2010 was certainly a banner year—for profits but not for the rest of us.
According to the Wall Street Journal, corporate profits last year rose 29.2 percent, the fastest pace in six decades. But that’s just the total. If you take into account the fact that net receipts from the rest of the world rose only 8.8 percent in 2010, and calculate the rise in profits of domestic industries, the numbers are extraordinary: the profits of nonfinancial corporations rose 31.8 percent and those of financial corporations an even higher 51.3 percent.*
To put this into context, total wages and salaries rose during 2010 by a paltry 2.1 percent, while total compensation to employees rose only 2.4 percent.
Not only is this not trickle-down economics. The one-sided recovery has become a giant pumping-out machine, pumping out profits from those at the bottom for those at the top.
* These are profits with inventory valuation and capital consumption adjustments, as calculated by the Bureau of Economic Analysis.