politics. In his 1956 book The power elite, sociologist C Wright Mills states that together with the military and political establishment, leaders of the biggest corporations form a "power elite" that is in control of the U.S. Economist Jeffrey Sachs described the United States as a corporatocracy in The Price of Civilization (2011).
Regulators turned a blind eye to a lack of transparency and to conflicts of interest." Stiglitz explained that the top 1% got nearly "one-quarter" of the income and own approximately 40% of the wealth. Measured relative to GDP, total compensation and its component wages and salaries have been declining since 1970.
This indicates a shift in income from labor (persons who derive income from hourly wages and salaries) to capital (persons who derive income via ownership of businesses, land, and assets). Larry Summers estimated in 2007 that the lower 80% of families were receiving $664 billion less income than they would be with a 1979 income distribution, or approximately $7,000 per family.
Legal restrictions on buybacks were greatly eased in the early 1980s.
since 1980: "Financial services' share of GDP in America, doubled to 8% between 1980 and 2000; over the same period their profits rose from about 10% to 35% of total corporate profits, before collapsing in 2007–09.
In America the compensation of workers in financial services was similar to average compensation until 1980.
About 46 companies have reincorporated in low-tax countries since 1982, including 15 since 2012.
banking assets in 1998; this rose to 45% by 2008 and to 48% by 2010, before falling to 47% in 2011. The Economist also explained how an increasingly profitable corporate financial and banking sector caused Gini coefficients to rise in the U.S.
since 1980: "Financial services' share of GDP in America, doubled to 8% between 1980 and 2000; over the same period their profits rose from about 10% to 35% of total corporate profits, before collapsing in 2007–09.
Between 2003 and 2012, the 449 companies in the S&P 500 used 54% of their earnings ($2.4 trillion) to buy back their own stock.
This indicates a shift in income from labor (persons who derive income from hourly wages and salaries) to capital (persons who derive income via ownership of businesses, land, and assets). Larry Summers estimated in 2007 that the lower 80% of families were receiving $664 billion less income than they would be with a 1979 income distribution, or approximately $7,000 per family.
Not receiving this income may have led many families to increase their debt burden, a significant factor in the 2007–2009 subprime mortgage crisis, as highly leveraged homeowners suffered a much larger reduction in their net worth during the crisis.
since 1980: "Financial services' share of GDP in America, doubled to 8% between 1980 and 2000; over the same period their profits rose from about 10% to 35% of total corporate profits, before collapsing in 2007–09.
banking assets in 1998; this rose to 45% by 2008 and to 48% by 2010, before falling to 47% in 2011. The Economist also explained how an increasingly profitable corporate financial and banking sector caused Gini coefficients to rise in the U.S.
banking assets in 1998; this rose to 45% by 2008 and to 48% by 2010, before falling to 47% in 2011. The Economist also explained how an increasingly profitable corporate financial and banking sector caused Gini coefficients to rise in the U.S.
Nobel Prize winner of economics Joseph Stiglitz wrote in May 2011: "Much of today’s inequality is due to manipulation of the financial system, enabled by changes in the rules that have been bought and paid for by the financial industry itself—one of its best investments ever.
banking assets in 1998; this rose to 45% by 2008 and to 48% by 2010, before falling to 47% in 2011. The Economist also explained how an increasingly profitable corporate financial and banking sector caused Gini coefficients to rise in the U.S.
About 46 companies have reincorporated in low-tax countries since 1982, including 15 since 2012.
Between 2003 and 2012, the 449 companies in the S&P 500 used 54% of their earnings ($2.4 trillion) to buy back their own stock.
military establishment after World War II, large corporations using money to finance election campaigns, and globalization tilting the balance of power away from workers. In 2013, economist Edmund Phelps criticized the economic system of the U.S.
For example, Senator Elizabeth Warren explained in December 2014 how an omnibus spending bill required to fund the government was modified late in the process to weaken banking regulations.
Writing in the Harvard Business Review in September 2014, William Lazonick blamed record corporate stock buybacks for reduced investment in the economy and a corresponding impact on prosperity and income inequality.
He advocates changing these incentives to limit buybacks. In the 12 months to March 31, 2014, S&P 500 companies increased their stock buyback payouts by 29% year on year, to $534.9 billion.
companies are projected to increase buybacks to $701 billion in 2015, according to Goldman Sachs, an 18% increase over 2014.
For scale, annual non-residential fixed investment (a proxy for business investment and a major GDP component) was estimated to be about $2.1 trillion for 2014. ===Industry concentration=== Brid Brennan of the Transnational Institute explained how the concentration of corporations increases their influence over government: "It’s not just their size, their enormous wealth and assets that make the TNCs [transnational corporations] dangerous to democracy.
She repeated President Theodore Roosevelt's warnings regarding powerful corporate entities that threatened the "very foundations of Democracy." In a 2015 interview, former President Jimmy Carter stated that the United States is now "an oligarchy with unlimited political bribery" due to the Citizens United v.
Six more also planned to do so in 2015. ===Stock buybacks versus wage increases=== One indication of increasing corporate power was the removal of restrictions on their ability to buy back stock, contributing to increased income inequality.
companies are projected to increase buybacks to $701 billion in 2015, according to Goldman Sachs, an 18% increase over 2014.
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