This seems to have been caused by democracy and lack of adequate checks on it. Our political system has gotten too good at pitting people against themselves.
For example, housing. It costs too much and people can't afford it. There are multiple policies we could adopt to address it.
One is to make housing prices go even higher. It's not such a problem to pay $500K for a house that should cost $200K if it can be sold for $1M by the time you retire. People like the idea of this because it allows them to make money "for free", especially the people who have already overpaid for a house. So it remains a popular policy even though it's blatantly an unsustainable ponzi scheme.
Another is to have the government subsidize housing or otherwise adopt policies like rent control or designated affordable housing. But the common factor in all of these policies is to have the effect of raising overall rents, and on top of that the ones that cost money then have to be paid for from taxes that could otherwise have gone to something actually useful.
So then the middle class gets presented with a false dichotomy which is really squeezing them from both sides. Then the ones who think they're going to be rich choose policies that purposely increase housing prices so they can make money even though they're just inflating a bubble that may pop before they can get out. The others support policies they think will make housing more affordable, not realizing that they won't qualify for the programs so they're really the ones paying the higher rents and taxes to support them.
Then the half of the middle class that votes with the rich allows them to get their policies, and the other half that votes with the indigent allows them to get their policies as well, even though both policies hurt the middle class.
The traditional solution to this was to place limits on government power so that they're not even allowed to enact the policies that bring about this kind of myopic kleptocracy, but that seems to have fallen out of favor, presumably because enacting it requires being in power and if you're already in power then it's more profitable not to limit your own power as a kleptocrat. Or even more problematically, to expand it every time you have enough of a majority to do something like passing the Seventeenth Amendment, threatening to pack the Supreme Court if they won't uphold your unreasonably broad interpretation of the Interstate Commerce Clause, or removing state-level restrictions on what kind of zoning/housing laws individual cities can pass.