Will Capitalism's Biggest Backers Hurt Their Own Cause?

Thomas Edsall looks at the threat income inequality and lack of career opportunity poses to market capitalism (h/t Mark Thoma):

Katz told The Times that

the current trajectory of technological change and globalization leads to a polarization of labor demand in rich countries increasing demand for high-end, college plus jobs using analytical skills and creativity, hollowing out traditional middle skill jobs (bottom half of college, top half of non-college) like middle management, clerical, and manufacturing production, and expanding demand for in-person services.

The United States could moderate these trends and achieve some broadly shared prosperity with increased job training, granting workers more leverage in wage bargaining, infrastructure spending, progressive taxation and an expansion of the Earned Income Tax Credit for the working poor, according to Katz. “There are international examples of moving in the direction of Scandinavia,” he notes, adding that he is hopeful “about the potential for a vibrant market economy with a strong role for government generating shared prosperity. But not for unfettered 19th century capitalism.”
Sachs, in turn, wrote The Times that in his view, “a social democracy — capitalism plus a hefty dose of state support for families, education, early childhood development, higher education, and active labor market policies — can still do the job. The performance of northern Europe, around 120 million people including Germany, Austria, the Netherlands, Denmark, Sweden and Norway, provides a good illustration of this success.” Social Democracy and Europeans’ aggressive use of government to lessen class disparities is just what Romney and most other Republicans are campaigning against.

In the end, if Republicans and their free market backers can't come up with a way to decrease inequality and provide people with a living wage, they're going to see trends they really don't like.  They need to quit pretending we're on a sustainable path and start coming up with ideas other than lower taxes on wealthy folks and less regulations on corporations.  Those ideas are going to widen inequality, not help the situation.  Simple ideas may appeal to the rubes for awhile, but eventually, they're going to figure out Republicans' policies are causing most of the pain.