Tuesday, July 6, 2010

Private sector US employers lost $3.0 trillion Net Worth during Dec 2007 to Dec 2009, due to the banks

Employers in productive US industries lost $3.0 trillion of Net Worth during 24 months of economic meltdown (Dec 2007 to Dec 2009). The loss represented 19% of the capital which is used to create domestic products in the US.

Government FRB data keeps track of the total Net Worth of all businesses in the US. The (nonfarm, nonfinancial) business Net Worth peaked at the end of 2007, when US businesses had a combined Net Worth of $15.8 Trillion. In the Dec 2009 quarter, this (nonfarm, nonfinancial) business Net Worth bottomed out at $12.8 trillion. This was a loss of $3.0 trillion for corporate business employers in productive industries, during 24 months. (reference: table B.102, line 32, in
www.federalreserve.gov/releases/z1/current/z1r-5.pdf

This loss of vigor by Productive employers demonstrates why "private sector" un-employment has increased in the US.

The productive sector of US Corporations experienced an upswing during 2010 and 2011. The combined Net Worth of the productive sector for US corporations advanced to $15.0 trillion at the end of Q2 2011.

The first eighteen months of economic recovery period for corporate employers (Jan 2010 through Jun 2011) have regained less than three-fourths of the Net Worth losses which Productive sector US corporations had endured, due to mismanagement of the US banking industry.

But US corporations were $0.7 trillion farther in debt for overall liabilities in Jun 2011 than they had been when the economic downturn started, in Dec 2007.

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