Occasional X: How it works (DXXIV)

“Since the end of 2019, US corporate profits after tax are up 76%. Nominal GDP - the total value of everything the economy produces - is up just 48%. That is not all clever management and artificial intelligence. A large part of it is redistribution. For almost 60 years, workers’ share of US national income - the labour share - hovered around 78% once you strip out the business cycle. Today it is down to 72%, the lowest since 1963, which is as far back as my data go. What workers have lost, companies have gained. This is where Michał Kalecki comes in.” (Lars Christensen) Neither Lars Christensen nor Michał Kalecki ever understood profit. As a logical consequence, they never understood how the economic system works. For details, see Cross-references: Kalecki https://t.co/FemYl1aA8M The monetary economy in general, and the US economy, in particular, thrives on growing private/public debt. If this growth stops, the economy implodes. Macroeconomic profit Qm is given by the axiomatically correct Profit Law Qm:=(I−Sm)+(G−T)+(X−M)+Yd. The Law implies Qm:=(G−T)>0, i.e., macroeconomic profit is (co-)produced by deficit-spending/money-creation, i.e., the growth of public debt. The minimum requirement for a free-market economy is that macroeconomic profit is greater than zero, i.e., Qm≥0. If Qm<0, recession/depression/breakdown results. The free-market economy is continuously saved from breakdown by the deficit-spending/money-creating duo Treasury/Fed, i.e., the State. This means that the premise of mainstream economics, i.e., that the unfettered free-market economy is a self-adjusting, self-stabilizing, and self-optimizing system, is axiomatically false. This means that economics is a failed/fake science. Ultimately, this means that the representative economist is scientifically incompetent. Michał Kalecki was no exception. Currently, President Trump explodes the public debt. This increases macroeconomic profit Qm according to the Profit Law.

— AXEC (@EgmontHandtke) October 9, 2026