"A few days ago, Federal Reserve economist economist Ricardo Marto published an important paper on what happened to the economy in the period after Covid struck. What he found, after crunching numbers from the Bureau of Economic Analysis, is that there was massive redistribution of wealth upward, from working people to big business.
According to Marto, domestic non-financial corporate profits doubled, to $4 trillion a year. As a percentage of total economic output going to profits, they went from 13.9% to 16.2%, while the labor share modestly declined.
There are two other disturbing elements in the paper. First, these profits went to reward shareholders in the form of dividends, not to investment to build more capacity. And second, profit levels have remained elevated. Throughout the pandemic recovery period, economists were vehement that profit increases did not reflect increased concentration, and that increased profits were temporary. Yet this research shows that such assumptions were wishful thinking.
Indeed, the most serious domestic policy failure of the Biden administration was allowing their economists to aggressively avoid addressing this shift upward in wealth from working people to big business. And now let’s fast forward to the current moment. We are in a trade crisis, and this crisis has some echoes of the post-Covid supply chain mess. And I suspect Donald Trump might be repeating Biden’s mistake.
This new crisis, of course, is the one that’s been wrought by Trump’s own abrupt tariff policies."
https://www.thebignewsletter.com/p/how-monopolies-could-exploit-the