Nathan Newman wrote:
>The 1950s were a period when workers wages were increasingly largely in line
>with productivity, so there was a profit squeeze on companies preventing
>massive gains for shareholders disproportionate to revenue gains by the core
>companies.
There was no profit squeeze in the 1950s. That didn't happen until much later.
>Today, though, with workers wages lagging far behind gains in productivity,
>an ever ascending stock market seems not only reasonable but to be expected.
>Each year, shareholders are able to claim for themselves an ever greater
>share of the value created by workers.
Uh, Nathan, the boom in stock prices has far outstripped profit
gains. All conventional valuation measures - P/E, market cap/GDP,
dividend yield - are off the charts, as is my favorite unconventional
measure, the S&P 500 divided by the average hourly wage. The profit
share of GDP peaked in 1996 and is actually a bit off that peak today.
Doug
