The Rise Of The Finance Economy

Moving our economy into FIRE did not create lots of new high-paying middle-class jobs for the modern equivalent of past generations' engineers, technicians, and skilled blue-collar craft and assembly workers. Instead, we appear to have more-or-less doubled the profit margins and the pay of our financiers. The legions of bank clerks and back office workers did not see rapid pay increases nor achieve high incomes. It all went to the top.

Over 2004-6 fully 30% of corporate profits were in finance--a share that was double what it had been back in the 1960s. And the many of the most lucrative parts of finance were not structured as corporations: the growing fortunes of the partners in our investment firms come on top of that 30%.

From here.

I've previously noted that the 2000s (the trend really started in the late 1980s, but took some time to become visible) were also marked by a rising disparity between CEOs in the "real economy" and those in the financial sector. The defining change in the economy running up to the financial crisis was the dramatically increasing share of it that went to the finance sector.

It is not entirely clear why this happened.

Another huge shift has been in health care administration: "The administration of our ill-designed health care system now costs us about 4% of GDP over and above the costs of administering health care in other comparable countries."