Share on Google Plus Share on Twitter 1 Share on Facebook Share on LinkedIn Share on PInterest Share on Fark! Share on Reddit Share on StumbleUpon Tell A Friend 3 (4 Shares)  

Printer Friendly Page Save As Favorite View Favorites (# of views)   2 comments
OpEdNews Op Eds

The "Bankization" of America

By       Message Richard Eskow     Permalink
      (Page 2 of 3 pages) Become a premium member to see this article and all articles as one long page.
Related Topic(s): ; ; ; , Add Tags Add to My Group(s)

Well Said 1  
View Ratings | Rate It

opednews.com Headlined to H2 8/17/13

Author 77715
Become a Fan
  (12 fans)
- Advertisement -

Financialized

The Federal Reserve's data on corporate profits were helpfully compiled by a contributor to the investment site The Motley Fool, who notes that financial profits were 11 percent of total corporate profits in the U.S. back in 1947, the first year these numbers were compiled.

- Advertisement -

These profits soared in the first decade of the 21st century. After taking a hit in the crisis of 2008 -- a crisis which the banking industry caused -- they rose again and are now at record highs. Their share of total corporate profits has risen from 11 percent to 42 percent, as of the latest report, and the Fed expects them to keep rising.

Here's how that looks:

2013-08-15-CORPFINPROFITS.JPG

The money nowadays isn't in manufacturing, or retail, or any of the other traditionally jobs-producing industries. The money now is in money.

How did this happen?

- Advertisement -

A series of policy decisions enabled this explosive growth, including the deregulation of Wall Street; the repeal of Glass-Steagall, which separated bank customers' money from money which the bank could invest for its own profit; runaway banker salaries and bonuses, which prompted the "best and the brightest" to flock to Wall Street and apply their ingenuity to flouting the rules; and government's increasing unwillingness to indict bankers for criminal behavior.

And then, when banker criminality and incompetence created the crisis of 2008, they were rescued by the government without being held financially or legally accountable for their wrongdoing.

The Federal Reserve continues to pursue stimulus policies that moderately help the economy as a whole, but which emphasize the economic health of banks and publicly-traded corporations over that of companies that hire workers -- and therefore increase the consumption of consumer goods.

Profit by the slice ...

Banks have a bigger share of the corporate-profit pie -- and that pie's bigger than ever. As Floyd Norris notes in the New York Times, the government's revised estimate of wage and salary income is 42.6 percent of GDP, which matches the 2010 figure as the lowest percentage since this data was first captured in 1929.

Using the latest revisions to the national income and product account (NIPA) data produced by the Bureau of Economic Analysis, Norris also notes that corporate profits are now 9.6 percent of GDP. That's the highest since these figures were first captured.

As Norris also notes, corporate taxes rose slightly in 2012 as a percentage of GDP but are still well below their historical averages. That's not an accident either.

- Advertisement -

Meanwhile, as this chart shows, unemployment remains horrendous:

2013-08-15-EmployRecJuly2013.jpg
(via Bill McBride, Calculated Risk)

Wages actually fell for most people after the 2008 crisis, as high-income individuals (the top 1 percent) captured all of the economic gains created by the government-sponsored recovery -- and even enlarged their share, capturing 121 percent of the recovery as the rest of the country fell behind.

Indebted

Next Page  1  |  2  |  3

 

- Advertisement -

Well Said 1  
View Ratings | Rate It

http://www.huffingtonpost.com/rj-eskow/the-dumbest-bipartisa

Host of 'The Breakdown,' Writer, and Senior Fellow, Campaign for America's Future


Share on Google Plus Submit to Twitter Add this Page to Facebook! Share on LinkedIn Pin It! Add this Page to Fark! Submit to Reddit Submit to Stumble Upon



Go To Commenting
/* The Petition Site */
The views expressed in this article are the sole responsibility of the author and do not necessarily reflect those of this website or its editors.

Writers Guidelines

Contact AuthorContact Author Contact EditorContact Editor Author PageView Authors' Articles
- Advertisement -

Most Popular Articles by this Author:     (View All Most Popular Articles by this Author)

How to Fix the Fed: Dismiss Dimon, Boot the Bankers, and Can the Corporations

The Top 12 Political Fallacies of 2012

Pawn: The Real George Zimmerman Story

What America Would Look Like If Libertarians Got Their Way

"F" The Bureaucracy! The White House Can Help Homeowners Right Now

"His Own Man's" Man: Jeb Bush and the Return of Wolfowitz