1. Burton W. Folsom, The Myth of the Robber Barons: A New Look at the Rise of Big Business in America, Young America’s Foundation (2018). 

Chapter 1: The Prosperity Economy

2. Adam Smith, An Inquiry into the Nature & Causes of the Wealth of Nations, Chapter II, “Of the Principle which Gives Occasion to the Division of Labour,” 1776, Gutenberg.org.

3. Adam Smith, An Inquiry into the Nature & Causes of the Wealth of Nations, Chapter X, “Of Wages and Profit in the Different Employments of Labour and Stock,” 1776, Gutenberg.org. 

Chapter 2: The Profits Cycle

4. Irving Fisher, “The Debt-Deflation Theory of Great Depressions,” Econometrica, 1933.

5. Ben Bernanke, Mark Gertler, and Simon Gilchrist, “The Financial Accelerator and the Flight to Quality,” Working Paper No. 4789, National Bureau of Economic Research, July 1994.

6. Ben S. Bernanke, “The Financial Accelerator and the Credit Channel,” speech at The Credit Channel of Monetary Policy in the Twenty-first Century Conference, Federal Reserve Bank of Atlanta, Atlanta, Georgia, June 15, 2007.

7. Joe Abbott and I explain forward earnings in our S&P 500 Earnings, Valuation, and the Pandemic (2020) study. 

Chapter 3: What’s Wrong with This Picture?

8. Find it on my Amazon Author Page.

9. Edward Yardeni and Joseph Abbott, Appendix 2: “S&P 500 Price Index, Revenues & Earnings Data Series,” S&P 500 Earnings, Valuation and the Pandemic (2020).

10. Bureau of Economic Analysis, Chapter 13: Corporate Profits in NIPA Handbook: Concepts and Methods of the U.S. National Income and Product Accounts, December 2020.

11. Edward Yardeni and Joseph Abbott, Stock Buybacks: The True Story (2019).

Chapter 4: Ins and Outs of Profits

12. Internal Revenue Service, “Forming a Corporation” webpage.

13. Internal Revenue Service, “Some S corporations may want to convert to C corporations” webpage.

14. Bureau of Economic Analysis, Chapter 13: Corporate Profits in NIPA Handbook: Concepts and Methods of the U.S. National Income and Product Accounts, December 2020.

15. Internal Revenue Service, “S Corporations” webpage.

16. Brookings, “9 facts about pass-through businesses,” May 15, 2017.

17. Bureau of Economic Analysis, “Why is the estimate of NIPA dividends as a share of corporate profits much larger than the share reported in private-sector estimates?” webpage.

18. Bureau of Economic Analysis, “Where are the dividend measures shown in the national accounts?” webpage.

19. Internal Revenue Service, “Dividends (Distributions of Cash and Property) of S Corps and Other Corporations,” Excel table.

20. Howard Krakower, Jennifer Lee, Kate Pinard, and Marlyn Rodriguez, “Prototype NIPA Estimates of Profits for S Corporations,” Bureau of Economic Analysis, May 17, 2021. 

21. Scott Eastman, “Corporate and Pass-Through Business Income and Returns Since 1980,” Tax Foundation, April 23, 2019. See also Erica York, “Pass-Through Businesses Q&A,” Tax Foundation, May 9, 2019. 

22. Bureau of Economic Analysis, “Chapter 11: Nonfarm Proprietors’ Income,” in NIPA Handbook: Concepts and Methods of the U.S. National Income and Product Accounts, December 2020.

23. The household measure of employment counts the number of workers, while the payroll measure counts the number of jobs. Both are reported by the Bureau of Labor Statistics in its monthly Employment Report.

Chapter 5: Uses and Alleged Abuses of Profits

24. Chuck Schumer and Bernie Sanders, “Schumer and Sanders: Limit Corporate Stock Buybacks,” The New York Times, February 3, 2019.

25. Edward Yardeni and Joseph Abbott, Stock Buybacks: The True Story (2019).

26. National Center for Employee Ownership, “Employee Ownership by the Numbers” website article, March 2021.

27. Carol E. Moylan, “Employee Stock Options and the National Economic Accounts,” BEA Briefing, February 2008.

28. Andrew W. Hodge, “Comparing NIPA Profits With S&P 500 Profits,” BEA Briefing, March 2011.

29. William Lazonick, “Profits Without Prosperity,” Harvard Business Review, September 2014.

Chapter 6: Productvity and Prosperity

30. Lawrence H. Summers, “The Biden stimulus is admirably ambitious. But it brings some big risks, too,” The Washington Post, February 4, 2021.

31. U.S. Chamber of Commerce, U.S. Chamber Calls for Ending $300 Weekly Supplemental Unemployment Benefits to Address Labor Shortages press release, May 7, 2021.

32. CNBC, Christina Wilkie, “Biden goes on offensive against economic critics, argues rising wages show his agenda is working,” May 27, 2021.

33. Bureau of Labor Statistics, “Productivity and Costs” webpage.

34. For a comprehensive list along with definitions of this and alternative measures of wages and labor costs, see Ed Yardeni, “Alternative Measures of Wages & Labor Cost” in my 2018 book, Predicting the Markets: A Professional Autobiography.

35. Economic Policy Institute (EPI) webpage. The EPI is heavily supported by unions. Until he passed away during August 2021, the chairman of its board of directors was Richard L. Trumka, the president of the AFL-CIO. The following unions are also represented on the EPI’s board of directors: USW, UAW, SEIU, IAM, AFSCME, CWA, and AFT. The self-described “nonpartisan” group also counts the chair of the Democratic National Committee on its board.

36. Economic Policy Institute, “About” webpage.

37. Economic Policy Institute, “The Productivity-Pay Gap” webpage, May 2021.

38. A footnote in the Federal Reserve’s February 2000 Monetary Policy Report to Congress explained why the committee decided to switch to the inflation rate based on the PCE deflator rather than the CPI.

39. Drew DeSilver, “For most U.S. workers, real wages have barely budged in decades,” Pew Research Center, August 7, 2018.

40. Joseph E. Stiglitz, “Progressive Capitalism Is Not an Oxymoron,” The New York Times, April 19, 2019.

41. The Census Bureau uses the Consumer Price Index for all Urban Consumers Research Series (CPI-U- RS), provided by the Bureau of Labor Statistics for 1978 through 2019, to adjust for changes in the cost of living. For years prior to 1978, the Census Bureau used estimates provided by the Bureau of Labor Statistics from the CPI-U-X1 series. The CPI-U-X1 is an experimental series that preceded the CPI-U-RS and estimated the inflation rate in the Consumer Price Index for all Urban Consumers (CPI-U). See “Appendix A. Estimates of Income,” Income and Poverty in the United States: 2019, Census Bureau, September 2020.

42. For more on the Great Inflation, see the excerpt of Chapter 3 of my 2020 book, Fed Watching for Fun and Profit.

43. Bank of America, “Bank of America Increases US Minimum Hourly Wage to $25 by 2025” press release, May 18, 2021.

44. Jack E. Triplett, “The Solow Productivity Paradox: What Do Computers Do to Productivity?” Brookings Institution, May 20, 1998.

45. George Westinghouse won the bid to light the 1893 World’s Fair’s Columbian Exposition in Chicago with alternating current. In a building devoted to electrical exhibits, he demonstrated to the American public the safety, reliability, and efficiency of a fully integrated alternating current system. See Wikipedia.

Chapter 7: Income and Wealth in America

46. Adjusted gross income (AGI) is defined by the Internal Revenue Service as total income (line 6, Form 1040) minus statutory adjustments (line 36, Schedule 1). Total income includes labor compensation, taxable interest, ordinary dividends, alimony, net capital gains, rents and royalties, distributive share of partnership or S corporation net income or loss, and several other smaller sources of income. Adjustments to income include such items as educator expenses, student loan interest, alimony payments, and contributions to a retirement account.

47. Jesse Eisinger, Jeff Ernsthausen, and Paul Kiel, “The Secret IRS Files: Trove of Never-Before-Seen Records Reveal How the Wealthiest Avoid Income Tax,” ProPublica, June 8, 2021.

48. Michael M. Batty, Michael, Jesse Bricker, Joseph Briggs, Elizabeth Holmquist, Susan McIntosh, Kevin Moore, Eric Nielsen, Sarah Reber, Molly Shatto, Kamila Sommer, Tom Sweeney, and Alice Henriques Volz, “Introducing the Distributional Financial Accounts of the United States,” Finance and Economics Discussion Series 2019-017, Board of Governors of the Federal Reserve System, March 2019.

49. Lindsay Jacobs, Elizabeth Llanes, Kevin Moore, Jeffrey Thompson, and Alice Henriques Volz, “Wealth Concentration in the United States Using an Expanded Measure of Net Worth,” Working Paper, August 2, 2021.

50. Emmanuel Saez and Gabriel Zucman, “The Rise of Income and Wealth Inequality in America: Evidence from Distributional Macroeconomic Accounts,” NBER Working Paper No. 27922, October 2020.

Chapter 8: Profitable and Unprofitable Policies

51. Barack Obama, “Remarks by the President at a Campaign Event in Roanoke, Virginia,” Office of the Press Secretary, The White House, July 13, 2012.

52. Daniel Indiviglio, “Why Businesses Should Fear Elizabeth Warren,” The Atlantic, September 23, 2011.

53. Business Roundtable, “Business Roundtable Redefines the Purpose of a Corporation to Promote ‘An Economy That Serves All Americans’,” August 19, 2019.

54. The MBA Oath.

55. Council of Institutional Investors, “Council of Institutional Investors Responds to Business Roundtable Statement on Corporate Purpose,” August 19, 2019.

56. Editorial Board, “The ‘Stakeholder’ CEOs,” The Wall Street Journal, August 19, 2019. 

57. Milton Friedman, “A Friedman doctrine—The Social Responsibility of Business Is to Increase Its Profits,” The New York Times, September 13, 1970.

58. Allison Herren Lee, “Climate, ESG, and the Board of Directors: ‘You Cannot Direct the Wind, But You Can Adjust Your Sails’,” June 28, 2021 keynote speech at the 2021 Society for Corporate Governance National Conference. 

59. Saijel Kishan, “How Wrong Was Milton Friedman? Harvard Team Quantifies the Ways,” Bloomberg, December 1, 2020.

60. Saijel Kishan, “Corporate Climate Efforts Lack Impact, Say Former Sustainability Executives,” Bloomberg Green, July 13, 2021.

61. Larry Fink, “A Fundamental Reshaping of Finance,” 2020 letter CEOs.

62. Tariq Fancy, “Financial world greenwashing the public with deadly distraction in sustainable investing practices,” USA TODAY, March 16, 2021.

63. Lisa Hagen, “McConnell: Businesses Using ‘Economic Blackmail’ to Alter Laws,” US News & World Report, April 5, 2021.

64. Emily Cochrane, “Elizabeth Warren will propose a minimum tax on the nation’s richest companies,” The New York Times, August 9, 2021.

65. Lawrence Mishel and Jori Kandra, “CEO compensation surged 14% in 2019 to $21.3 million,” Economic Policy Institute, August 18, 2020.

66. Dylan Matthews, “Bill Clinton tried to limit executive pay. Here’s why it didn’t work,” The Washington Post, August 16, 2012. 

67. Securities and Exchange Commission, “Investor Bulletin: Say-on-Pay and Golden Parachute Votes,” March 2011.

68. Kristoffer Inton and Joshua Aguilar, “Board Members and CEOs: How Close Is Too Close?,” Morningstar US Videos, July 8, 2021. 

69. Robert J. Jackson, Jr., “Stock Buybacks and Corporate Cashouts,” Securities and Exchange Commission, June 11, 2018 speech. 

70. Jerome H. Powell, “New Economic Challenges and the Fed’s Monetary Policy Review,” August 27, 2020 at “Navigating the Decade Ahead: Implications for Monetary Policy,” an economic policy symposium sponsored by the Federal Reserve Bank of Kansas City, Jackson Hole, Wyoming (via webcast). 

71. Board of Governors of the Federal Reserve System, “2020 Statement on Longer-Run Goals and Monetary Policy Strategy,” August 27, 2020.

72. CNBC, “S&P 500 doubles from its pandemic bottom, marking the fastest bull market rally since WWII,” August 16, 2021. 

Epilogue

 73. YouTube, “Comrade Kaprugina delivers a scolding” clip from movie Doctor Zhivago.