This is the Cato Daily Podcast for Monday, November 11th, 2019.

I'm Caleb Brown.

Wealth inequality is a hot topic for Democrats running for president with some candidates claiming that

wealth inequality harms not just social cohesion but the republic itself.

Chris Edwards and Ryan Bourne are authors of the new Cato paper exploring

wealth inequality. It's available now at

Cato.org. Well I think politically what's going on is that you know the economy

is in the 11th year of economic expansion, unemployment is really low and you know the economy is continues to be fairly strong with lots of job opportunities.

So I think Democrats, they've been trying to make a big issue of income and wealth inequality for want of a better

way to attack the current administration on economic policy.

So our new study looks at wealth inequality, which we found is quite a different thing than income and equality. They're both measured in different ways and they mean different things.

And I think with wealth inequality, our overarching conclusion is that

wealth inequality may have risen somewhat in United States in recent decades,

but it's actually a meaningless metric from the perspective

of public policy.

Wealth and equality, the thing that matters is not the level of it, it is the cause. Wealth and equality can be caused by cronyism,

you know insiders and businesses getting special deals from the government. It can be caused by capitalism in the best of ways

and by free market dynamism and entrepreneurs like Jeff Bizos getting wealthy

because they're bringing innovations that benefit all of us.

Or it can be caused by what we call crowding out or displacement.

As the welfare state gets bigger it displaces private wealth

building by the middle class which causes inequality. So the important thing

...