You are hereThink Progress: Financial Industry Fights New Regulations To Protect Skyrocketing Profits

Think Progress: Financial Industry Fights New Regulations To Protect Skyrocketing Profits


March 28, 2011- While many Americans are still feeling the pain of the Great Recession in the form of unacceptably high unemployment and mounting foreclosures, corporate America has come roaring back in 2010. According to results released Friday by the Bureau of Economic Analysis, “corporate profits grew 36.8 percent in 2010, the biggest gain since 1950.”

But these numbers hide the fact that not all industries are doing well. In fact, the recent growth in corporate profits was driven almost entirely by the financial industry:

Domestic profits of financial corporations increased $57.7 billion in the fourth quarter, compared with an increase of $34.6 billion in the third. Domestic profits of nonfinancial corporations decreased $10.1 billion in the fourth quarter, in contrast to an increase of $0.3 billion in the third. In the fourth quarter, real gross value added of nonfinancial corporations increased, and profits per unit of real gross value added decreased.

The financial industry now accounts for about 30 percent of corporate operating profits. As the Wall Street Journal’s Kathleen Madigan wrote, “that’s an amazing share given that the sector accounts for less than 10% of the value added in the economy.” Before the Great Recession, the financial industry accounted for about 23 percent of corporate profits.

FULL STORY HERE:

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