If those criticisms had been accurate, the U.S. corporate sector today would be ailing. Instead, corporate profits are at historical highs both absolutely and relative to GDP. Private equity and activist investors–both Wall Street creations–have pushed companies to become more efficient. Venture capital funded companies, aided by capital from Wall Street and other investors, include firms like Amazon, Amgen, Apple, Facebook, Gilead Sciences, Google, Intel, Microsoft, and Starbucks that have changed the world as we know it. While it is impossible to prove causality, it seems highly likely that Wall Street has played an important role in these results.
And he’s right: nonfinancial corporate profits (as a share of national income, the blue line in the chart above) have in fact risen since 1985 (from 4.4 percent in 1985 to 8 percent in 2015). And Wall Street has also helped itself: financial profits (the red line above) have also risen (from 1.3 percent of national income in 1985 to 3.2 percent in 2015).
What he fails to mention is that, at the same time, the wage share of national income (the green line in the chart) has fallen: from 55.6 in 1985 (and even higher, 57.2 percent in 1992) to a low of 52.5 percent in 2014 (rebounding slightly to 53.1 percent in 2015).
Yes, indeed, Wall Street has been good for business and for itself—and terrible for everyone else, especially American workers.