Al is correct; the video is nonsense.
Points 1 and 2 appear to follow only when you compare median income to average GDP. Obviously, because the distribution of incomes is titled to the left, median income will be lower than average income and, by simple definition average GDP.
In point of fact, since 1980 median income has risen by approximately 33%. Over the same period, the size of the labor force has increased by about 50%, as well. Accounting for both trends absorbs the majority of the change in GDP. It is complete nonsense that the "rich" have captured all of the gains from growth over the past three decades. Frankly, you'd have to be an idiot to regard that as fact after even the most cursory critical examination. Even if it were true that inflation adjusted earnings were flat over that period, you have access to comforts and conveniences available at cheap prices that were either prohibitively expensive or flat out impossible in 1980. Think about your smart phone, your home pc, the internet, etcetera. We are all in all likelihood better off at the median than even the top 20% were in 1980.
These arguments always rest on an appeal to envy: the architect points to the fact that some people are doing very well to distract from the fact that everybody is doing pretty well, and then argues that we need to change the system to prevent those people from continuing to do very well. Inevitably, this leads to everybody doing less well, not just the intended targets of the reform. In the abstract, even if it is true that some people in the economy enjoy a majority of its fruits (even while everybody else continues to see their lives improve, or gets a piece of the fruit, however slight), why does it follow that this is a "bad thing"?
Point 3 fails on its face, as well. Since 1980, the effective tax rate on the top quintile (the top 20% of income earners) has increased from 15.7% to 17.5%, while the effective rate on the bottom 20% has fallen from 4.1% to 1.5%. In fact, the taxes on the super poor have been slashed, by about 60%. Taxes on the super rich have increased by about 13%. This is because whatever monetary advantages the rich may have, politically, is more than offset by the popular value of the bottom 51% in terms of raw votes. Politicians spend lavishly on two popular categories: the old, and the bottom 60% One group votes, and the other is big enough to carry elections.
The rest claims to follow from points 1 through 3 and are therefore irrelevant. I will simply add that, whatever its other virtues, the argument that a strong middle class is a necessary prerequisite of strong economic growth is laughable on its face. The big growth stories of the latter half of the 20th century - Japan, China, and India - did so from basically agrarian societies with no middle class to speak of. In point of fact, the only prerequisites of accepted note are strong and consistent legal institutions, the protection of property rights, and capital mobility. Since 1980, the United States has systematically attacked all 3, to its detriment. This is the real root cause of any national economic anemia; the post-WW2 histories of Germany and Britain are an excellent case study. The minutia is just technical detail.
