[lbo-talk] the conservative mind

Doug Henwood dhenwood at panix.com
Wed Mar 1 06:38:42 PST 2006


Jeffrey Fisher wrote:


>well, this is the thing i don't get. how is will allowed to get away
>this? if we say it enough times, loud enough, it will be true? is it
>just that everyone wants to believe it? or is it precisely because
>the focus is on profits? are profits during this expansion better
>than the clinton-era boom? are they even comparable? according to
>what measures?

Profitability (profits/value of the capital stock) was higher at the peak of the 1990s boom; it peaked in 1997 (well ahead of the economy and the stock market, interestingly enough) and started falling, and took a steep dive into 2001-2002. But the recovery over the last 3-4 years has been stunning, and profitability has regained about 3/4 of its slide. Growth in profits has been phenomenal - about 4-5 times as much (in percentage terms) as total wage growth (total meaning wages times employment, not just the hourly wage), the biggest disparity in that measure of any post-WW2 bizcycle.

Doug



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