[Sixstrings]

These charts tell you everything ya need to know..

Corporate profits:



Wages:



Worst employment number in 30 years:

[Plantagenet]

“It was the best of times, it was the worst of times.”
― Charles Dickens, A Tale of Two Cities

Interesting to see how Obama's economic policies are working out across the economy. So far its the best of times for the rich and the worse of times for the poor.

Ah well, Twas ever thus.

[GHung]

So who benefits the most from these corporate profits? While US households, collectively, still hold the largest share of equities, that share has dropped from 55.54% in 1990 to 37.92% in Q3 2012. See a pattern? 'Rest of world' has doubled from 6.87% to 13.44%.

Total market value (domestic equities) has jumped from $3.217 trillion (55.5% of GDP) to $19.698 trillion (124.6% of GDP) in the same period.

http://macromon.wordpress.com/2013/01/0 ... -market-2/

[copious.abundance]

The main reason for the large % of corporate profits as a % of GDP after 2000 is because of increasing amounts of overseas profits. An apples-to-apples chart would show corporate profits generated in the US as a % of (US) GDP.

[Loki]

$this->bbcode_second_pass_quote('copious.abundance', 'T')he main reason for the large % of corporate profits as a % of GDP after 2000 is because of increasing amounts of overseas profits. An apples-to-apples chart would show corporate profits generated in the US as a % of (US) GDP.

$this->bbcode_second_pass_quote('Loki', 'N')o.

$this->bbcode_second_pass_quote('copious.abundance', 'I') didn't say anything about the wages issue. I suspect it has a lot to do with non-wage compensation, but that's not something I've looked into enough to have much of an opinion.

[Loki]

$this->bbcode_second_pass_quote('copious.abundance', '')$this->bbcode_second_pass_quote('Loki', 'N')o.

[yellowcanoe]

$this->bbcode_second_pass_quote('copious.abundance', '[')Figure 2 shows total employer costs for three forms of employee compensation as a share of GDP. The three compensation types we consider are: private group health benefits (the upper-most shaded region), wages/salaries (the bottom-most region), and other (non-private group health) benefits and payroll tax contributions (the middle region).5 Total compensation as a share of GDP is denoted by the topmost line and is a fairly stable over the period, ranging from about 56 percent to 59 percent. Although wages are consistently the largest component of worker compensation, the shares paid to employees for health benefits and other fringe benefits/payroll taxes have increased as a share of GDP, while the amount paid as wages has fallen. Health benefit costs have increased from 0.6 percent of GDP in 1960 to 3.8 percent in 2008. Fringe benefits other than health care and payroll taxes have also increased over this period, ranging from 3.8 percent of GDP in 1960 to 6.6 percent in 2008. Wages, meanwhile, have fallen from 51.8 percent of GDP in 1960 to 45.3 percent in 2008.
)

$this->bbcode_second_pass_quote('Loki', '&')quot;Goodly" is not a number. He provided a number ...

[copious.abundance]

$this->bbcode_second_pass_quote('yellowcanoe', 'I') guess what you are saying is that the millions of people who have part time minimum wage work with no benefits are just delusional and that in reality their employer is providing them with health coverage and other benefits.

[Loki]

Oily, if you're going to dissemble, you're going to have to be a bit more subtle about it. From my original quote up thread: “a goodly part of it, at least 1 percentage point of GDP (and I’d probably argue higher than that, 1.5 to 2% but without much evidence).”

See those numbers after “goodly”? You must have read them since you quoted this exact same sentence, only without the numbers.

Explain how 1% (or at most 2% “without much evidence) is the "main reason” for the historic high in corporate profits as percent of GDP. Subtract 2% off the top of the OP's first chart and tell me what you see.

Nice try, but epic fail. You accused me of not proving a number and using the word "goodly" instead of a hard number. But it was not me who used the word "goodly," it was YOUR OWN ARTICLE.
$this->bbcode_second_pass_quote('Loki', '')$this->bbcode_second_pass_quote('copious.abundance', '')$this->bbcode_second_pass_quote('Loki', 'N')o.

[copious.abundance]

I actually just read another reason which probably explains as much of the increase in CP portion of GDP as does globalization. Hint: "21st Century Economy."

[Loki]

Oily, I'll try to dumb it down since you seem to have a hard time with arithmetic.

(1) You made the claim that overseas profits are the “main reason” of the current high. I linked to an article making the same argument you're making about corporate profits as percent of GDP.

(2) The article stated 1%, maybe 2% at most (“without evidence”) of corporate profits as percent of GDP is due to overseas profits. Let's split the difference and call it 1.5%.

(3) Subtract 1.5% from the current 11.1% (as of 7/1/13), and we get 9.6%. A percentage exceeded only in a couple years preceding the Great Recession, and far out of balance compared to most of the rest of the post-WWII period. Please refer to chart #1 of the OP.

Are you following me? I know this is difficult math, but take the time to digest it.

11.1% - 1.5% = 9.6%. The median for the 1947-2013 time series is 6.2%. The data are readily available for your perusal.

This is a definitive sign of wealth inequality, a decadal-scale trend accelerated by the Great Recession. And, as you've agreed, not yet ameliorated by your Great Recovery.

We are not in disagreement my friend. We are only debating the microdetails of the 5% recovery. The 5% have recovered and then some, as shown by the statistics we both agree on.

[copious.abundance]

I don't know why you're repeating what I just wrote. The "0.09 line," of course being 9% and the "0.10 line" meaning 10%.
$this->bbcode_second_pass_quote('copious.abundance', 'A')s for the 2% or so of GDP, if you subtract 2% of GDP from the top chart you will get something around the 0.09 line. Since the top line is around 0.11, that's actually a reduction of about 18%, which is a significant amount. Even half of that - 9% (leaving the chart at the 0.10 line) - would be a significant amount.

[dorlomin]

The collapse of the post war social democratic consensus in the 80s is slowly coming home to roost. You create over capacity in the economy if you dont have a wealthy middle class to soak up production. This was one of the drivers of the great depression, over capacity leads to deflation.

We are back to swirling round the drainhole of deflation, hence the vast amounts of QE to keep money supply up.

But that sticking plaster cannot last forever. Without debt borrrowing and QE we will be back to deflation. The neoliberal (or Washington) consensus is falling apart.

Rob Pestons recent blog on China kinda puts the other side of this equation on the table.

Wages in the new economies are not growing fast enough to cover for falling wages in the west, they also are committed to debt (and infrastructure) spending to keep the wheels on.

Make hay and save while the sun shines folks, remember Aseop's grasshopper and ant.

[PrestonSturges]

$this->bbcode_second_pass_quote('Plantagenet', '�')��It was the best of times, it was the worst of times.”
― Charles Dickens, A Tale of Two Cities

Interesting to see how Obama's economic policies are working out across the economy. So far its the best of times for the rich and the worse of times for the poor.

Ah well, Twas ever thus.

[Plantagenet]

$this->bbcode_second_pass_quote('PrestonSturges', ' ')....insane hatred of Obama....

[careinke]

I used to be against a minimum wage pay raise, because I knew it would not help. I still do not think it will help, but I don't think it will hurt either, and it may help reduce consumption as prices rise.

The real problem is the disparity of pay between the lowest and highest paid in the corporation. Since corporations can only legally exist at the pleasure of the government, the government can legally set a pay rate.

So instead of a minimum wage, I would suggest the highest paid employee, counting all compensation, should not be allowed to make more than 50 times the amount of the lowest paid employee based on an hourly bases.

This helps reduce pay disparity as some CEO's now make 600 times more than their lowest paid employees. At the same time it does not limit how much the CEO makes, he just has to drag his employees along with him/her.

Civilizations have a habit of collapsing when wealth disparities become too great. This would be a relatively easy way to mitigate the wealth disparity we have today. A win win for both the rich and the poor.