The problem with America incarcerating a larger percentage of its population than any nation in the history of the world can be directly attributed to the privatization of prisons, and the capitalist incentives they impose.
The problem with inequality is that the 20th century middle class was specifically what made America great, by providing a consumer base to buy all the wonderful things people wanted to make. You can only sell so many jeans to the richest one percent.
"even though we sit in the greatest luxury in history"
We also sit in the greatest state incarceration of individuals in the history of the world, thanks largely to the privatization of prisons (ie, Capitalist incentives turned onto a societal function where they don't belong)