A big-shot venture capitalist says we need inequality. What do economists say?

"Making the world a better place." SAN FRANCISCO – There is an apartment for rent in a renovated former warehouse here, across the street from the Caltrain commuter rail station. It has two bedrooms and two bathrooms and nearly 700 square feet of space. It comes furnished. It is, the online advertisement proclaims, a "perfect place" for someone, like so many young startup employees today, who works in Silicon Valley but lives in the city. It could be yours for $8,525 a month. Rents get more bearable in farther flung parts of the city, and in bedroom communities down the Peninsula, but only slightly. A deluge of cash has soaked the engineers and executives of the Bay Area, pushing up home...