, the only exceptions being Hong Kong and Singapore.
