That $386,000 figure is an error.  Perhaps it came from here:

http://www.nytimes.com/interactive/2011/10/30/nyregion/where-the-one-percent-fit-in-the-hierarchy-of-income.html

This is the cutoff for the top 10%.  The top 1% make over $2 million per year.

There is no denying that the tax rate on the top 1% or 10%, whichever number you want, has fallen dramatically since 2000. I don't disagree with the major points you make but having no social security tax over 100K, 15% long term capital gains rates and the changes in the tax rates over 100K which was 39.6% in 2000 and is now 28%, 33% or 35% depending on income is extremely generous in a time it is borrowed money.

This article is misleading on several basic points.  First, based on the recent non-partisan analysis of the Congressional Budget Office, the main reason for the growth in inequality is that the top 1% has dramatically pulled away from others. The CBO analysis clearly shows (see, e.g., "summary figure 2") that the shares of income going to the bottom four income quintiles have fallen since 1979, whle the share on income going to the 81st through 99th percentile have stayed the same.  The only share that has risen is that of the top 1%.

Second, within the top 1%, the main driver has been the rising incomes of the top 0.1%.  For example, the Center on Budegt and Policy Priorities (http://www.cbpp.org/cms/index.cfm?fa=view&id=3309) estimates that the real average income gains of the top 0.1% during the last economic expansion (2002 to 2007) was 123%.  It was 4% for the lower 90% of the distribution and 62% for the top 1% (which is skewed due to the top 0.1%).  The top 0.1% is primarily the super rich hedge fund managers and CEOs of large corporations, not "entreprenuers."

Third, the claim that educational differences account for the growing inequality is simply wrong.  The so-called college premium (difference in earnings between those with only a college degree and those with only a HS degree) grew in the 1980s, but has been relatively flat since the early 1990s.  So while educational differences can partly explain why some people have a higher LEVEL of income than others, it cannot explain why inequality has GROWN so much.

This information is readily available and I find it hard to believe that the author did not know these basic points.  When will professors from the University of Chicago stop defending gross inequality at all costs and creating a casino economy and use their knowledge for the common good?

Many of the truly rich are heirs of ... or entrepreneurs. Those who are poor should question themselves why they are poor. Better schools? Come on, the internet offers all you need to study whatever you can think of. The problem is not the rich nor the tax system, the problem is the lack of dynamism of a great part of the population that prefers to spend its time before TV. You get what you work for and there are opportunities enough in the US. More than 5 billion people elsewhere on the planet can dream of.

One would expect there to be jobs a plenty in the higher skilled sectors according to this account, but that isn't the case. One of the challenges that developed countries face is that their economies are not geared for job creation, partly because the financial sector, at least in the UK, has asset stripped productive industries and pocketed the gains.

There is a great problem with this article.

It still views the whole world as machine for producing goods, generating profits and continuing infinite growth and consumption.

I do not see the human beings in the picture.

The writer's idea of education is giving skills to people, so the "robots" can do their jobs better, help production and consumption more, increasing competitivenes, bla bla bla...

Same old mantra.

It seems we are unable to disconnect from the idea that we were born into this world to consume and generate profit.

According to this attitude this is the whole life about, how skilfull I am producing goods, how much money I have to purchase them to keep up with the high earners.

There is a very deeply troubling theme there and unfortunately it is imprinted in all of us. We are slaves, we are programmed to be good producers and even better consumers.

But life is not about this at all.

And what the global crisis is doing to us it is liberating us up from this slavery.

This crisis is actually a birth, we are going to be reborn freely, and we will be able to breath again, and start dealing with what is important for a human being: human connections.

The education system will change to grow human beings who are capable of connecting to others in the interconnected interdependent world.

We will produce enough to have a normal, healthy modern life and in the rest of the time we will take others into consideration and build a single, united humanity.

Does it sound as a utopia?

I do not think so, we are already receiving the helping hand from the crisis, that is not going to stop, because this exploitative, profit chasing machienery is self destructing, it is not sustainable in this closed, finite network we have become.

So we need to start preparing for our new life in the mutual, interconnected, truly human world.

People for University of Chicago just don't get it or are not very smart.

Nobody said anything about all the 1% being crooks or undeserving.

All that we are saying is that they should pay more taxes and that they should not have so much influence in government.

Since when did taxes become "punitive" in America?  Simply, the government requires revenues in order to operate in a reasonably balanced way.  By the same token, the national economy requires a reasonable balance of incomes so that people can pay their ordinary bills and take responsibility for themselves.  In order to have prosperity, people must prosper.

To be sure, education and skills do play a part but to ignore the policies and structures in place which provided for astronomical growth in the top 1%'s income and net worth at the expense of everyone else, and in the face of inflation is foolish. Additionally, while some entrepreneurs do become wealthy, they do not achieve that without significant contributions from their workers, and from the benefits and infrastructure of our capitalist society. How many of those entrepreneurs paid their workers a living wage adjuzted for inflation year after year? And health benefits? Pensions? No man or woman gets wealthy all by themselves with no support, contribution, or benefit from others.

Even OWS doesn't say that all people in the 1% are 'bad'; witness the shock and grief felt there when Steve Jobs died.  This is mainly directed at Wall St.  I think it's just that people feel that thetop  1% (or 2%) aren't paying their share:  tax rates are the lowest ever.  

Sure, education is lacking, but as Krugman and others have shown, even wages for college educated have stagnated in the last 10 years or so.  

It's the Plutocracy, including company boards, who are themselves current or previous executives, giving theiri executives excessive salaries; working people who have to pay higher tax rates than those living off of 'unearned' income.  

You're prescription won't fix anything for generations.  

“We are the 90%,” sounds less dramatic than “we are the 99%.”

But is still a very large majority, I think you'll agree?

And has it not occurred to you that those between the 50th and 90th percentile have fallen behind economically, despite having almost the same level of education as the top 10 percent? The distribution of educational gains over the last twenty-five years—who finishes college or gains advanced degrees—has been much broader than the distribution of economic gains. This rather defeats the explanation through education.

While I normally agree with Rajan's views, I have to say that this particle article has side-stepped some key factors which are causes of the mess we find ourselves in. Let me begin by asking a question - what do you think is the most preferred Job that a bright graduate today longs for? Answer is - Investment Banking - and why, because every kid today wants to have millions in bank account at 40 and then retire wealthy. It does not matter - how many actually end up being so, but it is important to understand how and why is it so. There was a time when bright kids dreamed of becoming Einsteins or Edisons, but no more. The first preference today is not even to become Steve Jobs or Bill Gates. And it is not without reason. Over the years, through invisible nexus between financiers and the policy makers, we have created a global financial system which has inherent structural advantages as a profession than other industries. And it is too intricate to examine than just to look at few problems. We as a society have started valuing (by value we mean wealth and hence the social status) wealth-managers (the wall street and likes) more than the wealth-generators (entreprenuers, scientists, inventors, diligent workers, etc.). Take the case of Rajat Gupta - if one goes by the information available in media, at one point of time he started feeling that after all his professional accomplishments he finds himself just in a millionaire's club (likes of CEOs, Consulting Giant partners, Founders, etc.) and not in billionaire's club (hedge fund managers, I-Bankers, PE firm owners, market movers, etc.). Most of the top CEOs if were asked now, how would they have redesigned their career graph from childhood, it will not be surprising if many agree that we may have been better off focusing our energy towards investment banking. Look, lets face it. It is not about feeling jealous or training all guns on the wealthiest. No one doubts that yes people who join wall street may be are the bright ones, but the main question is why are the majority of them wanting to join wall street. Take two same high talent kids and make one join in automobile industry and other in investment banking, and then see who is more richer. Isn't it an anomaly. We will never be able to fix our problems till we finally fix this problem. But what happens, whenever there is a financial crisis, the committees that are constituted to fix the crisis, consists mainly of people who have made reputation playing in the system. In all fairness, let us not be naive to think that they can do an impartial job. The message coming from protests like Occupy Wall street is not just about hatred for all rich people, it is much more fundamental - how our society is getting impacted by such serious unfair policy designs which is favoring one industry wildly above other. And of course, the greedy behavior of some these bankers who in their short-sighted pursuit of more and more money, screwed up the whole economy. What justification can we provide to a hard working person who is near his retirement, and so unable to quickly reskill herself, loses her job because othe bad economy - which was caused by this reckless bankers, and the incompetent (and maybe complicit) governments and regulatory bodies. I would love to see Mr. Rajan's thoughts on how should the new self-correcting global financial system be designed - with its proper checks and balances, and clear responsbilities of the government, regulatory bodies, supra-national institutions (like IMF, etc) and the Banks. May be an economist can do a much more impartial job :)