[lbo-talk] the conservative mind

[Jeffrey Fisher]

On 3/1/06, Doug Henwood <dhenwood at panix.com> wrote:
>
> 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.

thanks, doug.

so, the common sense conclusion here is that there is a causal relationship
between the low wage growth and the high profit growth, ie, that profit
growth is so robust precisely because wage growth has been suppressed.
right?

can one actually make that case? or do we think there's something else going
on?

j

--
"lo que decimos no siempre se parece a nosotros"
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