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Exactly.JackofDiamonds wrote:According to a study by two Yale economists, if state and local governments acted like they had in the last five recessions, they would have added at least 1.4 million jobs since 2007. Instead, they cut more than 700,000.
"Corporate profits are eating the economy," Derek Thompson wrote yesterday. And indeed, it seems they are. Company earnings are reaching new highs as a share of GDP. Wages are falling to new lows. And the stock market is surging.
It's not just that corporations are taking a bigger bite out of the country's wealth, though. It's the banks in particular. And that's an important part of understanding why workers are falling behind, while shareholders are pulling ahead.
Thirty years ago, the financial sector claimed around a tenth of U.S. corporate profits. Today, it's almost 30 percent. As a result, it's supplanted manufacturing as the biggest profit center in the economy, a transformation I've graphed out below.
Now here's how all this relates to employment. In the midcentury economy, when manufacturing was raking in 40 to 50 percent of corporate profits, it was also responsible for a around 20 to 30 percent of all employment. Finance, on the other hand, has never been responsible for more than 5 percent (as shown below).
So the problem isn't inherently that the makers lost out to the bankers. It's that profits shifted from a high-employment industry to a low-employment industry. And even though the whole pie of profits has grown, it still means earnings and, ultimately, wealth, end up concentrated in fewer hands, whether they belong to traders earning bonuses or shareholders earning dividends.
There's a coda to this story. After the early 2000s, manufacturing recovered its relative profitability, but it kept slashing jobs -- off-shoring some and using computerization and high-tech machinery to replace others.
In the Age of Wall Street, finance didn't just eat the corporate world. It also seems to have taught other industries to mimic its high-profit, low-employment template. Today, finance and manufacturing together account for more than half of domestic profits. They employ around one-eigth of the workforce. And that's how corporate profits eat an economy.
MGIC Investment Corp. (MTG) raised $1.1 billion selling stock and bonds as the insurer bolsters the unprofitable unit that backs home loans.
MGIC sold $450 million in convertible senior notes and 135 million shares of stock for $5.15 apiece, the Milwaukee-based company said late yesterday in a statement. The shares slid 7.8 percent to $5.17 at 9:41 a.m. in New York. They closed at $5.34 on March 5, before MGIC said it was offering shares.
Chief Executive Officer Curt Culver, 60, is raising cash after a measure of risk relative to capital exceeded limits set by some regulators. MGIC is benefiting as investors bet mortgage insurers can sell profitable coverage as real estate prices rebound and the U.S. reduces its role in the housing market.
“There seems to be a broad consensus from both parties in Washington that the federal government needs to continue to reduce its role in the mortgage markets, making room for sources of private capital like the mortgage-insurance industry,” Mark DeVries, an analyst at Barclays Plc, wrote in a note.
Radian Group Inc. (RDN), the largest U.S. mortgage insurer, raised $689 million after commissions and expenses selling shares and notes last week. Shares of the Philadelphia-based firm have advanced 57 percent this year as MGIC has nearly doubled. Arch Capital Group Ltd. (ACGL) reached a $300 million deal last month to buy mortgage-insurance assets from PMI Group Inc. (PPMIQ)
MGIC’s ratio of risk to capital at its main insurance unit was 44.7-to-1 as of Dec. 31, the insurer said Feb. 28, when it reported fourth-quarter results. The measure exceeds the 25-to-1 risk limit set by some state regulators, after the insurer was unprofitable for six straight years. The shares traded for more than $70 in 2006.
Meh. The fact checker wasn't exactly spot on either. Regardless, I don't really care if the benefits are a little bit more or a little bit less. The middle class is becoming poor and there's not much difference anymore. Even if you completely quit all benefits and hand out a little tax break, hell, halve the middle classes taxes, that's what like 5K a year. Nothing. A drop in the bucket.
Yeah, I posted the video two pages ago. And with the chart, to be honest I didn't look at it, or the fact checker detail much. After all, ...Jeff Sessions? If I budgeted the time it would take to look at and refute all right-wing propaganda, I'd have no discretionary time left.AWvsCBsteeeerike3 wrote:Meh. The fact checker wasn't exactly spot on either. Regardless, I don't really care if the benefits are a little bit more or a little bit less. The middle class is becoming poor and there's not much difference anymore. Even if you completely quit all benefits and hand out a little tax break, hell, halve the middle classes taxes, that's what like 5K a year. Nothing. A drop in the bucket.
Here's a video that is pretty awesome. [/youtube]
It's a lot easier to just post it here. It only takes a second.Freed Roger wrote: If I budgeted the time it would take to look at and refute all right-wing propaganda, I'd have no discretionary time left.
