Since World War II, our economy has evolved in ways that reinforce the
financial differences between strong families and weak families.

There are more good sentences here.  You’ll find some bad sentences here, which summarizes the economic plans of the Democrats to address inequality.

One of my favorite Friedman papers is "The Effects of Full-Employment Policy on Economic Stability: A Formal Analysis" which you can find in Essays in Positive Economics.

Friedman sets up a very simple model, Z(t)=X(t)+Y(t) where Z(t) is income at time t, X(t) is what income would be if there were no counter-cyclical government policy and Y(t) is the amount added to or subtracted from X(t) by the history of government policy.

You wouldn’t think that much could come out of such a simple model but Friedman takes the model, notes that the formula for the variance of two random variables is V(Z)=V(X)+V(Y)+2 r(X,Y) Sd(X) Sd(Y) (where V is variance, r correlation and Sd is standard deviation) and proceeds to show that:

In order to cut the variance of income fluctuations in half (which would cut the standard deviation by less than a third), r(x,y) must exceed .7.

The result is powerful because once you start thinking about the correlation coefficient, r, it’s hard to see how it could be as high as .7.  Very few government actions taken in time t have an effect in time t – there are lags between recognizing a problem, deciding what to do about the problem and implementing a policy.  Once the policy is implemented there are lags before the policy takes effect.  All of these lags are of uncertain and changing length so actions taken in t-5, t-4, t-3, and t-1, may influence Y(t) making a high correlation between X and Y unlikely.  Moreover, Friedman’s bound is an upper bound, requiring optimally sized interventions – when we recognize that the size of the intervention might be too little or too much and that in both cases this will reduce the decrease in variance we have a strong case for skepticism about the efficacy of counter-cyclical policy.

But was Friedman right?  In the thirty or so years after he wrote, when counter-cyclical policy was in vogue, the variance of the US economy was much lower than in the pre-World War I years.  Reality it appeared, refuted Milton Friedman.

Friedman, however, lived to see his simple model proved correct (Essays in Positive Economics!).  In a series of papers beginning in 1986, Christina Romer showed that the pre-WWI volatility was an artifact of the way the data was collected.  Once the pre-WWI and post-WWII data were collected consistently, using the same methods, the post-WWII economy showed no big drop in volatility.

Almost nothing in, a surprising and powerful result out, and an implicit prediction proven correct after thirty years.  That’s the Friedman magic. 

Jeff Sachs gives a one-page argument for "yes." 

I lean toward a more disaggregated approach, in which the success of aid is not just a matter of political will.  The question is when and where aid will work.  From another direction, this is an insightful paper:

Incumbent political leaders risk being deposed by challengers within existing political rules and by revolutionary threats.  I examine how the survival incentives created by these dual threats shape the e¤ects of aid on government policy.  I use Bueno de Mesquita et al’s (2003) selectorate politics theory to examine the relationship between winning coalition size — the number of supporters a leader requires to retain office — and policy choice.  In large winning coalition systems, the public goods focus of public policy means that foreign aid improves societal welfare and economic development.  In contrast, in small coalition systems the private rewards focus of policy induces a loyalty norm towards incumbents which enables leaders to skim off aid resources for themselves and their cronies.  Further since in small coalition systems aid generates few of the societal benefits that it would under large coalition institutions, aid increases the desire of citizens to rebel.  Leaders can respond to such revolutionary threats by either buying off potential rebels by increasing the supply of public goods or retarding their ability to organize by suppressing public goods.  Aid increases the relative attractiveness of the latter option because aid provides governments with "unearned" revenues that are relatively isolated from the economic decline induced by the suppression of public goods.  The model also implies that aid can retard democratization.

I read that and I thought "today I learned something."  Both pointers are from www.politicaltheory.info.

Addendum: Here is more Sachs, via Mankiw.