LEVERAGE. Wealth inequality increases this little thing called leverage.

As fewer and fewer people control more and more of the economy, they can leverage the economy is ways to benefit themselves and also to control or destroy it.

The first time in recent history that we saw this leverage was in the late 1980's after Ronald Reagan slashed taxes on the wealthiest people from 71 percent to 28 percent. The rich became richer.

Despite popular myth, the 80's economy was never that good. On average there was not as much growth in the 80's as there was in the 70's or 90's.

Lower growth means lower general demand. More money in the hands of the rich means the money has to go somewhere. The money went into the stock market and housing, leveraging and distorting both markets.

By 1987, the stock market had risen so fast that it was bound for a fall. The greatest stock market crash in American history occurred in 1987.

In the 1980's the real estate and housing market boomed at a faster rate than general inflation than ever before. Then, came the housing collapse, the Savings & Loan collapse, and a very long seven year period of recession, slow growth, and finally "jobless recovery."