And how wealthy are the top 3 billionaires in the U.S.? How about the top 1%? Or baby boomers?

Turns out Bernie Sanders claim about the concentration of wealth among the billionaires in the U.S. understates how skewed the situation is. I don’t intend to belabor the stratification issue much so am including three articles which approach the wealth issue differently. If I get a lot of feedback, I’ll post more on the issue but the results are no surprise.

Bernie Sanders: Bill Gates, Jeff Bezos, Warren Buffett have more wealth than bottom half of U.S. == TRUE

By Tom Kertscher on Thursday, July 19th, 2018 at 6:00 a.m.

U.S. Sen. Bernie Sanders, I-Vt., campaigned in Eau Claire, Wis., on July 14, 2018 for U.S. Sen. Tammy Baldwin, D-Wis., who is running for a second term in 2018. (Bill Glauber/Milwaukee Journal Sentinel)

Do three Americans really have more wealth than half the country?

It’s a claim made by the runner-up for the 2016 Democratic nomination for president, Bernie Sanders.

Campaigning on July 14, 2018 for U.S. Sen. Tammy Baldwin, D-Wis., Sanders told a crowd in Eau Claire:

“The three wealthiest people” own “more wealth than the bottom half of the American people.”

The U.S. senator, an independent from Vermont, previously made the claim on Facebook and repeated it three days after his Wisconsin appearance in a column in USA Today.

What we found is the wealth lead enjoyed by the three billionaires is even larger than what Sanders said.

Like us on Facebook. Follow us on Twitter: @PolitiFactWisc.

A study

Before we dig in, an important note about the nation’s wealth gap:

Many Americans make a good income, have some savings and investments, and own a nice home; they also have debt, for a mortgage, credit cards and other bills. The result is, even some people with relatively healthy incomes, as well as many poorer people, have a negative net worth.

To back Sanders’ claim, his campaign pointed us to a November 2017 news article in Forbes. The business magazine reported on a study published that month by the Institute for Policy Studies, which the article described as a left-leaning think tank in Washington, D.C.

The study, which advocates for reducing wealth inequality, also gained news coverage from USA Today and The Guardian. And its authors wrote opinion articles about it for Newsweek and the Los Angeles Times.   

The numbers

The study used data from Forbes’ 2017 ranking of the 400 richest Americans; and data for the rest of the country from the 2016 Federal Reserve Survey of Consumer Finances, which the study says has become widely accepted as the most comprehensive government dataset documenting household wealth. PolitiFact has also relied on this Fed survey in our wealth fact checks.

The first finding the study reported was this:

The three wealthiest people in the United States now own more wealth than the entire bottom half of the American population combined, a total of 160 million people.

Those individuals and their source of wealth are, according to the study:

1. Bill Gates, Microsoft: $89 billion

2. Jeff Bezos, Amazon: $81.5 billion

3. Warren Buffett, Berkshire Hathaway: $78 billion

That’s a total of $248.5 billion. The wealth of the bottom 160 million was $245 billion, the Institute for Policy Studies’ Josh Hoxie told us. That’s a gap of $3.5 billion.

Hoxie, a former a aide to Sanders, also pointed out that the wealth of the three billionaires has ballooned to $330 billion, according to Forbes’ latest estimate.

We don’t have an updated estimate for the bottom 160 million American, as the Fed survey is done only once every three years. But Hoxie said it’s nearly impossible that the wealth of Americans at the bottom has grown nearly as much as that of the three billionaires.

For the 160 million people at the bottom of the scale, by the way, the study used the net worth figure reported by the Fed and then subtracted automobiles and other “durable goods” such as electronics, furniture, and household appliances, from that figure.

Subtracting durable goods from net worth “offers us a more accurate depiction of household wealth as these items are not easily sellable and neither appreciate nor hold constant their value,” the study says.

Other viewpoints

More fact checks on wealth inequality
Michael Moore, in 2011: “Just 400 Americans — 400 — have more wealth than half of all Americans combined.” True.
One Wisconsin Now, in 2013: “The Walton family, which owns Wal-Mart, controls a fortune equal to the wealth of the bottom 42 percent of Americans combined.” True.
Starbucks, in 2015: “White people control almost 90 percent of the nation’s wealth.” True.

The study’s methodology is sound and its conclusion cited by Sanders is accurate, according to Abdur Chowdhury, an emeritus economics professor at Marquette University in Milwaukee, and economics professor Emmanuel Saez, director of the Center for Equitable Growth at the University of California, Berkeley.

As an aside, we’ll note that Saez also said Sanders’ claim is “somewhat meaningless.”

“The meaningful thing to say,” Saez told us, “is the bottom half of the U.S. families owns essentially no wealth on net, because debts cancel out whatever small assets they may have, on average.”

Our rating

Sanders says: “The three wealthiest people” own “more wealth than the bottom half of the American people.”

The wealth of Gates, Bezos and Buffett exceeded that of the 160 million at the bottom of the scale, according to a 2017 study. And more recent estimates indicate the wealth of the three has since grown dramatically, widening the gap even more.

We rate Sanders’ statement True.Share The FactsBernie SandersU.S. senator, I-Vt.

“The three wealthiest people” own “more wealth than the bottom half of the American people.”In a speech – Saturday, July 14, 2018

Richest 1% of Americans Close to Surpassing Wealth of Middle Class

Bloomberg · by Alexandre Tanzi · November 9, 2019

.Photographer: Balint Porneczi/BloombergPhotographer: Balint Porneczi/Bloomberg

The U.S.’s historic economic expansion has so enriched one-percenters they now hold almost as much wealth as the middle- and upper-middle classes combined.

Wealth Floats

U.S. household wealth become more concentrated among the top tenth

Source: Federal Reserve

The top 1% of American households have enjoyed huge returns in the stock market in the past decade, to the point that they now control more than half of the equity in U.S. public and private companies, according to data from the Federal Reserve. Those fat portfolios have America’s elite gobbling up an ever-bigger piece of the pie.

The very richest had assets of about $35.4 trillion in the second quarter, or just shy of the $36.9 trillion held by the tens of millions of people who make up the 50th percentile to the 90th percentile of Americans — much of the middle and upper-middle classes.

Chalk up at least part of their good fortune to interest rates, said Stephen Colavito, chief market strategist at Lakeview Capital Partners, an Atlanta-based investment firm for high-net-worth investors. People can’t get much of a return on certificates of deposits and other passive investments, so they’ve pumped money into stocks and propped up the market overall, he said.

In turn, those investments make the wealthy eligible to put money into exclusive hedge funds and private equity funds. Many such funds require $5 million of investments to qualify.

“The wealthier that the wealthy get, the more opportunity they have,” Colavito said.

It may not be long before one-percenters actually surpass the middle and upper-middle classes. Household wealth in the upper-most bracket grew by $650 billion in the second quarter of 2019, while Americans in the 50th to 90th percentiles saw a $210 billion gain.

Assets — 2Q 2019

Top 1% of household assets approach that of the 50-90% group

Source: Federal Reserve

Assets — 3Q 2006

Upper middle class households held more assets than other cohorts

Source: Federal Reserve

For now, those Americans in 90th to 99th percentiles — well-to-do, but not the super rich — still control the biggest share of wealth, with $42.6 trillion in assets.

The lone group left out of the fun: the bottom 50% of Americans. Those households have 35.7% of liabilities in the U.S. and just 6.1% of assets.

Age also plays a role in wealth. Some young people have recently taken to mocking older Americans for being out of touch, hurling the term “OK Boomer” around social media. However, Baby Boomers born between the end of the Second World War and 1964 may have the last laugh. They had wealth that was 11 times higher than that of millennials as of the second quarter.

Aged and Wealthy

American’s 55 and older hold 3 times the wealth of latter generations

Source: Federal Reserve

Note: Silent and Earlier=born before 1946, Baby Boomer=born 1946-1964, Gen X=born 1965-1980, and Millennial=born 1981-1996

Bloomberg · by Alexandre Tanzi · November 9, 2019

The 5 richest men in the US have a staggering combined wealth of $435.4 billion. That’s more than 2% of America’s GDP.

Katie Warren Oct 2, 2019, 10:27 AM

Jeff Bezos, Bill Gates, and Warren Buffett are the three richest people in the US. 

The five richest men in the US are worth a mind-boggling combined $435.4 billion, according to the Forbes 400 ranking of 2019’s richest Americans. And all but one of them made their fortunes in the tech industry.

Amazon CEO Jeff Bezos tops the list with a net worth of $114 billion, followed by Microsoft co-founder Bill Gates ($106 billion), investor and Berkshire Hathaway chairman Warren Buffett ($80.8 billion), Facebook CEO Mark Zuckerberg ($69.6 billion), and Oracle co-founder Larry Ellison ($65 billion), according to the Forbes ranking.

Their combined fortune comes out to more than 2% of the US GDP, which was $21.34 trillion in the second quarter of 2019. (Exactly 2% of $21.34 trillion would be $426.8 billion.) 

A Business Insider analysis found that for a billionaire, buying a vacation to Bali is the equivalent of a typical American buying a candy bar. And that’s based on a net worth of just $2 billion, the median fortune of a Forbes list billionaire

While these five men are the richest in the US, one European billionaire knocks Ellison off the list of five richest men in the world. Bernard Arnault, the French businessman who controls LVMH, is worth $91.9 billion, making him the third-richest person in the world after Bezos and Gates, according to Bloomberg’s Billionaires Index. Forbes estimates his net worth at a slightly lower $91.4 billion, still well above Zuckerberg and Ellison.

The US is the world’s dominant country for billionaires, home to an estimated 705 billionaires, as Business Insider’s Hillary Hoffower previously reported. New York City, San Francisco, and Los Angeles have the highest concentration of billionaires in the country.

China comes in second place, with 285 billionaires, but it may be catching up to the US. According to a recent PBS report, China is producing billionaires at a faster rate than any other country.

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