Monday, March 16, 2009

Some Data on U.S. Corporate Profits

The BEA groups U.S. Corporate profits into three large categories: Domestic Nonfinancial, Domestic Financial, and Rest of the World - the later measuring U.S. corporate operations overseas. In looking at these groupings, one can see the long-term decline in the Domestic Nonfinancial sector, as a source of profit. Meanwhile, the Domestic Financial sector gained in importance, especially accelerating with the deregulation of the 1980's. This continued until the stock market bubble ended around the turn of the century. There has been a steady increase in the importance of profits from overseas, with a big explosion occurring in the Bush II era. 'Rest of the World' moved ahead of 'Domestic Financial' in 2008, and now represents 25 % of the profits for U.S. based companies.

This trend is a bad one for the future of the U.S. middle class. Part of the reason the labor movement was able to achieve certain gains, is because its industries were indispensable to U.S. capital as a source of profit. With the Domestic Nonfinancial sector trending lower, and now at around 50 % of U.S. corporate profits, this indispensability is less absolute. The result will be ever more emboldened attacks against the safety nets and labor gains that have historically protected and developed the U.S. middle class. The ruthlessness with which the right-wing has advocated for the bankruptcy of the domestic car industry, is one example of this.


Source : Bureau of Economic Analysis
National Income and Product Accounts Table
Corporate Profits by Industry 6.16 A-D

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