Finance produced 41 percent of U.S. corporate profits in 2007
Evidence
For those riding the roller coaster of 2008, and retrospectively searching for previous wrong turns, it seemed obvious to focus on the sector wherefrom disasters cascaded one after another like clowns piling out of an auto: namely, Wall Street. Not only had finance become the four-hundred-pound gorilla of the U.S. economy, accounting for 41 percent of all corporate profits in 2007, but it was also the arena where economic theory had seemed to matter to a greater degree than elsewhere, given recourse to formal models to “justify” all manner of activities, from securitization and options pricing to risk management. Thus it was fairly predictable that some economists would look to finance theory as the prime locus of error, and rapidly settled upon a single doctrine to scapegoat, the one dubbed the efficient-markets hypothesis (EMH). — Philip Mirowski, Never Let a Serious Crisis Go to Waste, 748
Categorization
- SHARE: The 41-percent-of-corporate-profits figure is a crisp, narrow stat for someone into financialization history.
- CANDY: The finance-sector ‘four-hundred-pound gorilla’ gripping 41% of all corporate profits is a striking elevator fact.
- XREF: connects to: Finance produced 40 percent of US corporate profits despite being only an information system — Mark Blyth, Austerity: The History of a Dangerous…, 624; Nearly 40% of S&P 500 earnings came from financial activities by 2000 — Ken-Hou Lin & Donald Tomaskovic-Devey, Financialization and U.S. Income…, 49; Finance generated profits by pumping undervalued asset classes for twenty-five years — Mark Blyth, Austerity: The History of a Dangerous…, 627 (+1 more)
Broader Connections
- Major nonfinancial corporations shifted their earnings toward financial operations
#corroborates(0.85) — Ken-Hou Lin & Donald Tomaskovic-Devey, Financialization and U.S. Income…, 45 - Finance generated profits by pumping undervalued asset classes for twenty-five years
#expands(0.80) — Mark Blyth, Austerity, 627