Economic Rents and the Financialization of the US Economy.

This paper examines the income dynamics associated with finance sector deregulation and the ensuing financialization of the US economy. Theoretically the project approaches the accumulation of income in the finance sector as an example of economic rent creation and the current collapse of the financial bubble as a potential moment of rent destruction. The project first establishes the shift in income into the finance sector, explains the institutional practices that permitted income to be diverted to this sector, and then goes on to document the industry specific distribution of this income to owners and employees, and among employees by education, occupation, sex and race. Our analysis shows that the long term rent process favors the banking industry and most of the increased income went to profits rather than employee earnings. In contrast, the securities industry only showed increasing profit accumulation after 2000, although employees in this industry made extraordinarily strong income gains beginning in 1980 and continuing through 2008. The insurance industry realized modest expansions of both capital profit and employees earnings after 1984. The real estate industry saw profit expansion after 1990 but relatively flat employee income. Where they occurred, employee income rents were limited to managerial, professional and sales occupations. White men benefited as well. [ABSTRACT FROM AUTHOR]