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Tyler Cowen

Fight Poverty, Not Income Inequality

The difference in wealth between the rich and the poor has been shrinking, but that's not necessarily good news.

The gap is shrinking.

The gap is shrinking.

Photographer: Qilai Shen/Bloomberg

Wealth and income inequality have recently gone down in the US and other parts of the West, and the decline has been going on for the better part of the last decade. Yet it is not clear, to me at least, whether this is something to celebrate.

The recent decrease should come as no surprise. Markets are well below their late 2021 levels, and the wealthy hold a disproportionate share of the stock market. Executive compensation also tends to move with the markets, which affect the wealth of founders such as Mark Zuckerberg, who according to one measure has lost about three-quarters of his net wealth at its peak. And then there are all those former crypto billionaires, and not just Sam Bankman-Fried.