In the wake of recent May Day protests by Occupy Wall Street and other left-wing groups around the world, we should all be reminded of the massive, nearly unprecedented wealth inequality that has gained ground in the U.S. over the last 30 years.

Most people have probably read some type of statistics or seen videos online discussing the wealth gap, displaying that the top one percent of Americans own 40 percent of all the wealth in the country, along with 50 percent of all stocks and bonds. Other common statistics include the fact that the top one percent takes home 24 percent of all income in the U.S. every year, while the vast majority of Americans have actually seen a drop in their total wealth.

But these statistics are just numbers. They show how so many of us have so little while others are living lives of excess, but we need to understand the real world consequences of inequality to understand why these numbers are so alarming. Certainly any society that relies on capitalism will see disparities in who owns how much wealth, but as more and more money is concentrated in fewer and fewer hands, problems start to arise.

I think we can all agree that money is a huge source of power in both the U.S. and the world. By that logic, a very small number of people in the U.S. have a huge amount of power. Money allows one to control property, invest in and control businesses that provide essential services, and, possibly worst of all, influence elections and politics. Big money gives a person the power to bankroll campaigns and lobby Congress, the states and the president. Money doesn’t exactly buy votes or make laws, but it gives those who have a lot of access to powerful people.

A lot of politicians are willing to trade campaign contributions for the ability to be called on at any time. Big donors have the ability to pick up the phone and speak with elected officials whenever they would like. Average constituents are lucky if they even get a chance to meet their congressman, let alone have a serious discussion about policy.

Along with the potential to breed corruption, heavy concentrations of money also create extremely fertile ground for societal instability. Companies and individuals with vast reserves of cash become--as many of the banks in this country have been dubbed--“too big to fail.” For example, if a bank like Chase was to make some bad investments and suddenly go under, it could pull down the entire financial system with it. Chase has too much money, too many workers and investors, and too strong of ties to other major financial institutions to not cause huge repercussions in the world if it goes under. The same can be said for dozens of other massive companies and people, who have the ability to widely impact everyone around them. This exact scenario played out in the late 2000s collapse, and had it not been for a bailout funded by taxpayers, the world economy could have very well fallen apart.

What is needed in the U.S. is a more equitable, competitive society. Current industries are highly concentrated and oligopolistic. Prices, labor and markets are being controlled by a small fraction of the population. We will always live in a society with rich people and poor people, winners and losers. But when there are so few winners and so many losers, the system is signaling that something is wrong. Equal outcomes should never be a guarantee, but education, corporate personhood, monetary policy and tax laws are producing a society that has very nearly fallen apart from instability and inequality, as the 2008 financial collapse displayed.

When people are so rich that they alone can make a serious impact on an election, they either have too much money or campaign finance laws are too loose. The same goes with banks and industry—if an institution is too big to fail, it is too big to exist, plain and simple. We cannot live in a country with such a massive gap between a few rich and hundreds of millions of poor. Action must be taken to break up concentrated industries, regulate election spending and reign in inequity.

Under Presidents Reagan, Bush I, Clinton, and Bush II we tried the unregulated free market monstrosity Milton Friedman and others advocated. 2008 is evidence that this simply does not work. The U.S. needs reasonable regulations and taxes or we will endure depressions, recessions and near-collapses over, and over, and over again.

James Brennan can be reached at jmbthree@umich.edu.