So, this is kind of interesting.
Every year, the White House produces a document called The Economic Report of the President which contains, among other things, data about gross savings and investment, year by year.
According to the ERP, in 1973, personal savings (that's money held in savings by non-corporate entities, aka "people") in the United States totaled $102.5 billion. That same year, gross business savings totaled $153.9 billion.
Now, fast forward 29 years.
In 2002, gross personal savings totaled $169.8 billion. Gross business savings totaled…
…wait for it…
$1,229.5 billion. Yes, that's $1.3 trillion.
Now, to put that in perspective, consider the following:
Between 1960 and 1979, gross corporate savings was pretty consistently about twice as much gross personal savings. So, for example, in 1972, GPS (gross personal savings) totaled $76.9 billion and GCS (gross corporate savings) totaled $140.1 billion. And that's a reasonably consistent trend from 1960 to 1979. There are exceptions, but they tend to favor personal savings: in 1970, GPS was $69.5B, and GCS was $104.8B.
Now, between 1980 and 1989, the scales started to tip a little. There was still, generally, about a 1:2 ratio between GPS and GCS, but those "exception years" favored GCS instead of GPS.
Both figures grew steadily until 1992, when GPS topped out at $413.7 billion, then started to decline pretty sharply. Meanwhile, GCP took off in an uninterrupted slope. If you chart the two values, you get a widening "V" shape that flares at the end, like the bell of a trumpet.
Hey, what does all that mean?
Well, that depends on how you look at it. What it means to me is that there has been a steady decline in the economic prosperity of private citizens in the United States since, at least, 1992— and that, during that same period, there was a sharp increase in the economic prosperity of corporations.
This leads me to some disturbing conclusions about the economic franchise of the electorate. Savings, to some extent, equal economic stability. At the present time, private citizens have very little economic stability, while corporate entities (all evidence to the contrary) have a great deal of it. I look at that, I see an alarming lack of autonomy; the private consumer no longer has the resources to engage in economic negotiations with the corporate planning system. We can't afford to boycott and we can't afford to strike— the two most direct tools for negotiating with corporations from one end or the other. And we are being totally outclassed in campaign spending and other economic controls of the civil infrastructure.
This trend has not, as near as I can tell, been significantly reversed under Bush. If anything, Bush seems inclined to cut out the middle man, handing large tax breaks directly to the rich, maintaining the tax burden on the general population, and using tax revenues to fund defense projects (and purchase fuel and other associated consumables) that directly benefit a fairly small number over powerful corporations with highly focused spending habits: a 15,000 pound bomb costs about as much as a car to build, but employs many fewer people in the effort.
So that's all pretty bad.
Have a nice day.
I'm having trouble making sense of those figures. What precisely does 'savings' mean? Is it money in the bank?
The reason I ask is that I have a (perhaps naive) suspicion that the disparity has something to do with the fact that more and more Americans invest in the stock market. Those investments are, from the point of view of those who make them, savings, but they aren't money in the bank. Moreover, since most corporations are privately held, the majority of corporate savings would also have to show up in the value of privately owned stock. (I think)
As far as the astounding increase in corporate savings goes, I wonder how much of that is attributable to the fact that corporations now keep a lot more cash on hand. In part this is done because their physical inventories are much smaller, and in part to ensure that they have the ability to fight off hostile takeovers.
Anyway, none of this would undercut the basic point of the last section, which is that economic power has become increasingly concentrated over the last few decades. But that fact is, of course, amply demonstrated by straighforward statistics on the distribution of wealth.
Posted by: zwichenzug at May 27, 2004 01:00 AMOkay. This is a little strange.
I just went back to the ERP spreadsheets to look at the data, to see if they give a definition of "personal savings", and the layout has changed. When I looked at this two days ago, savings were broken down by "personal" and "corporate", with a "corporate total" next to the "personal" data. The corporate total used to include undistributed profits, consumption of fixed capital, and actual corporate savings (which, I assumed from the language, meant "assets in holding"). But now those values are broken out and spread out all over the page.
Also, the "personal" numbers for 2002 have gotten bigger, to the tune of about $14 billion. Though that could just be because the 2002 numbers may not have been seasonally adjusted last time I looked at them.
Lest some enterprising Right-winger accuse me of moonbatitude, I'm not suggesting that the spreadsheet was changed in response to anything I or anyone else posted on the internet about it.
But the new spreadsheet is much less clear in its comparisons and much harder to derive conclusions from, particularly in terms of comparing corporate and personal prosperity.
Anyway, as regards zwichenzug's question of investment and such, there is investment data in the ERP. Also, another writer has put together a spreadsheet dissecting saving habits in the United States that can be found here. Data on investment can be found on sheet two here. It is my (very quick, because I'm busy as hell at work) impression that the drop in personal savings can't be accounted for by investment, especially not when it's looked at in terms of a percentage of disposable income saved.
I'm not saying you are wrong at all, just giving you the initial feedback I found: http://www.argmax.com/mt_blog/archive/000248.php
Interesting how the use of credit cards may be impacting American savings. I certainly buy that line: credit accounts are a really freaky aspect of American economics. Also, you take the depression era folks and then compare their attitudes to non-depression... well, you know the cliche.
Posted by: rowlf at June 8, 2004 12:53 AMI'm not saying you are wrong at all
'Cause we all know how dangerous that is. Heh.
It's an intersting site. But I really disagree with this conclusion:
What really matters is the total national savings - personal savings plus government and corporate savings.
That seems sort of like saying it doesn't matter if wealth is concentrated so that the vast majority of people are poor, as long as the national average is within a certain range.