larryswedroe wrote:-just too much to do (:-))
You know, someone once told me that New York has more lawyers than people. I think that's the same fellow who thinks profits will become larger than GDP. When you begin to expect the growth of a component factor to forever outpace that of the aggregate, you get into certain mathematical problems. In my opinion, you have to be wildly optimistic to believe that corporate profits as a percent of GDP can, for any sustained period, hold much above 6%. One thing keeping the percentage down will be competition, which is alive and well. In addition, there's a public-policy point: If corporate investors, in aggregate, are going to eat an ever-growing portion of the American economic pie, some other group will have to settle for a smaller portion. That would justifiably raise political problems--and in my view a major reslicing of the pie just isn't going to happen.
LadyGeek wrote:^^^ I got it.
If the profits increase, wouldn't the company use the profits to further their business? That would increase their expenses and the profits would drop. To me, corporate growth would be a source of reversion to the mean. Perhaps my view is over-simplistic and I'm missing a basic point here.
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