Tuesday, November 20, 2007

Flow of Funds Fun! v.5

This chart shows the total profits (before tax) of the domestic financial, farm, and non-financial corporations as seen in Table F.7 Distribution of National Income in the Flow of Funds Accounts adjusted by the CPI-U and by the population.

I've just got one thing to say about the chart. If anyone tells you that the bursting of the dotcom bubble has ushered in a new permanent (sustainable) era of prosperity for us then be sure to ask for a nice refreshing glass of Kool-Aid as well. I'm just not so sure I'd be drinking what they have to offer.

Look out below if that ever reverts to the mean (which most things do).

Further, real corporate profits have not kept up with compensation (until the bubble burst that is).

This chart shows the total compensation of employees adjusted by the CPI-U and by the population. Since income inequality has been shown to be growing (as seen in the Gini Coefficient), I would argue that the top end of the pay scale is pulling up the average. Our financial center, New York, is leading the charge (pun intended).

See Also:
Flow of Funds Fun! v.4
US Gini Coefficient Map

Source Data:
FRB: Flow of Funds Accounts
St. Louis Fed: Population: Mid-Month
BLS: Consumer Price Index

These charts inspired by a comment left by kwark.

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