>But doesn't the *distribution* of capital gains income have a macro
>significance through its effect on balance sheets? Let's say households'
>bull-market CG income came at the expense of the corporate sector. Wouldn't
>that mean that household balance sheets are a little better off, and
>corporate balance sheets a little worse off, than the NIPA stats make it
>seem? Wouldn't that have some Minskyan significance for the financial
>fragility of the macroeconomy? Perhaps it explains why investment, but so
>far not consumption, has taken a hit?
Balance sheets, yes. Firms transferred big $ to shareholders during the 1990s, a lot of it borrowed, and balance sheets show it. Investment has taken a hit because the VCs have tightened up and the IPO window is nailed shut - and because future profit prospects don't look so rosy.
Of course, HH balance sheets have taken a big hit over the past year, so some of this is history.
On Minsky: you're right about that, but also, he said somewhere (the Keynes book maybe?) that the stock market passes judgment on corporate financial practices. For years, the stock market said yes to buybacks and generous options packages, which have now left a big hangover.
Doug