Did the Federal Reserve Survey on Wealth Exclude the Top 400 Wealthiest People in America?

By Matt Stoller, a fellow at the Roosevelt Institute. You can follow him on Twitter at http://www.twitter.com/matthewstoller.

The recent Federal Reserve analysis of the effects of the Great Recession on household wealth and income was a doozy, showing that median income dropped 7.7% and median net worth fell by 38.8% from 2007-2010.  But that may not be the whole truth – the Fed might actually be leaving a very significant group of people out of the sample – the top 400 wealthiest people, or the 0.0000035%.  

Someone brought this part of the the Fed study to my attention (note to self, always read the section on methodology).

Second, a supplemental sample is selected to disproportionately include wealthy families, which hold a relatively large share of such thinly held assets as noncorporate businesses and tax-exempt bonds. Called the “list sample,” this group is drawn from a list of statistical records derived from tax returns. These records are used under strict rules governing confidentiality, the rights of potential respondents to refuse participation in the survey, and the types of information that can be made available. Persons listed by Forbes magazine as being among the wealthiest 400 people in the United States are excluded from sampling.

This passage describes how the Fed got the information on wealth and income., and I’ve bolded the relevant sentence.  The Fed can easily get data on the non-wealthy, because the non-wealthy don’t have very much.  Most people, to the extent they own anything, have some home equity, a bank account and perhaps a few mutual funds, with most wealth concentrated in housing.  So the Fed researchers can essentially look at homeownership rates and figure out how much the non-wealthy people own, and how much they’ve lost or gained.  But the wealthy are different, and here’s where it gets tricky.  The wealthy own lots of illiquid assets, everything from priceless paintings to private multi-billion dollar companies.  So the Fed does a separate survey just on the wealthy.  Only, as the researchers say, “analysis of the data confirms that the tendency to refuse participation is highly correlated with net worth.”  The rich aren’t just rich, they are secretive.  And apparently the super-rich are super-secretive.  And for some reason, these researchers just didn’t include the Forbes 400, the very richest of the rich.

You might say that the exclusion of 400 people isn’t significant; after all, it’s just 400 people.  How big a difference could that really make?  Well, it turns out, as of 2011, that the top 400 people in America own more than the entire bottom 60% of Americans.  So this is not a trivial exclusion.  The Fed claims in the report that it has a method for adjusting for rich people who don’t respond to their survey.  Why the Fed has just not included the Forbes 400 is not clear, and I’m curious how they adjust for leaving out Mr. Gates and Mr. Buffett and company.  I’ll send an email to the Fed to find out.

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About Matt Stoller

From 2011-2012, Matt was a fellow at the Roosevelt Institute. He contributed to Politico, Alternet, Salon, The Nation and Reuters, focusing on the intersection of foreclosures, the financial system, and political corruption. In 2012, he starred in “Brand X with Russell Brand” on the FX network, and was a writer and consultant for the show. He has also produced for MSNBC’s The Dylan Ratigan Show. From 2009-2010, he worked as Senior Policy Advisor for Congressman Alan Grayson. You can follow him on Twitter at @matthewstoller.


  1. PaulArt

    Knowledge is power and not knowing about the Forbes 400 is power lost. The silver lining in this cloud is how day after day the Fed is being peeled off layer by layer and revealed to be the tool of the Forbes 400 and other Fat cats.

  2. jake chase

    It has been obvious for years that the role of the Fed is to keep wealth of the ultrarich growing, when it is not actually exploding. The middle class supported this scheme so long as its own wealth was rising. This will provide a real test of corporatist propaganda.

    1. digi_owl

      Never mind the supposed American dream, that with hard work and patience one can join the ranks of said ultra-rich.

  3. John Firestone

    Adding 400 more outliers to the median of a 100+ million data points will shift it an inconsequential amount. This is one reason to use the median — rather than the average which would significantly change as you point out.

    1. Campbeln

      From TFA: “Well, it turns out, as of 2011, that the top 400 people in America own more than the entire bottom 60% of Americans.”

      “…will shift it an inconsequential amount…”

      To paraphrase the Princess Bride:

      “You keep using that word. I do not think it means what you think it means.”

      1. Campbeln


        Apologies… I missed the keyword; “median”. Proofreading is for wimps and people who want to get it right the first time!

        So you are indeed correct in terms of median; but I still disagree with the use of “inconsequential” in relation to this exclusion.

  4. rjs

    even with those 400 excluded, the average net worth from the survey was still $498,800 in 2010, which is illustrative of how a handful of very wealthy people at the top can pull up the whole national average….those in the top 10% of the wealth distribution had a median wealth of $1,864,000, and an average wealth of $3,716,000 in 2010; the top 10% also had the smallest percentage decline in both the median and the mean from 2007 to 2010, which you can see in this table taken from the report:


  5. Mike B.

    Does Forbes publish estimates of the wealth of each of the Fortune 400? If so, maybe the Fed uses that information, and so doesn’t need to include them in the survey. Since wealth is so concentrated and the wealthy tend not to respond to surveys, it would be reasonable to try to get information about the very top through other sources.

  6. Rob U.

    The difference between median and average is fundamental. The Fed is using median values here, meaning that leaving 400 people out is inconsequential. But leaving these same people out of an average would be wildly misleading.

    1. GeorgeK

      Technically since the top 400 are so stistically higher as to be outliers in the meadian, the Fed should be using a trimmed mean for their calulations.

  7. Conscience of a conservative

    Not to overly defend the rich as they would not defend me, but Bill Gates created tons of wealth, jobs and his products improved business productivity. More to the point, we talk about taxing the top 400 wealthiest americans, but the reality winds up being a number far more inclusive. There seems to be a current in America that has two goals, wealth redistribution and a very large centrally planned economy. All this talk of more gov’t spending goes hand in hand with a central gov’t that makes its presence known in a big way.

    1. LeonovaBalletRusse

      “Bill Gates created tons of wealth” – so party line as to be incredible at NC.

      1. Nathanael

        The wealth was created by… hmm, let’s see. The invention of the personal computer. The release of the IBM PC. The people who wrote CP/M. Paul Allen, who wrote DOS, the clone of CP/M which IBM bought. The people at Xerox PARC who made the graphical operating system. Steve Jobs and Steve Wozniak who were hellbent on pushing the graphical OS into the mainstream market.

        I don’t see how Bill Gates created any of that wealth. Bill Gates was a market droid who happens to know how to program. He did make sure that the wealth went to him and Paul Allen rather than to the company which made CP/M. And he lucked into Apple’s unwillingness to release MacOS for the IBM PC and used it as an opportunity to create Windows (which was brain-damagedly awful software right up through and including the very popular Windows 3.1).

        Microsoft has never done anything original except Microsoft Bob. It’s a company which makes *bad* clones of other people’s software (their products are usually worse than the ones they’re copying), and then uses marketing (and later, monopoly power) to crush the opposition. That’s what it’s *always* done.

      1. Nathanael

        Soros created a huge amount of wealth when he single-handledly funded all the cultural and academic institutions (universities, orchestras, art museums, etc) of Eastern Europe for about 5 years after the collapse of the Soviet Bloc.

        We would have lost a great deal of culture if those institutions had collapsed in an uncontrolled manner after the Communist funding vanished.

        Of course, Soros *made* his money doing completely unproductive things which didn’t generate any wealth, but his philanthrophy was actually genuinely important.

    2. Ned Ludd

      Gates was a successful businessman. But the wealth, jobs, and productivity gains from computers would have come without him. He was in no way necessary or important for the computer revolution to take place.

      Gates was well-positioned, well-financed, and smart enough to take advantage of an opportunity. But if Microsoft had never existed, then some other company – Commodore, Apple, Digital Research, Acorn, RadioShack, Seattle Computer Products – would have instead prospered, supplying operating systems and business software for PCs.

      1. Mark P.

        ‘Microsoft had never existed, then some other company … (like) Apple … would have instead prospered, supplying operating systems and business software for PCs.’

        Absolutely false in the case of Apple. If the much-worshipped Steve Jobs had had his way, we’d all still be paying $3,000-7,000 for his company’s overpriced Ferrari-type machines, and Apple would be enforcing its digital “fenced-garden” approach even more dictatorially than it now does.

        Paul Allen and Bill Gates — particularly the latter — are monstrously successful businessmen and thus don’t deserve any sycophancy from the likes of us. But if one is interested in having a true historical perspective at all, Gates and Allen said in the 1970s that it was their objective to put a computer on every tabletop and then did that in the following decades. They — principally Gates — performed the world-historical task of democratized computing, as they said they would.

        Not a small thing. And I believe Jobs would have stopped all that in its tracks, if he’d had his way.

        1. hank

          Absurd. Sorry just can’t let this stand as if someone knows what would have been. Beside the inexorable march, that is. It’s a pretty old and hot debate.

          Apple’s systems have been relatively high quality, it’s true.

          But total cost of ownership and even feature-to-feature comparison have made the costs comparable from the beginning in fact.

          And the on-the-other hand argument, is that Jobs vision ‘for the rest of us,’ is what made the systems actually ‘democratic.’ And not the MS closed shop of arcane mediocrity that would have never spread rapidly otherwise. To think that MS actions have been anything besides monopolistic is laughable. Not to mention that many of MS’s good ideas came from elsewhere (or were outright stolen).

          In any case, it would be a weak argument that Uncle Bill helped us somehow in ways no one else could do.

          1. Mark P.

            Let’s ride again through those days of yesteryear —

            [1] Full disclosure, as they say: I used to do tech journalism during the 1990s and the early 2000s. My outlook is partly colored by a little knowledge of the personalities involved.

            Gates could be deeply unpleasant and played hardball. But he could actually code back in the day and usually knew what he was talking about, though he’d persistently lie in your face if it suited him.

            Conversely, Jobs pretended to code and was a brilliant con man, and sometimes a straight-out monster who not only used people and threw them away, but also in a couple of instances — if accounts were reliable — seemed to relish permanently damaging people. Personalities aside ….

            [2] MS’s ‘arcane mediocrity’ was precisely what it took to democratize computing once past the initial Apple machines in the 1970s and early 1980s.

            Spare me the hoary old Apple advertising slogans from that era about computing‘for the rest of us.’The world needed cheap machines that worked reasonably well. The Wintel duopoly supplied those, with backward compatibility. If Jobs had had his way, we’d still be paying $3,000-7,0000 for our machines.

            [3] Since Linux, Red Hat and other options existed for those of us who wanted to install them on our PCs, I’d never claim that “Uncle Bill helped us somehow in ways no one else could do.”

            [4] I don’t know what you mean by “arcane,” though I suspect you aren’t in the business. MS may have been mediocre but there was usually nothing arcane at all about them if you were an outside developer needing their APIs. Because developers was how MS made their money and MS knew it. Hence, they would give away for free things like C++command line compilers for their .NET languages, for instance.

            [5] “Many of MS’s good ideas came from elsewhere (or were outright stolen).”

            And Jobs weren’t? Come on. I’ve done the Xerox PARC tour.

            [6] Finally, what’s laughable is to think that Jobs and Apple, as much Gates and MS, weren’t also out there trying to be monopolistic. That’s what corporations do when they can.

            Jobs and Apple lost at it back in the old days is all. IMO, a good thing, overall.

            And now back to regular programming —-

          2. Nathanael

            Mark P., if IBM had picked CP/M instead of MS-DOS, Digital Reseach would have ended up providing the software part of “a computer on every desktop”.

            It is literally true that if it hadn’t been Microsoft it would have been someone else. Namely, Digital Research.

            Now, the true breakthroughs which democratized the PC were
            (1) The IBM PC, making it “legit” for big corpoerations to buy PCs (because they were from IBM!!!)

            (2) The Phoenix BIOS, making IBM-PC clones possible, thus making the “cheap” computer compatible with the “corporate” choice of computer.

            The programmers *and* the lawyers at Phoenix deserve full credit for the “PC on every desktop”. (The lawyers because they figured out how to win the inevitable copyright lawsuits from IBM.) It would not have happened without them, or at least not for several more years.

            Bill Gates deserves no credit. He is one hell of a business crook, though.

      2. Moneta

        Let’s not recognize any successful person because had they not been there, others would have done the same successful work and we would not recognize their good deeds either because had they not been there either, someone else would have done the work…

        So why bother recognizing any success whatsoever… no matter what we do well, someone else would do it just as well if we were not there?

        But then again, maybe our lives would be much better if none of the inventors, discoverers or entrepreneurs had been born, because the others who were just as good or better could have shined.

        1. Nathanael

          Generalization is stupid. Up above, I pointed out *exactly who* would have provided the O/S for the comptuer on every desktop if Bill Gates hadn’t performed his feats of marketing magic.

          Digital Research, creators of CP/M.

    3. Lloyd C. Bankster

      Correct! As Bill Gates, Truth In Media and the Forbes 400 keep reminding us, there’s a shortage of labor that can only be solved by removing all restrictions on H1-B visas and bringing in tens of millions of foreign workers who can work for minimum wage with no benefits.

      To compete globally we must continue to bail out bankers, while eliminating all pensions, health care and unemployment compensation benefits, as well as Social Security and Medicare.

      We are the JOB CREATORS!

      Send your checks made out to Blankfein/Dimon Job Creators Fund, 200 West Street New York, NY 10282.

    4. Noni Mausa

      “Bill Gates created tons of wealth…”

      No, not at all. Rather, he presided over an organized structure which, yes, enriched our society, but which also depended upon that society for its very existence. Society paid the cost of their products, fair enough, but also paid extra. We call that extra “profits” but profits are basically extra, whatever the market will bear. For decades Microsoft worked tirelessly to fend off competition, while filling lakes of profit.

      To say that “Gates created tons of wealth, jobs and his products improved business productivity…” (which productivity, by the way, wiped out millions of other jobs) is like saying that Old MacDonald created hundreds of jobs for his chickens and cows and wealth in his wheat and alfalfa fields. The farm, the animals, the soil and the rain created these things – he just co-ordinated them.


    5. SubjectivObject

      Why are the tens of trillions of life hours wasted on MS OS instabilities never priced to Bill Gates’ valuation?

      1. Justicia

        Not to mention the millions of tons of toxic e-waste that “society” (not Bill Gates wealth creator) is left to dispose and workers exploited to, litereally, to death. If Microsoft, Apple, et al had to pay the real cost of their e-junk — in terms of resource extraction (petroleum based plastics, rare earths, precious metals) — they wouldn’t be seen as wealth creators but as wealth extactors from natrual (and human) capital.

        1. davidgmills

          A corporation is designed to privatize profits and socialize losses. That is the essence of limited liability.

          1. enouf

            Yep, and entirely Unlawful and Unconstitutional — nice Rule of Law we have tisn’t it?


        2. enouf

          right on! Now i don’t have (try) to explain it to CoC et al, since you’ve done so much more succinctly and eloquently ;-)


    6. GeorgeK

      Gates created a monopoly, every PC had to have his software. Basic economics, fresh or saltwater, tells us that monopolies are harmful to growth since they stifle innovation and keep prices artificially high.

      Gates created uncommon wealth for himself a few others, at the expense of the worldwide economy.

      By the way charitable trust are just ways to keep wealthy people from recognizing gains on their portfolios. They collect director fees and have their expenses paid by their charitable trust.

        1. Justicia

          Foundations are only required to pay out 5% of the value of the endowment each year (that includes administration and other expenses) for “charitable” purposes, while the other 95% of the endowment appreciates tax free. Family foundations are a vehicle for preserving power and prestige and avoiding taxes.

        2. Justicia

          Regarding Gates Foundation, more specifically, whatever good that 5% of the endowment may be doing, the other 95% may be undoing:

          LA Times
          Money clashes with mission
          The Gates Foundation invests heavily in sub-prime lenders and other businesses that undercut its good works.

          LA Times
          Dark cloud over good works of Gates Foundation
          But polio is not the only threat Justice faces. Almost since birth, he has had respiratory trouble. His neighbors call it “the cough.” People blame fumes and soot spewing from flames that tower 300 feet into the air over a nearby oil plant. It is owned by the Italian petroleum giant Eni, whose investors include the Bill & Melinda Gates Foundation.

        3. Synopticist

          Enoough about Bill Gates already. He’s the most succesful businessman of the age. As if he’s representative of the richest 400 Americans. He’s the outleirest staistic there is.

          Conservatives and libertarians always bring up Gates on these type of threads, because they know it’ll upset a certain subset of liberals. And so de-rail the thread.

          The vast majority of the people on that list didn’t start a business from their garage that became a global mega-brand.
          They’re extractive rentiers and financial specualtors, not productive capitalists.

          1. Mark P.

            ‘They’re extractive rentiers and financial speculators, not productive capitalists.’

            Exactly. That’s the enemy.

        4. rotter

          conservatives and thieves all think they are “smarter” than their victims because they have no moral obstacles to their ambition; conservatives, theives, sex murders, and other species of sociapath. being a bad person does not mean you are smarter.

      1. Johnny Clamboat

        “Basic economics, fresh or saltwater, tells us that monopolies are harmful to growth since they stifle innovation and keep prices artificially high.”

        Basic economics also says that monopolies cannot exist beyond the short-term in a free market. A monopoly requires State intervention to perpetuate its existence.

        1. Hugh

          So I guess the question here is are you a willing lackey of the kleptocrats or a paid one.

          Bill Gates did not create a lot of wealth. His workers did. Not him, but his company could not have sold one product if the infrastructure and the people were not there that underlay those products and created a market for them. Gates added some value to our society for which he should be rewarded, but to the tune of billions? No. But Gates also took away from the economy. Once Microsoft had a significant market share it used that share to stifle competition and innovation.

          There is this myth, or propaganda really, that all wealth the rich acquire is sacred, that is any attempt to redistribute it away from them is unholy theft. But when the rich steal the wealth of the 99% as they have for the last 35 years (by keeping wages flat for this group during this period), that is applauded as the natural way of things and wise economic policy. Again I do not know if you have been had or bought, but the bottomline is that we can have billionaires or we can have good jobs, homes, education, healthcare, and retirements, but we can not have both. That is not something that is either left or right. It’s simple math.

          1. Johnny Clamboat

            “Again I do not know if you have been had or bought, but the bottomline is that we can have billionaires or we can have good jobs, homes, education, healthcare, and retirements, but we can not have both. That is not something that is either left or right. It’s simple math.”

            It’s astounding to me that people can still flout the Fixed Pie Theory of Wealth and call it simple math.

          2. Hugh

            Nice try but your strawman doesn’t fly. No one was arguing on the basis that wealth is fixed. How does it feel to be the richman’s cabana boy? Gates had a good idea, but as others have noted, it was based on the work of many, many others. Gates principal genius was his ability to funnel the work and genius of others into his own bank account.

            Your pie reference is flawed, but I expect you knew that. Flat real wages mean that the inflow for ordinary Americans is no better than it was 35 years ago. At the same time, their costs have increased and their major asset, their homes, has decreased in value. The result is that overall they are poorer and more indebted than in the past. In the last 35 years, the wealth of the country has increased, but virtually all of that increase in wealth has gone to the already wealthy. So yes, your pie is increasing, but the portion held by ordinary Americans is decreasing. This is reflected in the real world in what we see out our window: decaying infrastructure, fewer government services, less stable and lower quality jobs, unpayable debt from mortgages or education, poor primary and secondary education, overexpensive college education, spotty and overexpensive medical care, the dwindling of private pensions.

            Again the question are you bought or simply been had? The second is not a shameful condition. Many of us were for various lengths of time. The real shame comes from staying that way.

          3. Susan the other

            In the beginning capital and labor were the same thing. One and the same. So how did capital become rich and labor poor? It was done symbolically, using a thing called money.

          4. F. Beard

            So how did capital become rich and labor poor? It was done symbolically, using a thing called money. Susan the other

            More specifically – with the theft of purchasing power via a government privileged banking cartel.

          5. Johnny Clamboat


            Can you explain how that is a strawman? Saying that society can have billionaires or good jobs, homes, etc. implies Fixed Pie Theory, does it not?

          6. enouf

            @ Hugh

            well put ..besides, he seems to prefer to nitpick over one (possibly non-conducive-to-this-argument sentence) …and instead ignores all of the many many other facts you have put forth to dispel his mythical thoughts …all the while remaining delusional. (or just a simpleton regurgitating soundbytes ala TV-style .. notice the very undetailed replies)


          7. enouf

            In the beginning capital and labor were the same thing. One and the same. So how did capital become rich and labor poor? It was done symbolically, using a thing called money. –Susan the other

            More specifically – with the theft of purchasing power via a government privileged banking cartel. –F. Beard

            Both true — however, johnny clamboat does have one resounding point about Monopolies, and that is it takes the STATE to allow/enforce/enable/subsidize them, hence we never have and never will have “Free Markets” (..so i wish all those stupid asswipe pundits and journalists and faux news types would just strike that phrase from their *cough*propaganda*cough* ..er vocabulary.) so long as Governments exist — heck, the Gov’t itself is one massive Monopoly!


        2. doug

          You don’t really believe that do you? Monopolies create huge assymetries in knowledge, wealth and power which they use to perpetuate themselves. By controlling these they prevent competition from succeeding. Even though Microsoft might not be an entirely successful monopoly they have exerted their power and wealth to either stifle their competitors or to just buy them out.

          1. enouf

            Another case in point; (to continue with these Computer analogies) is Intel v. AMD

            Intel could easily tear apart AMD (utterly outdo them to the point of AMD’s extinction), however, Intel allows AMD to be slightly competitive for one reason, and one reason only — to maintain their overwhelming market share, for if they did do in AMD, anti-trust laws would require them to disband (be broken up).


        3. Lloyd C. Bankster

          Johny Clamboat, you sound like our kind of guy!

          Come join us this weekend at Bill Gates’ $100,000 lakeside ecology mansion, as we meet with the Chinese as well as US Senators to discuss removing the Cap on on H1-b visas ENTIRELY (mainly engineering and high tech workers), outsourcing millions more American jobs to foreign lands, and helping to bring about a two-class caste system of the extremely wealthy and a lower, feudal class.

          (But don’t worry, if you work for us, your job will always be safe.)

          You can trust us, we’re the JOB CREATORS!

        4. davidgmills

          A monopoly requires state intervention … or not. If the state had enforced the monopoly laws …

          1. enouf

            The “State” is a monopoly too! (which is run by TPTB, the elites), and to preserve it/themselves they’ll use their Goon Squad Thuggery and Deception to tamp out any possible change, (and Military might if needed) ..and they’ll keep their foot on our throats forever, only allowing for small gasps of air on occassion.

        5. Ruben

          “Basic economics also says that monopolies cannot exist beyond the short-term in a free market. A monopoly requires State intervention to perpetuate its existence.”

          The State intervention was/is in the form of copyright and patent laws, that precludes rightful owners of software from freely making copies and altering the software.


          MS OSs have been OK in terms of quality (IMO) but the price paid and their market share have been inmensely overblown by State intervention.

          1. enouf

            Patent Laws do serve an important function in even a Stateless society, IMHO — however Not in their present form.!
            Especially as it pertains to Pharmaceuticals, for instance.

            All others; Copyright, Intellectual Property, Trademark are all a bunch of bullshit, ..er baloney ;-)

            Invention and Innovation should be rewarded, however once one starts allowing for Trademarks and Copyrights (Logos and Letters), and IP (just 1s and 0s, heh, just like the counterfeiting Fed) ..then Black Markets are surely going to thrive. Prohibition is the other rotten apple in this bowl.


            p.s. Sorry to have gone Off-Topic — wasn’t intentional — but i think these points are extremely important as it pertains to Freedom, and Non-Aggression Principles, … State-Monopoly-Oppression via Use-of-FORCE and intimidation/coercion/extortion

    7. Doug Terpstra

      Watch the movie Antitrust for an unauthorized, anti-establishment version of the genesis of Gates’ wealth. Beneath the glory of Borgsoft is black-box world of piracy, espionage, plantation expoitation, and murder. It’s only a movie of course, but there is something intriguingly consistent about the historic correlation of great wealth and great crime.

      As Ambrit notes, Bill and the 399 are standing on the shoulders of many — most wearing sharp cleats.

    8. F. Beard

      All this talk of more gov’t spending goes hand in hand with a central gov’t that makes its presence known in a big way. CoC

      Yes, but for ill or for good?

      Did you return the “stimulus” check GW Bush sent you? Or did you use it for what you consider “good?”

  8. yerauntieannie

    My guess about the exclusion is that it has to do with validity….that if they included the top 400, and refusal rates were next to nil, they’d be hard pressed to claim their results were valid. By excluding them, it just becomes a design feature of the survey, one that can be argued with, but they can still publish and make some claims to validity for the rest of the survey….would be interesting to see their non-response control, and have a survey researcher comment….

  9. LeonovaBalletRusse

    “The top out of sight” and their wealth are invisible for a reason. If the masses or even the “middle class” had any inkling of their true material wealth and the advantage it conveys, they might do what the “Citizens” of France did. Even overt “royalty” today, despite occasional spectacles to keep their subjects enthralled, hide their true wealth. The .01% monopoly on material wealth is staggering, truly incomprehensible to others (including their .99% Agents, the “Middlemen” who deliver to the .01% whatever wealth of nations remains (via the eternal “Shock Doctrine” whether military or financial).

    See Paul Fussell’s book: “CLASS.” Thorstein Veblen’s “The Theory of the Leisure Class” shows the vain attempt of the 99% to appear to rise to the level of the .99% Agency, which is the heighest pecking order to which they can aspire. To the 99%, the wealth of the .01% is unimaginable.

    1. Shutterbuggery

      LBR.. exactly. Hiding the actual names and quantities of the loot stolen by the Top 400 is a great example of the real world power they can bring into play.

      Kinda the equivalent of getting ready to pull up the drawbridge and retire to the safety of the moat-protected castle in case the serfs actually wake up and take a look around.

  10. MyLessThanPrimeBeef

    The wealthy own lots of illiquid assets, everything from priceless paintings to private multi-billion dollar companies.


    What are these puny little things when you own banks and the power to create money?

    1. enouf

      not to mention “private multibillion dollar companies” is a grave misnomer; these institutions are anything but private, they not only STEAL the wealth of all other people, they do so using STATE-sanctioned/backed AGGRESSION (isn’t Gov’t considered Public?!) ..and then they SOCIALIZE the losses. They (and the State) are nothing more than Soviet-style Commie Pigs, the real CCCP.


  11. ambrit

    Dear Conscience;
    What is more interesting, and to the point, is HOW Gates et. al. made their “tons of wealth.” Have lunch with anyone honest you know who has worked at the Microsoft Campus. Then sit back for lots of stories about the cult like work and play environment the corporation, (The Sons of Bill,) set up to control and exploit their workers. The same applies to the Walton Kids, the Kochs, and at least three hundred and ninety seven other “job creators.”
    My take on this is that the Fed is striving mightily to obscure the segregation and concentration of wealth that has happened over the last thirty years or so.

  12. Greg Colvin

    I’ve long wondered, but can’t figure how to estimate, the crossover point, both for the world and the USA. That is, what is the wealth level at which taking much of the wealth above that point and gifting it to the people below that point would flatten the wealth distribution. And also the crossover point for income. I don’t think doing that is a good idea, but it would be an interesting indicator, and perhaps more intuitive than the Gini coefficient.

    1. Noni Mausa

      Good question. We do know some rough numbers dating from the postwar period. At one time the most a rich person could make was nominal $200,000 annually. (1974 dollars, I believe.) Ike’s top marginal rate was 91%, which put a cap on individual income and encourage the rest to be put into research, development, and other real investments.

      Another number that has been arrived at by several independent calculations is the lowest top marginal rate which still permits democracy to function — it’s around 65 — 75%. Lower than that, and the accumulated wealth builds on itself, manipulating public and government factors to increase itself and slash impediments to further growth.

      Finally, a third number is the top marginal rate that is associated with the LOWEST economic growth. It’s just under 33% IIRC. Guess where we’re at right now?

      A few links to get you started, since I have to go make supper.



  13. Reverb

    Can highly recommend Fussell’s “Class”, the Veblen book is free in Kindle form from Amazon…..

  14. MrColdWaterOfRealityMan

    What they really own are the world’s governments and the banks, but I repeat myself.

  15. Cugel

    Well, the data is certainly misleading by leaving out the richest 400, but it does present a much more accurate picture of just what happened to the 99.9%.

    The FED ought to have presented its results in several ways, first with the top 1% excluded, then with the top 1% included, then with the only the top 400.

    This would show exactly where all the wealth is going. It’s not even the top 10% anymore. It’s barely even the top 1%. It’s the top fraction of 1% that is grabbing all the economic growth, thus talking about the “average” is increasingly meaningless.

  16. Lambert Strether

    It’s not the mean that matters; it’s the power curve. And the Fed sliced off the top of the curve.

    It’s as if the Fed tried to model airline traffic by throwing out the hubs, or I tried to model the blogosphere by throwing out the top traffic sites.

  17. Capo Regime


    Thank you! Not to sound too Talebish but the entire discussion of mean and median is besides the point totally. Its a power curve or shall we say a fractal. Using the mean/average is such a croc and its amazing how people are mislead by it and think it has meaning. I recall a college in the midwest pointing out that the average salaries of political science graduates was 95,000. Accurate yes but misleading as a single NBA player pulled the average up…..On average all humans have one testicle. So what? People care about the 1%, nonsense the local thoracic surgeon is not pulling the worlds levers of power, now of course we look at the top .001 percent we have another matter. Ah innumeracy is a curse and so glad you are up to speed as solid numeracy is essential to understand reality and in turn be good at what you do–which you are.

  18. Capo Regime


    Good catch and more fundamentally, there well may be a normal distribution of the size of candy bars off of a production line but indeed human activities and political/economic power is not normally distributed. I wonder what the psychological appeal of the mean is to people (yes I am a former stats professor).

  19. James

    Guess you folks need a non-MS fanboy here. Remember in the 80’s, 90’s when apple was about to go under from some europian lawsuit they lost, Who bailed them out, from what country, and did it twice, to keep competition viable, so they would not be a monopoly?

    1. ctct

      excellent post… i always repeat a variation of these facts whenever i hear someone (usually young and dumb-sporting a smartphone)ranting about ‘innovation’ and ‘entrepreneurs’… they shut the fuck up and go look for a more gullible audience… their ‘spirits’ are totally colonized by certain ideologies, however, and impervious to facts…

      1. ctct

        meant for jsmith’s post on govt. funding of technological development, not jim, excuse me… i’m no tech genius, admittedly… but i haven’t screwed this up before

    2. enouf

      Couldn’t you just buy a copy of Forbes and factor in the numbers? –Jim

      Couldn’t some widely regarded Newspaper like the NYT, WashJour, etc just publish Front page headline;

      “Fed Lies Again! ; Tries to skew numbers/stats using meaningless drivel”

      or somesuch .. what would it take? heh


      p.s. this reminds me of what ChrisPacific replied to me when i mentioned (paraphrasing) “should we even bother trying to explain/unwind the massive fraud and deception of the demons and their minions?” .. to wit he responded (in part); ” ..We need to explain it to the voting public.” — well, i’m afaid the “voting public” is too apathetic, won’t even comprehend much of what is explained here on NC, and yet MIGHT finally “get it” if only MSM would write the friggin truth in Bold Headlines, daily! (the MSM is what the “voting public” read/watch/turn their brains to goo/ with)

  20. jsmith

    People defending Bill Gates? Really?!

    Let’s review the Xerox PARC shall we?

    Y’know that place where Gates and Jobs got so many of “their” genius ideas? Nahhh, all of the inventions at Parc probably had NO basis in government money/research, huh?


    “Founded in 1970 as a division of Xerox Corporation, PARC has been responsible for such well known and important developments as laser printing, Ethernet, the modern personal computer, graphical user interface (GUI), object-oriented programming, ubiquitous computing, amorphous silicon (a-Si) applications, and advancing very-large-scale-integration (VLSI) for semiconductors.

    “PARC’s West Coast location proved to be advantageous in the mid-1970s, when the lab was able to hire many employees of the nearby SRI Augmentation Research Center as that facility’s funding from DARPA, NASA, and the U.S. Air Force began to diminish. Being situated on Stanford Research Park land leased from Stanford University [4] allowed Stanford graduate students to be involved in PARC research projects, and PARC scientists to collaborate with academic seminars and projects.”

    Sure seems as that without the government Microsoft, Apple, Oracle, Google and Facebook wouldn’t exist, huh?

    Gee, I guess one could see how US citizens might be a tad pissed off at these corporations, huh, what with taking the science that they funded and then starting companies on said science and turning it into personal gain?

    Here’s how Oracle was started as a CIA project:


    Care to read upon In-Q-Tel? Y’know the VC arm of the CIA that has a hand in just about EVERY tech company?


    So, when I hear idiots chirping to the defense of the huge tech corps like Microsoft, let’s pull it back a little and realize that they wouldn’t have diddly shit without the research that WE PAID for.

    1. Mark P.

      All true. And we should also bring into the picture the fact that this government spending was, specifically, U.S. military spending, and Silicon Valley in the late 1940s and in the 1950s was underwritten and almost wholly a product of such spending, though it has preferred to pretend otherwise in recent decades.

      Nevertheless, while we may assume it was “steam engine time” and some other party/parties would have done it, it was Gates and Allen who said in the 1970s that they’d put a computer on every tabletop and did that. Nobody else.

    2. enouf

      This is what i mean when i say “WeThePeople OWN everything”, they own nothing. We OWN all the Resources, Minerals, Forests, Fish, Power Plants, Dams, Aquifers, the Oil/Gas/Coal …, the Buildings, the Property, the Infrastructure, the Research Centers, etc .. (and yes, i was going to bring up DARPA = Internet, heh). So — wtf is with this PrivateCorp bullshit meme? Who the F are these people? Tell them to GTFO!


      1. enouf

        ..to follow up;

        THEY OWE US (WeThePeople – the Sovereigns) Multi-Trillions of dollars. (if not Quadrillions)


    3. Calgacus

      Gates & Allen didn’t put a computer on everyone’s desk. Ludd is right. Microsoft is a software company, not a hardware company. It was happening without them, nobody could have stopped it, many understood it would happen when nobody had heard of them. Remember going to a few lectures of a class on OS design around then, the prof accurately predicting the PC future. Apple got there first with the first widely distributed PC, the Apple II.

      But nobody has even mentioned yet the company that “put a computer on everyone’s desk” in reality – IBM. Gates & Allen provided DOS to IBM for peanuts – they’d bought it for peanuts – while IBM didn’t realize they were essentially selling the corporation & its quasi-monopoly to them for peanuts. Considering IBM’s dominant position at the time, its PC presence was pretty inevitable, and would have happened with or without Gates. But IBM didn’t realize that while its hardware was still King, software would be the future King.

      Of course behind it all & most important of all, and therefore always insufficiently mentioned, was the US gubmint & the corporate & university research it supported, for decades in the case of Xerox & IBM & Unix.

  21. Hugh

    The Fed report was a typical Fed production. It presented a lot of information without telling me what I really wanted to know which is the total wealth in the country and its percent distribution.

    1. Fritter

      Bingo. Almost any report the Fed issues, meaning without the standard disclaimer “does not represent view of the FR….”, typically either has no conclusion or is so mealy-mouthed it is mush. Certainly not by accident.

  22. Schofield

    “Bill Gates created tons of wealth.” What does this statement imply that he and other innovators like him should get so much wealth that 46 million Americans have to be given food stamps? Also what happens to all the other stake-holders in their businesses, the workers? Are they to be cast on the dole by Bill Gates and his like outsourcing their jobs for greater personal enrichment? Is the point of human society that there is no role for morality and those with good ideas should exploit those without?

    1. ctct

      it’s the contemporary version of the ‘great man of history’… where’s our tolstoy..?

    2. Mark P.

      Our biggest problem is not those with good ideas exploiting those without such ideas.

      Our biggest problem is a class of de facto sociopaths with no idea at all except ‘more for themselves and less for the rest of us.’

      1. Nathanael

        Given that Bill Gates even schemed with his partner-in-crime Steve Ballmer to steal Paul Allen’s portion of the Microsoft money, it’s pretty clear he *IS* one of the dangerous sociopaths.

        Paul Allen’s another matter. He has his problems, including rampant nuttiness, but he isn’t part of the “psychopathic businessman” problem.

  23. Waking Up

    Could we possibly have a “special mission” to the moon in which the Fortune 400 and their families are permanently sent there to live? One year later we can have a second “special mission” in which those in power positions who effect the economic well being of the world and push the neo-liberal / conservative agenda will join them. I can’t help but believe planet earth would be a much better place without them.

    1. davidgmills

      Haven’t these people doene enough ecological damage on earth? Do we want them polluting the moon as well?

  24. Chauncey Gardiner

    Naw, just tax accumulated wealth over $50 million, piercing the corporate and charitable foundation veils and pursuing funds and assets worldwide, including those in the Queen’s “safe harbors”.

    One of our founding fathers told us that the bankers ultimately would force us to choose between our wealth or our freedom. Given their tools of extortion in derivatives and other devices, their intimidation and corruption of our lawmakers, and the Supremes’ Citizens United decision, that historical observation now seems quite prescient.

    The citizens of Iceland seem to have chosen well.

    1. enouf

      Indeed .. however, doesn’t anyone recall how FRIGGIN BAD it was even prior to the Citizens United SCOTUS JustAsses contemptible and fraudulent, treasonous finding?

      We are struggling like mad JUST to undo CU, like there will be panacea thereafter — the reason it’ll never happen (without a Constitutional Amendment) is because then; we could really start addressing the further embedded MoneyPolitics/State problems. Basically CU was done as a distraction (a veritable Wall put up and around an already concrete-encased pit, which we are all in), to furthen entrench themselves, and to make clawing out that ditch that much harder.

  25. Acmerecords

    We love you schofield, Hugh and jsmith
    Lower caste defenders of the obscene pillaging of the clepto-class reminds me former GI torture&drone supporters.. They just don’t get it, but really should
    Remember, truth tellers, Gandhi said: ‘the truth never damages a just cause’

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